Grid stability, solar PV manufacturing, discom dues to take centrestage in 2023

India has made giant strides in boosting its renewable energy (RE) capacity in 2022, adding 14.21 gigawatts (GW) to October, and is now the fourth largest country in the world in terms of installed capacity. Moreover, 76.37 GW of renewable energy capacity is underway, a large portion of which is expected to come online in 2023. Another 37.16 GW is in various stages of bidding.

However, with renewable energy capacity exceeding 172 GW, power transmission and grid stability remain a challenge. The year 2023 will be crucial in how the government develops transportation infrastructure, an important link in India’s clean energy transition.

A major initiative in this direction are the rules for open access to green energy, which remove barriers to the availability and use of renewable energy. The rules reduce the open access limit to 100 kilowatts, paving the way for small consumers to buy renewable energy without a limit for captive consumers.

moving in

Pratik Agarwal, of Sterlite Power MD, aptly notes: “You have the bulk of high-quality solar in western India and the bulk of high-quality wind in the south. This power has to travel to Delhi, Bombay, Pune, Bangalore and Chennai. So, the The amount of transmission you need to add is the biggest challenge.”

The Ministry of Energy has prepared a comprehensive plan for the transmission system to integrate more than 500 gigawatts of renewable energy by 2030. The system will provide renewable energy developers with insight on potential generation sites and the size of investment opportunities. It also provides opportunities for growth in transmission with an investment of ₹2.44-lakh crores.

Also, as part of India’s ISTS Scheme Central Transport Utility Central Transportation Scheme (CTUIL), around Rs 46,800 crore is expected to be invested in the transport sector till March 2024. Network stability is another crucial element in this sector due to the increase in overcharge during peak hours, which It makes it difficult to keep the network frequency within the range required by the network code.

Thus, the year 2023 will see an increased focus on energy storage, with an increasing variance in energy supply and demand. The government is also working on a Production Linked Incentive (PLI) scheme for stocking at the network level.

Analysts and market players agree that transportation has not kept pace with renewable capacity additions, and will be a major issue in 2023 and beyond. More so as energy demand in India continues to rise.

An NTPC official said: “Energy demand is expected to grow in 2023, driven by rising manufacturing and domestic consumption along with mobility electrification. National electricity demand is expected to grow by 7 per cent in FY23 (ending March) 2023).

manufacturing

Gautam Mohanka, Gautam Solar MD, asserts that the allocation of Rs. 19,500 crore for solar PV modules, under the PLI scheme, is driving faster transition to renewable energy and is expected to save around Rs. 1.37 crore in imports.

One of the main concerns is storage, Mohanka said, adding that the government recently introduced a transmission scheme, under which it has laid out plans to ensure round-the-clock power supply by installing a 515-gigawatt battery by 2030, an indication that the renewable energy infrastructure is expected to work. grow in 2023.

However, higher commodity prices in 2022 are putting pressure on yields, and will be a key factor to track in 2023.

Ankit Haku, Director of Ratings Crissil said, “Rising commodity prices (particularly solar modules) and the depreciation of the rupee have increased capital costs for developers and also affected project returns and equity in their projects under construction. Bids for these projects were largely awarded in the two years FY2021 and FY21 and it is currently under implementation, therefore, the rise in project costs was completely unexpected.”

Besides, Amplus Solar SVP Ritu Lal pointed out that basic tariffs and almost simultaneous imposition of approved list of models and manufacturers pose serious challenges for both cost efficiency and power generation.

Discom dues

The application of the Late Payment Surcharge (LPS) has effectively helped recover outstanding dues for disturbances. Total outstanding receivables of Rs. 26,546 crore have been settled as of November 21, while 13 countries with outstanding receivables of Rs. 1.38 crore have opted for EMI option and premium paid of Rs. 9,528 crore in two equal monthly instalments. Moreover, 20 countries reported no payments due as of May 2022.

Another key thing to watch in 2023 is the passage of the Electricity Amendment Act, which was introduced in the Lok Sabha in August, and referred to a standing committee in the wake of widespread protests. If passed by parliament, it would allow private players to be involved in distribution and enable consumers to choose from a multitude of service providers.