For hundred years, conventional fossil-fueled power plants were at the core of power systems around the world. Electricity grids of the twentieth century were designed to distribute power from large, centralized coal, gas, nuclear, and hydro generating plants to far-flung end users.

But the renewable sources of energy are different. To harness the benefits of renewable energy, there is requirement of rethinking and reengineering of institutions, the redefinition of policies, the re-tuning of power grids and related systems, and the replacement of old mental inertia with new ones.

The question is why do we need this inertial change? Is it out of compulsion or is it a well-thought out choice? Answer to this question is not simple; rather it is embedded in the human quest for a cleaner path of development. This may be appreciated from the facts revealed in the Intergovernmental Panel on Climate Change (IPCC) report published in 2018, which stated that to prevent warming of the Earth more than 1.5 degrees Celsius (1.5°C) over pre-industrial levels, carbon emissions must be slashed to net zero by around 2050. If we hold this true, as many believe, renewable energy must make up 70 to 85 per cent of electricity by 2050. In a nutshell, without a stable electricity supply, countries will not be able to power their economies.

Acknowledging that clean energy is a necessary part of the long-term response to climate change and energy security for nations, the countries came together to enhance the pace and scale of innovation during the Paris Climate Conference in 2015. Each participating country vouched for trying to double their investment in research and development (R&D) in the next five years in clean energy.

According to the Global Trends in Renewable Energy Investment Report 2018, record 98 gigawatts of new solar capacity, far more than the net additions of the rest other renewables, fossil fuel and nuclear was installed across the globe in 2017. For the eighth year in a row global investment in renewables has exceeded to $200 billion. Overall, China continues to remain the world’s largest investor in renewables.

Renewable energy is central to combating climate change as well as reducing air pollution and improving public health by decreasing pollution and emissions. The enormous benefits they bring, includes zero fuel, electricity prices free from volatility and external influence, reduced imports, dramatically reduced pollution and water use. However, most renewable energy sources have zero fuel costs but they are more capital-intensive than conventional fossil power plants.

According to REN21’s Renewables 2019 Global Status Report, at least 100 cities across the world reportedly generated 70 per cent or more of their electricity from renewable energy sources in 2018. Presently, more than half the people in the world live in cities and together these cities account for around 65 per cent of global energy demand, thereby contributing to around 75 per cent of global carbon dioxide (CO2) emissions. Thus, renewable energy has become integral for these cities efforts to reduce CO2 and other harmful emissions, despite being more capital-intensive than conventional fossil power plants.

The writing on the wall is quite evident. The world is moving towards clean energy sources, despite these being capital-intensive and having uncertainty in their generation. However, despite this progress in renewable energy, the world is still short of meeting the targets of the Paris Agreement — to restrict global greenhouse gas emissions to “well below” 2 degrees Celsius above pre-industrial levels.

The Indian story on renewable energy is also encouraging. For instance, the latest report of International Energy Agency (IEA) highlighted that for three straight years, spending in renewable sector exceeded that on fossil fuel-based power, due to government schemes supporting solar Photo Voltaic and wind energy. NITI Aayog in one of its reports indicated that one of India’s major advantages today going forward is that its renewable energy potential is vast and largely untapped. Recent estimates indicate that India’s solar potential is greater than 10,000 GW and its wind potential could be higher than 2,000 GW.

However, the grim reality is that Indian economy is crippling with energy shortages at present. On the other hand, rate of energy consumption is likely to increase at one of the fastest rates in the world due to population growth, rising urbanization and economic development. Theoretically speaking, for economic as well as environmental reasons India needs to shift to non-polluting renewable sources of energy to meet future demand for electricity. Practically, there are instances which support this thought process. For instance, despite having huge reserves of coal, the country’s ability to mine that coal and move it around the country is constrained. Further, unlike domestic coal, the price of imported coal is unregulated and volatile depending on demand-supply dynamics in the international market. Distribution companies (discoms) that buy electricity from plants fired with imported coal have tried to avoid these high costs by simply not buying imported coal or power fueled by imported coal, even when the same has resulted in local shortages and rolling blackouts.

This particular fact refreshes the memory of the Great Indian Outage, stretching from New Delhi to Kolkata which occurred on 30-31 July 2012. This blackout, due to failure of the northern power grid, affected nearly 700 million people – twice the population of the United States – and rendered them without electricity. A grid failure of such magnitude highlights India’s massive demand for electricity, together with its struggle to generate as much power as it needs.

So, the time has come, in the light of existing bottlenecks in the conventional and polluting sources of energy and need for combating climate change, to increase the relative share of the renewable energy in the energy-mix of the country. As pointed out by NITI Aayog in one of its report, India’s energy sector is set for a sea change with recent developmental ambitions of the Government of India, mainly 175 GW of installed capacity of renewable energy by 2022, 24X7 Power for all by 2022, Housing for all by 2022, 100 smart cities mission, 10% reduction of oil and gas import dependence by 2022 from 2014-15 levels and provision of clean cooking fuels.

A powerful combination of enabling trends and demand trends, evident in multiple developed and developing nations is helping power generation from solar and wind to compete on par with conventional sources. The success of the renewable sources will depend on the fact that whether these would reach price and performance parity on the grid and at the socket vis-à-vis non-conventional and traditional sources of energy. Gradually, it is being said that wind and solar have reached grid price parity and are moving closer to performance parity with conventional sources.

As the global leader, China is propelling the ascent of emerging markets in renewable energy growth as it is the only market above 100 GW for both sources. Moreover, overwhelming majority of the solar photo-voltaic suppliers and wind companies are Chinese. Auctions have helped turn India into the world’s most competitive renewable energy market, with new players joining the fray. These are some of the positive developments, but constraints still exist.

Market mechanisms by themselves are insufficient to drive the renewable energy transition at the speed required to outrun climate change and fossil fuel depletion. There exists need for the Government policies to direct sufficient capital toward building renewable energy capacity, to manage the build-out of energy storage and necessary grid upgrades, to manage the evolution of this sector in the energy-mix of the country.