Karnataka, we hope you would be proud of yourself when we tell you that you're now a renewable energy leader.
So much so that it is single-handedly producing more renewable energy than even European countries like the Netherlands and Denmark which produces around 7.7 GW of renewable energy.
In the last 12 months, the state has left Tamil Nadu behind to become India’s biggest producer of renewable energy with an installed capacity of 12.3 GW (GigaWatts). It includes 5 GW of solar energy, 4.7 GW of wind energy, and approximately 2.6 GW of hydro, biomass, and heat and power co-generation.
Back in 2013, however, Karnataka had a coal power capacity of 6.8 GW, which was much higher than its clean energy capacity of just 4 GW. As of now, Karnataka has a coal power capacity of around 9.8 GW.
But wait, wouldn't you want to find out how Karnataka shifted towards a more environment-friendly production of electricity?
Coal is expensive
In India, wind and solar power have become comparatively cheaper than thermal energy in the last one year. This can be attributed to the thermal power sector being under great stress because of rising electricity tariffs, which in turn are a direct result of a sharp increase in coal prices and a distinct shortage of coal (P.S: We were all told this would happen when we studied EVS in school. Remember?)
However, on the positive side, Karnataka, which was facing a huge power crunch thanks to the state's growing demand of electricity, had to obviously dependent on renewable energy instead of coal-based power (because who wants to leave their AC rooms for even 0.0001 microseconds?).
According to a study by US-based think-tank Institute for Energy Economics and Financial Analysis (IEEFA), released on July 24, this move resulted in a massive push in Karnataka to change its electricity mix.
According to IEEFA, the solar tenders in Karnataka have seen record low bids of Rs 2.82-3.06 (per unit) in recent times, which is below the average Rs 3-5 for domestic thermal power tariffs and the Rs 4-6 tariffs required for imported coal-fired power.
Now when coal-based tariffs are going to be expensive, distribution companies would obviously contract solar and wind which cost below Rs 3 per unit.
Karnataka's innovative policies
The Karnataka government quickly decided to implement multiple policies that would encourage setting up more number of solar parks, try out new technologies and also create an awareness among farmers about trying out renewable energy generation.
For example, there has been a big rise in private power production after the Karnataka Electricity Regulatory Commission (KERC) decided to withdraw a slew of surcharges which were earlier levied on private companies that sold renewable power directly to consumers and not through the state electricity utility.
But to set up more solar plants what do you need first? Land of course. But in India, it's HARD to procure land from farmers for industrial use and leads to many problems. But, the smart-ass that the state government is, it planned a workaround by identifying pockets of the state where agriculture was neither intensive nor remunerative. The government decided to make use of those lands for a fixed payment for a year which in turn led to a good deal for both the government and the farmers.
This move, in particular, helped develop the 2 GW Pavagada industrial solar park, the world’s second-largest such facility that’s under construction.
The state government also implemented a scheme specifically designed to get farmers to produce solar power. Under this, farmers could use government subsidies to switch to solar-powered irrigation pumps and sell the surplus power into the grid.
Additionally, the state also encouraged trying out new technologies such as the solar-wind hybrid where both windmills and solar panels are put up on the same piece of land. Fun fact, Karnataka houses India’s first major hybrid plant.
Will Karnataka keep up with the good work?
However, whether Karnataka will be able to maintain its lead depends majorly on how rapidly the demand grows.
As of today, states such as Gujarat and even Madhya Pradesh have seen a slowdown in renewable energy growth because there is a surplus of supply but a lack of demand for additional capacity.
Also, policies that earlier attracted many renewable energy companies to Karnataka are now being rolled back (Why though?).
But, of course, this was expected too as once the generation cost of renewable energy goes down even below the cost of thermal power, those amazing policies would get moderated. Like in May 2018, the state repealed its order on zero surcharges and also imposed charges on power developers.
Well regardless, Karnataka, you're doing a kick-ass job. Rest of the Indian states, can we learn something from this?
(with inputs from IEFFA report)