Mumbai, Maharashtra Feb 16, 2025 – Vishwang Desai: Top Challenges to India’s Solar and Wind Power Projects
India’s ambitious renewable energy goals are driving its global clean energy leadership. However, its 500 GW non-fossil fuel capacity target by 2030 faces significant hurdles in the solar and wind sectors.
1) Land Acquisition: Significant Obstacles
Securing land for solar and wind projects is a major challenge. India’s population density and competing land uses make acquiring large, suitable areas difficult. Solar projects, needing 4-5 acres per MW of flat, sunny land, face particularly acute challenges. Wind projects require specific topography, presenting similar difficulties.
The 2013 Land Acquisition Act, while aiming for fairness, adds complexity. Social impact assessments and consent processes, vital for protecting landowners, often cause delays and increased costs.
Fragmented land ownership necessitates negotiations with multiple stakeholders, increasing costs and delaying projects. Unclear titles and disputes further complicate matters, leading to protracted legal battles.
2) Grid Integration: Managing Intermittency
The intermittent nature of solar and wind power strains grid stability. India’s older grid infrastructure, designed for conventional power, struggles to handle variable renewable energy output, causing voltage fluctuations, frequency issues, and reactive power management problems.
These technical challenges are exacerbated by regulatory and operational issues. Inaccurate forecasting and scheduling lead to energy curtailment and revenue losses. The absence of a robust ancillary services market hinders grid management of renewable energy variability.
The distance between renewable energy sources and load centers requires substantial transmission infrastructure investment. The Green Energy Corridors project, though helpful, faces implementation delays.
3) Financial Constraints: High Upfront Costs and Risk
Despite decreasing technology costs, financing remains a significant barrier. High upfront capital costs and perceived risks lead to higher debt costs compared to conventional power projects.
The financial state of distribution companies (DISCOMs) adds to the challenge. DISCOMs burdened by debt and inefficiencies struggle to pay renewable energy generators, increasing lender risk and financing costs, making some projects unfeasible.
Long-term financing is another problem. Renewable projects typically last 25-30 years, but lenders are hesitant to provide loans beyond 10-15 years, creating refinancing risks.
4) Policy Uncertainty: Regulatory Volatility
Frequent policy changes and regulatory shifts create uncertainty for developers and investors. Sudden safeguard duties on imported solar modules, net metering policy changes, and attempts to renegotiate Power Purchase Agreements (PPAs) have damaged investor confidence.
The lack of a comprehensive national renewable energy law results in inconsistent state-level regulations, adding complexity for developers. Overlapping central and state mandates further complicate the regulatory landscape.
5) Manufacturing and Supply Chain Vulnerabilities
India’s reliance on imported solar modules and wind turbine components creates supply chain vulnerabilities and geopolitical risks. The Production Linked Incentive (PLI) scheme aims to boost domestic manufacturing but faces challenges.
Domestic manufacturing of key components like solar cells, wafers, and wind turbine blades is underdeveloped. Lack of scale, higher input costs, and lower technological capabilities hinder competition with global players, particularly those from China.
6) Environmental and Social Considerations
Expanding renewable energy projects present environmental and social concerns. Large-scale solar projects in sensitive areas raise concerns about habitat loss and biodiversity. Wind farms, especially in coastal areas, face opposition due to potential impacts on bird migration and ecosystems.
The Supreme Court’s mandate to underground transmission lines in certain areas to protect the Great Indian Bustard illustrates the tension between renewable energy and conservation. Balancing these requires careful policy and innovative solutions.
In conclusion, despite India’s progress, significant challenges remain. Addressing these requires collaboration between policymakers, regulators, industry, and financial institutions. The sector needs to transition from a subsidy-based model to one that is economically viable and environmentally sustainable for long-term success. Only then can India fully utilize its renewable energy potential and lead the global clean energy transition.
To explore more insights on India’s renewable energy challenges, click here: https://vishwangdesai.hashnode.dev/
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Durgesh Sahu
Source :Individual