The draft Bill is the bedrock of the revolution which will help India supply clean and affordable electricity
During this Budget Session, the Parliament is expected to consider the draft Electricity (Amendment) Bill, 2021, that has proposed far-reaching changes, including measures for further “de-licencing” the power distribution business. Under this provision, a consumer can change his/her choice of supplier and purchase electricity based on preference, tariff, clean energy the supplier is using or simply buy it from neighbours. This would be just like any mobile phone user switching or selecting the operator. The only difference is that the consumer will be using the same electricity wire, poles and transformer. This move is expected to improve efficiency and foster competition in the power sector. But more significantly, it will allow localised energy trading and hasten the adoption of renewable energy. Till now, India’s green energy sector was riding on large solar installations, but it will soon reach a saturation point due to land scarcity and grid adaptability constraints. The report of the Expert Group on Energy pegged renewable capacity of 175 gigawatt (GW) by 2022, with a break-up of 100 GW from solar, 60 GW from wind and 15 GW from other sources. Out of the 100 GW of solar power, 40 GW is to be generated from rooftop panels, which at present seems unrealistic but should have been the core of the renewable development plan.
The Standing Committee on Energy (2019-20), Ministry of New and Renewable Energy, pointed out that there should have been an installed rooftop solar capacity of 16,000 MW by 2018-19, but as of October 15, 2019, the installed capacity was only 1,826 MW. This means that only 11.50 per cent of the target has been achieved so far. As of September 2020, the cumulative installation for large solar panels stands at 32 GW or 50 per cent of the target. Whereas rooftop solar panels only achieved eight per cent of the set target. Rooftop solar installation does not require dedicated land and can be installed in built-up areas, whereas, traditional solar plans require dedicated land. India has around 187 million residential units that have the potential to ramp up the installed capacity up to 90 GW. Adding commercial and other structure can even double the capacity.
While India is lagging, Australia is leading in solar rooftop installation where residential photovoltaic (PV) accounts for 61 per cent of installed PV capacity. There are over two million small-scale installations around the country with a capacity of eight GW. According to the University of New South Wales and APVI (Australian PV Institute), 21.6 per cent of all houses (excluding apartments) in Australia now have a PV system installed. Allowing peer-to-peer trading of electricity can open up infinite revenue models for a solar PV (with or without storage) investment. This has potential to improve income for peri-urban prosumers (consumer plus producer) who can now sell their electricity at a much higher price. Today, India is at the forefront of power sector reforms and is bringing changes through domestic and international initiatives. The ‘Ujwal DISCOM Assurance Yojana (UDAY)’ had helped in reducing the collective loss of utilities from about 24 per cent to 18 per cent of revenue. Setting up the International Solar Alliance (ISA) has brought countries together for reducing their carbon footprint by enhancing solar power production. To secure such transactions, the block-chain method should be experimented with extensively. This process will not only encourage faster rooftop adoption but will also create an opportunity for Indian entrepreneurs to capture the global market. In short, the proposed Bill is the bedrock of the green electricity revolution which will help India fulfil its objective of supplying clean and affordable electricity to all.
(The writer is Fellow, India Development Foundation. The views expressed are personal.)