The challenges and opportunities of low carbon transition in India’s power sector

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About 75 participants from national and state government bodies, regulators, system operators and other market actors gathered in New Delhi to discuss the low carbon transition in India's power sector (Photo: IEA)

India has strong ambitions to enhance access to modern, secure, sustainable and affordable energy to its growing population. While the contribution of renewable energy to India’s power mix has grown in recent years, significantly reducing the carbon footprint of a power system built primarily on coal raises new challenges.

For example, as increasingly cost-competitive renewables are added, improving the flexibility of the system as a whole becomes a priority. What measures and technologies would enhance the ability of the grid to adapt to changing electricity supply and demand patterns? What regulatory and market frameworks would be needed to deliver power where and when it is most valued? How could existing assets be economically used in a more environmentally sustainable manner? At what cost could a flexible power system be achieved?

These essential questions about India’s energy transition formed the backdrop of a high-level workshop held in New Delhi between the IEA and the National Institution for Transforming India (NITI Aayog), with about 75 participants from national and state government bodies, regulators, system operators and other market actors.

India plans to increase cumulative renewable grid power capacity to 175 gigawatts (GW) by 2022, up from 50 GW today. This 2022 target  consists of 100GW solar, 60GW wind and 15GW of other renewables, including small hydropower, though the majority of the total will come from large-scale renewables. Such a commitment comes with significant challenges. States in India are in very different stages of deploying renewables, with different resource endowments, an issue that will require co-operation from both state and federal levels said Anil Kumar Jain, NITI’s Additional Secretary for Energy, Climate Change and Overseas Engagements.

Christian Zinglersen, the head of the Clean Energy Ministerial (CEM) Secretariat at the IEA, gave an overview of various regional experiences, noting that some countries have successfully integrated significant volumes of renewable power into their grids, with a particular emphasis on the role of flexibility provided by thermal power generation. He noted that market design and system operation issues often seemed considerably more difficult in some jurisdictions than the technical aspects. Mr Zinglersen outlined a number of IEA and  CEM activities to support such issues, including the Thermal Power Plant Flexibility Campaign to be launched at the CEM8 Ministerial meeting in Beijing, in June 2017.

IEA and industry experts described the current status of coal-fired power generation in general in India and the overall need to ensure that the facilities are modernised and that least-efficient plant be phased out, given the expected large role that coal will continue to play in power supply. Supercritical and ultra-supercritical coal technologies are available and can in general provide more flexibility than subcritical plant. While not a current priority, carbon capture and storage should not be forgotten from India’s future plans. While natural gas has provided flexibility for power systems in other parts of the world, supply infrastructure remains underdeveloped in India. Meanwhile hydropower is becoming increasingly difficult to expand.

India will need to look at all flexibility options, including an increasingly interconnected grid, storage and demand side measures. An integrated approach would help enable the transition to a low carbon power system, but also requires addressing considerable regulatory challenges, such as the pricing of electricity.

The IEA and NITI both stressed the importance of working together in the coming years to further explore how the low-carbon transformation of the Indian power system can be achieved and flexibility improved.