On Friday, an advisor to the power ministry stated that Indian renewable energy developers should synchronise their expansion strategies with accurate demand forecasts, according to a Reuters report.
This approach is crucial to mitigate the danger of infrastructure investments failing to generate profit.
Ghanshyam Prasad, Chairman of the Central Electricity Authority (CEA), cautioned against expanding renewable energy capacity without a proportional increase in demand.
He delivered this warning at the BloombergNEF Summit in New Delhi, highlighting a recurring challenge for the sector.
Balance in supply and demand
“If we add 60 GW next year, will it get sold? Probably not,” he said.
He added that existing renewable capacity remains unsold.
India’s power landscape is undergoing a significant transformation, marked by a unique challenge: electricity supply is now consistently outpacing demand.
This unprecedented scenario has led to grid operators implementing measures to maintain system stability, primarily by curtailing power input.
Historically, India has grappled with power deficits, but aggressive capacity additions in renewable energy, particularly solar and wind, coupled with conventional thermal power plants, have altered this dynamic.
Operational complexities of power surplus
While this surplus capacity signifies progress towards energy security, it also presents operational complexities for the national grid.
The curtailment of power input, often referred to as “generation curtailment” or “must-run exemptions” in certain contexts, is a necessary step to prevent grid instability.
An excess of generation over demand can lead to frequency fluctuations, voltage irregularities, and even grid collapses.
Therefore, operators are forced to either scale down generation from certain power plants or, in some cases, disconnect them from the grid temporarily.
Reuters reported earlier this month that approximately 44 gigawatts (GW) of India’s renewable energy projects currently lack supply agreements.
According to Prasad, India experienced thermal power overcapacity in the last decade.
He said:
Generators were at a loss. Some even faced bankruptcy issues. Let’s not enter an era of stressed assets again.
Strengthening transmission and future growth
Prasad emphasised the need for improved coordination between renewable energy developers and transmission line builders. He cautioned that even with ready transmission infrastructure, power usage is not guaranteed.
We have substations like the one at Khavda (in the western state of Gujarat) with a 4,000 (megawatts) MW capacity, but only 300–500 MW has been hooked up.
He also stressed the critical importance of proactive planning for developers, urging them to submit grid connection requests a minimum of 24 to 36 months prior to their anticipated operational dates.
This extended timeframe is essential to facilitate thorough assessments, necessary infrastructure upgrades, and the intricate coordination required to ensure seamless and timely integration of new energy projects into the existing grid infrastructure.
Failure to adhere to this recommended lead time could result in significant delays, increased costs, and potential bottlenecks in project completion and energy delivery.
Industry representatives at the summit highlighted the need for more comprehensive reforms within India’s power transmission sector.
“We are able to add capacity very quickly but the need is to distribute that capacity at the equal pace through transmission. That investment is missing, because the whole focus is on the generation side,” said Sanjeev Aggarwal, founder and executive Chairman of Hexa Climate Solutions.
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