Mint Sustainability Summit: Alternative energy firms grappling with uncertainties: Panel

As the Union government looks forward to a gradual shift towards renewables and sustainability, the green energy industry is gearing up to seize the opportunity with expansion plans.

While the focus has mainly been on solar energy, companies equipped to provide alternative energy solutions, including wind, compressed biogas (CBGand green hydrogen, are grappling with uncertainties that may affect their future plans.

“The government and developers have realized that relying on solar is not going to help. Without ‘wind’ the whole concept of decarbonization or migrating to pure play-REG segment is inconceivable. It’s been good for people like us in the industry to see ‘wind’ is getting back to some level of its primary and it’s been due,” said R. Narayan Kumar, chief business officer of wind turbine maker Inox Wind, in a panel discussion at the Mint Sustainability Summit 2024 on Tuesday.

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The executive, however, pointed towards the fact that India's wind energy market is expected to rely on 3 megawatts turbines for years due to slower technology adoption and infrastructure challenges, unlike countries like South Africa, which have transitioned to 4MW turbines. 

The 5MW product, suited for specific geographies, faces policy hurdles, particularly in repowering, prompting a focus on onshore development with 3MW turbines as the workhorse for the Indian market.

The state of other renewable energy alternatives is no different. “In the next three years, we are setting up a total production capacity of 600-700 tonnes per day, so we’re looking at an investment plan of upwards of ₹5,000 crore till 2028. Large players have also entered the game in the last 1-2 years, interest is growing knowing that there is a clear-cut need, demand is always there, but the value-chain enablement policies are now taking shape,” said Mahesh Girdhar, chief executive officer at compressed biogas developer EverEnviro Resource Management Pvt. Ltd.

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Girdhar, however, clarified that this is still in the very early stages because the entire business model needs to be proven on the ground from a full-scale commercial perspective. The key requirement for CBG projects is raw material, and 70% of the raw material is agricultural raw material that needs to be collected from farmers. How this will be priced going forward is a question mark because today, it is going into wastage and getting burnt, so it's about commercial viability.

On the green energy and e-mobility segment, Debi Prasad Dash, executive director of India Energy Storage Alliance, an industry alliance focused on the development of advanced energy storage, highlighted that they are expecting another 0.5 gigawatts installations this year. In the last seven months, more than 11GW of tenders have been announced or issued, of which 3GW has already been awarded. “On the project side, we are at a very good stage. 2023 was the year of policy, and from 2024, it is the year of implementation,” he said.

Dash also brought in his scepticism that they are a long way from achieving the required grid scale, for which, multiple new application areas would have to be evolved.

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He highlighted that one of the key points in the same is the full utilisation of transmission lines. “The government is trying to use the partial use transmission lines or avoid transmission congestion at some points in time and defer that to some other time of the day and try to give energy storage as additional assets on the generation side,” Dash said.

He also commented on the current prices for energy storage tenders awarded this year, highlighting that they are low not only due to a fall in global battery prices but due to other reasons as well. “Few bidders that got the first few projects want to showcase to the world they have done the first project, so they have lowered the prices. Also, a few raw material prices have become stagnant after covid-19, so battery prices have been lowered. In India, the cost of manpower has also lowered the EPC of storage projects compared with global installations,” Dash added.