21 Oct 2019
India must focus on using natural gas as an intermediate fuel in order to balance the power grid amid rising share of renewable energy in the energy basket, Sumant Sinha, Chairman and Managing Director of independent renewable energy producer ReNew Power, has said.
“Gas has a property of increasing the flexibility of the grid which is an important aspect as it allows you to have much more renewables in the grid without the need to dial down renewables at any point of time. The more gas we put in the system the better it is,” Sinha said at an industry event here last week.
He also said regulators need to incentivise the uptake of natural gas as a fuel due to its higher cost. ReNew Power operates 4.3 Giga Watt of renewable energy capacity including both solar and wind, with over 3.2 GW of capacity in the pipeline for development.
India currently consumes 1.2 trillion units of electricity annually. That is expected to go up to 2.4 trillion units by 2030. While a bulk of the additional 1.2 trillion units of electricity will be supplied by renewables, the gap left should be filled by natural gas, he said, highlighting the environmental concerns surrounding hydro power and fuel supply issues with nuclear power.
Sinha also pointed out multiple hurdles in increased adoption of natural gas including poor financial health of discoms and high cost of imports and the associated geo-political risks.
“If you see what happened in renewables, till about two years ago discoms were buying renewable energy at Rs 5-6. Today, costs have crashed due to technology improvement and capex reductions and renewables are now at Rs 3 per unit. Now, even for a slight increase of 10-30 paise discoms have issues because of financial health,” Sinha said.
The government is planning to increase the country’s renewable energy capacity to 175 GW by 2022 and 450 GW by 2030. This would create surplus renewable energy generation during peak hours leading to reduced uptake of green energy by discoms, he said. He also added that discoms only care for the lowest price of power without worrying about reliability and the industry suffers when they back down on committed purchase.