<div><strong>Arshad Khan</strong></div><div> </div><div>As per the latest report released by consultancy firm KPMG, solar power will be a significant source of energy by the year 2025 and the market penetration of solar power is expected to increase form 5.7 per cent (54 GW) by 2020 to 12.5 per cent (166 GW) by 2025.</div><div> </div><div>The consultancy firm in its study, ‘Enrich 2015’ state that solar power is likely to contribute 4 per cent in India’s aim to reduce carbon emission by 33 to 35 per cent by 2030 from 2005 levels.</div><div> </div><div>The present NDA government made an announcement last month to reduce the emissions intensity by 33-35 per cent by 2030 from 2005 levels, and achieve 40 per cent of its cumulative electric power of around 350GW installed capacity from renewable power ahead of the UN Framework Convention on Climate Change (UNFCCC) to be held in Paris in December 2015.</div><div> </div><div>“A holistic vision is the need of the hour in order to reach 200 million people who are deprived of electricity at a faster rate. I am personally convinced that any amount of investment in this sector will have a quick pay back. This is possible and achievable and I am confident that the era of shortage is over and we are now in the era of surplus. I am hopeful that you will see the economy picking up rapidly and the benefits would be seen across the nation,” said Piyush Goyal, Minister of State (IC) for Power, Coal and New and Renewable Energy, while releasing the report.</div><div> </div><div>The minister also made a new announcement that by 2017, India will not need to import coal except for the coastal regions to meet the demands of thermal plants.</div><div> </div><div>The report titled, ‘The Rising Sun – Disruption on the horizon’ specifies that prices for solar power will fall below the thermal power in near future and there will be surplus use of energy in the sector. For example ‘Solar House’ that is self-sufficient in energy terms could be a reality within the coming decade.</div><div> </div><div>“Solar power and storage are exponential technologies, meaning they could grow very rapidly and take stakeholders by surprise. The rapid rise is good for India but the sector needs preparation by all stakeholders – power generators need to become flexible, discoms should be efficient and retain customers, and the coal sector has to become cost-efficient and flexible to adjust to the evolving scenarios,” said Santosh Kamath, Partner and Head, Renewable Energy Services, KPMG in India.</div><div> </div><div>He added that power sector in the country needs very rigorous long-term planning that prepares for a transformed electricity grid of distributed sources, variable renewable and storage solutions.</div><div> </div><div><span style="color:#ff0000;"><strong>Key Findings from the Study</strong></span></div><div>Ø Solar force is expected to start being felt from 2017 and may accelerate post 2020. Some states which are promoting solar (and also wind power) aggressively, conventional coal generators could see their Plant Load Factors (PLFs) fall by as much as 10-15 per cent by 2020, as solar replaces coal-fired generation in the daytime hours. This effect may speed up post 2020 with the annual addition of large amounts of solar (estimated to exceed by 20 GW per year by 2022-23).</div><div> </div><div>Ø Solar power prices would be approximately 10 per cent lower than coal power prices. The solar rooftop power if combined with storage, it could be cheaper than grid power after 2022 for a large section of the consumers and drive a considerable shift to rooftop power. Government has set a target to achieve 40GW power from solar rooftop in the total 100GW which is to achieve by solar energy by 2022.</div><div> </div><div>Ø There is a need for the government to significantly strengthen the planning infrastructure and processes, and emphasises the energy sector’s need for a new planning paradigm which takes into account the expected emphasis on renewable energy in India.</div><div> </div><div>Ø Conventional generators will need to contribute 60 per cent of incremental capacity needs up to 2025, with solar contributing between 20-25 per cent, and considering another 15 per cent coming from wind. However, these additional capacities will need different attributes from the ones we have seen so far. These attributes are related to flexibility in generation (in terms of ramp rates and minimum thresholds) and low fixed cost, and higher variable cost preference, rather than vice versa.</div><div> </div>
