Ten ways India can achieve energy independence

Ten ways India can achieve energy independence through sector transformation

Barnik Chitran Maitra explains how transformational change across power generation, transmission networks and the distribution sector can enable India’s energy transition.

India is the third-largest producer and the second-largest consumer of electricity in the world. Against a backdrop of rising demand and the need to decarbonise, it has set an ambitious aspiration of becoming energy independent by 2047.

Achieving this aim requires energy sector transformation, improving efficiency, reliability, digitalisation, and sustainability.

Essentially, to be truly energy independent, India needs to produce more energy and generate it through sustainable methods as well as minimise losses during transmission, distribution, and consumption.

Over the last few decades, the demand for electricity in India has increased exponentially, driven by industrialisation, digitisation, and technological advancements.

This need has been partly met by growth in renewable energy – from 2010 to 2022, India’s generation capacity, including renewables, has grown by 85%.

India is now the fourth-largest global producer of windpower and the fifth largest in generator of solar power.

However, the country is not energy independent, currently spending $160 billion annually on energy imports.

India has therefore set ambitious targets to become energy independent by 2047, as well as further expanding its use of non-fossil fuel generation to reduce carbon emissions by 1 billion tonnes by 2030 and achieve net zero emissions by 2070.

Achieving these goals requires transformational change across the sector, focusing on ten imperatives grouped around three themes – sustainability in power generation, making national power transmission networks future-ready, and increasing the profitability of players in the distribution sector.

Ways to energy independence

1. Become self-sustaining in power generation

It is increasingly difficult to meet rapidly growing energy demand with current power resources, particularly given the rising price of coal.

At the same time achieving net zero targets requires a substantial reduction in carbon emissions from power generation,

The industry therefore needs to focus on the following three key imperatives:

Scale up the contribution of green energy

To ensure an affordable and cleaner energy mix there needs to be a dramatic increase in the use of renewable energy sources.

The potential is there – the Indian Ministry of New & Renewable Energy (MNRE) estimates that the country has a renewable energy potential of around 1700 GW from commercially exploitable sources. However, unlocking the investment needed to deliver renewable growth requires reforms to:

  • Improve investor confidence
  • Remove entry barriers such as difficulty in land acquisition
  • Boost domestic manufacturing of photovoltaic (PV) cells and wind equipment
  • Incentives to increase the adoption of rooftop solar.

Alongside this the industry should increase the emphasis on baseload technologies such as offshore wind and nuclear generation, increasing nuclear energy production by establishing scalable small modular reactors (SMRs), utilising locally available thorium, and building a regulatory environment conducive to these alternatives.

Promote green hydrogen as a carbon-neutral energy storage solution

Leveraging renewable energy sources to meet total electricity demand is not possible without developing additional energy storage solutions.

Green hydrogen is emerging as the go-to option in areas that require high power density storage and have space/weight constraints.

Read more: India rubber-stamps $2bn Green Hydrogen Mission

Increasing its use requires the introduction of financial incentives for stakeholders and ensuring self-sufficiency in electrolyser production.

With this in place, readily available biomass can be used to generate green hydrogen as long as robust logistics are in place to transport it to production facilities.

Accelerate Carbon Capture, Utilisation, and Storage (CCUS)

To meet its net zero emission target, India should also look at CCUS technology. This can complement and supplement nature-based carbon removal solutions, such as afforestation and reforestation.

India’s carbon storage potential varies from 5 to 400 billion tons of CO2, located mainly in geological formations such as coal fields, oil and gas fields, sedimentary basins, and saline aquifers.

Listen now: Podcast – Weighing the true cost of carbon capture

Greater uptake of CCUS for decarbonisation can be driven by introducing financing channels for CCUS implementers, investing in R&D to identify cost-effective mechanisms, establishing a start-to-end governance framework for CCUS management, and participating in global forums to leverage recent developments.

2. Make national power transmission future ready

The second key theme relies on transformation of the transmission sector, both to increase current efficiency and to accommodate changing dynamics within the industry.

