India’s renewable energy boom is leading to soaring transmission costs as the country’s transmission network is being built on estimates of potential renewable power generation not on actual capacity or demand, according to a top electricity market executive.
This approach to transmission leads to surging transmission charges that state power utilities have to pay, Ghanshyam Prasad, chair at the Central Electricity Authority (CEA), said at an energy event on Friday.
The authority will now look to revise transmission plans every six months to take stock of real-time capacity and demand, Prasad said, as carried by Reuters.
India is struggling to accommodate the massive renewable energy buildout which could lead to developers installing renewable energy generation capacity that cannot be transmitted or sold, the official added.
The country will also need to continue investing in other electricity sources, including coal, hydropower, gas, and nuclear, to keep the grid reliable, Prasad said.
“Until we see the system holistically — planning, execution, grid operation, and cost — we will go wrong,” he noted.
In July, India boasted achieving five years ahead of schedule its target to have 50% of its installed electricity capacity coming from non-fossil fuel sources.
Despite booming renewable capacity additions, India continues to rely on coal to meet most of its power demand as authorities also look to avoid blackouts in cases of severe heat waves.
Coal-fired power generation and capacity installations in India continue to rise, and coal remains a key pillar of India’s electricity mix, with about 60% share of total power output.
This jump in installed renewable capacity does not mean renewable power generation will soon replace coal in India, especially if grid constraints and battery and transmission delays persist.
India’s federal government is in discussions with state governments to have them buy more renewable sources for power generation, Indian federal Minister of New and Renewable Energy, Pralhad Joshi, said in September.
By Tsvetana Paraskova for Oilprice.com
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