Solar power set to play key role in India’s energy future – KPMG report

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Solar power in India could scale up substantially to become a significant energy source by 2025, playing a key role in the country’s efforts to reduce emission intensity of its GDP, a report on the sector predicted.

The report by consulting firm KPMG predicted that market penetration of solar power was expected to be 5.7 per cent (54 GW) by 2020 and 12.5 per cent (166 GW) by 2025.

India aims to reduce emission intensity of its GDP by 33 to 35 per cent by 2030 from 2005 levels, and solar power is likely to contribute 4 per cent towards this target, said the report ‘Rising Sun – Disruption on the horizon’ released jointly by Piyush Goyal, Minister of State with independent charge for power, coal, and new and renewable energy and Dharmendra Pradhan, Minister of State with independent charge for petroleum and natural gas at ENRich 2015, KPMG in India’s annual energy conclave.

The report said that the disruptive force of solar power is expected to start being felt from 2017 and may accelerate post 2020. In 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).

It said that the price for solar power had declined and was within 15 per cent of the coal power prices on a levelised basis. By 2020 the prices were expected to about 10 percent lower than coal power prices. The solar rooftop power, today, is already competitive compared to grid power for many consumers and, as per the report, 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. A ‘Solar House’ that is self-sufficient in energy terms could be a reality within the coming decade.

“We need to re-engineer our process to create energy efficiency and conservation to give India an affordable energy access. It is important that we remove all disparity at the root level to ensure social harmony for all in India and also to compete globally. A holistic vision is the need of the hour in order to reach 200 million people at a faster rate,” Goyal said.

 According to Pradhan, energy security and accessibility was important for the overall well-being of the nation. “It is important that we identify the energy requirements and accordingly come up with a vision plan, making it our focus for the coming years. A comprehensive energy policy is the need of the hour,” he said.

Manish Aggarwal, Partner and Head – Energy and Natural Resources, KPMG in India ,said the power sector in India was going through a significant change and solar was expected to play a dominant role in it.

“This presents a great opportunity for India, especially in the current political-social environment where the country has embarked on a vision to have energy security, by providing affordable and sustainable power to all,” he said, adding that the issue was not about coal vs solar since India needed to harness all its natural resources for achieving energy security at affordable prices, which at the same time provides reasonable return to investors.

 

 

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