Can renewable energy be the answer to the crisis in India's power sector?

The demand for energy depends on the rate of a country’s industrial growth as well as residential and commercial demands. India is the world’s fourth largest energy consumer. According to market insiders, India’s coal industry is failing to meet its mark under the NDA government.

- Kuntala Sarkar

India is fostering new relations with Indonesia and Sri Lanka to supplement its domestic demand for coal. Additionally, India is trying to think beyond traditional energy resources like coal and natural oil, focusing on renewable energy sources to achieve sustainable growth. Around one fifth of India’s energy is presently produced from renewable sources.

Current trends

Over the past few years, the Indian coal industry fell short of supply as against its increasing domestic demands. The cabinet decision to open up coal mining to commercial miners is an interesting development. In the financial year 2016-17, 34 Coal India projects were delayed due to issues pertaining to forest clearances and land acquisition. This is a recurring issue in this sector in India.

According to India’s draft National Policy on Renewable Energy, which is based on micro-grids, it is expected that the government would establish at least 10,000 renewable-based micro and mini-grid projects across the country. For the first time, the Indian government complemented grid access with decentralised, smaller-scale systems that are aimed to supply electricity directly to consumers. The country planned to ramp up its solar power generating capacity to 100,000 MW by 2022 which is nearly a 25-fold increase from 4000 MW of installed capacity that was there in 2015. This means that every year, India had to install about 14,000 MW of solar power continuously for the next seven years if this ambitious 100 GW target had to be achieved. The records indicate that in the last five years India has succeeded in installing only around 2000 MW of solar power. The fate of other renewable sectors has fared similarly.

Challenges in current coal market