Mitigating these technical issues relies on four key imperatives:

Enhancing infrastructure development and augmenting capacity

The country should look to improve transmission infrastructure through the deployment of anti-theft and anti-oxidation cables to reduce theft and technical losses, shifting toward high-voltage direct current (HVDC) lines for long-distance transmission, imposing stricter penalties for transmission network developers upon default, and expediting development of interstate transmission lines.

Watch: Video interview – Exploring India’s rapid electrification and digitalisation

Securing the future of the national smart grid

India must support the development of a national smart grid by designing and implementing a strategy that emphasises efficient data collection by installing smart meters at nodal points, securing data communications by using narrow broadband technologies, building data concentrator units, and piloting dedicated systems like smart grid control centres (SGCCs) and outage management systems (OMSs).

Deploying microgrids effectively

The objective across the sector should be to achieve flexibility and scale by deploying microgrids in coordination with local operators. At the same time, this strategy should be future proofed by retaining the possibility of complete integration into the national grid in the future.

Establishing world-class grid congestion management

With an increasing share of renewable energy, more efficient use of available network capacity will become a necessity. Unnecessary grid investments and ineffective grid operations must be avoided through the deployment of direct control methods (e.g., peak shaving), market-based methods, or a combination of both.

3. Driving greater profitability for distribution companies (DISCOMs)

The distribution of power is the most troubled sector across the Indian value chain. State DISCOMs, who make up 93% of distribution companies have been characterised by negative net worth (-$4.49 billion), high debt ($62.87 billion), and operational inefficiencies.

This highlights an urgent need for transformation, leveraging the following three key imperatives:

Harnessing the digital potential of power distribution through smart meters

Distribution companies need to successfully digitize by developing digital infrastructure such as smart meters.

This will allow them to transform energy distribution through consumer-centric engagement strategies, the phasing in of nationwide deployment with constant feedback collection, and by investing in a multilevel data security system.

Pushing for increased private player participation

Currently 7% of DISCOMs are privately held, though the presence of major private players has increased significantly over the last few years.

This trend should be accelerated through the help of supporting regulatory frameworks as well as providing financial support in terms of subsidies and rebates for private entities.

Scaling up adoption of power exchanges

While the Indian power exchange market is still in its infancy, now is the time to implement and experiment with reforms to create a solution targeted to local needs.

These should include the introduction of a market-coupling operator to discover a common market clearing price (MCP) across exchanges, initiating energy derivative markets with regulatory frameworks that support fair price determination and shorter credit lines, and considering a market-based economic dispatch model to prevent complete replacement of power purchase agreements (PPAs).

Energy independence is of growing importance to leading nations. India could fast-track its self-reliance goals by leveraging these ten key imperatives toward strategy-driven reform.

Barnik Chitran Maitra

With some directed momentum, India can achieve its aspiration of becoming an energy independent nation, while at the same time meeting net zero targets.

Barnik Chitran Maitra is a partner at Arthur D. Little.

Recap: The ten ways to energy independence

1.Scale up the contribution of green energy

2. Promote green hydrogen as a carbon-neutral energy storage solution

3. Accelerate Carbon Capture, Utilisation, and Storage (CCUS)

4. Enhancing infrastructure development and augmenting capacity

5. Securing the future of the national smart grid

6. Deploying microgrids effectively

7. Establishing world-class grid congestion management

8. Harnessing the digital potential of power distribution through smart meters

9. Pushing for increased private player participation

10. Scaling up adoption of power exchanges

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Kelvin Ross is Editor-in-Chief of Enlit Europe and Power Engineering International. A journalist for more than 30 years, he has worked on regional, national and international newspapers, as well as trade magazines serving sectors including insurance, shipping, health and financial markets. He has covered the energy sector for more than 10 years. He helped establish Energy Live News in the UK before joining PEi and he has been ranked among the top 100 global influencers on Twitter for 'renewable energy' and 'smart grid' topics.

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