Gujarat is set to add 46 gigawatts (GW) of new renewable energy capacity by 2029-30, according to Institute for Energy Economics and Financial Analysis (IEEFA) report.
India government has set a renewable energy target of 523 gigawatts by 2030 for the entire country.
“Though Gujarat has incurred the cost of the recent bailout of its unviable imported thermal coal capacity at Mundra, refocusing efforts on continuing its already promising renewable capacity additions would see the state come out on top as the country’s renewable leader,” Tim Buckley, co-author of the report and director of energy finance studies with IEEFA, said.
While Gujarat lifted its renewable energy target to 30GW from 17GW in July 2019, the state could be more ambitious, with India’s Ministry of New and Renewable Energy estimating Gujarat’s renewable energy potential to be 72.7GW, equally balanced between solar and wind energy potential.
IEEFA models renewables additions of 4-5GW annually to ensure all of Gujarat’s incremental demand going forward is supplied by renewables. This would be a dramatic shift in Gujarat’s electricity sector composition, with renewables forming 70 percent of its capacity and 48 percent of generation by 2029-30.
IEEFA notes the incorporation of nearly 55GW of intermittent renewable energy on Gujarat’s electricity network would require very active measures and investment on the grid integration and balancing front.
IEEFA recommends a multi-technology approach with storage solutions of pumped hydro and battery storage, flexible gas peakers, demand response management, faster ramping coal power, solar thermal with storage, rooftop solar plus behind-the-meter storage, as well as continued grid expansion and modernisation.
“Gujarat is already well in the race for building renewables capacity between states such as Tamil Nadu, Karnataka, Maharashtra, Andhra Pradesh and Rajasthan with similar renewable energy potential,” Kashish Shah, IEEFA energy analyst, said.
Gujarat is also taking the leadership position in preparing for investment in offshore wind as a step change in cost reductions is achieved over the coming decade. Offshore wind also brings a strong diversification and more consistent year-round generation supported by utilisation rates of upwards of 50-60 percent.
Gujarat, with 6.5GW of wind capacity, is India’s second-best state for wind, behind Tamil Nadu (9.2GW) As of June 2019. Gujarat has added 430MW of wind power capacity during FY2018-19 and another 519MW during the first three months of FY2019-20.
Gujarat fell behind Karnataka, Telangana, Rajasthan, Andhra Pradesh and Tamil Nadu for total solar power capacity in FY2018-19. Cancellations of auctioned capacity, with discoms forcing a tariff renegotiation, have been detrimental for the progress of renewable energy.
Gujarat will require about 5GW of capacity additions from FY2019-20, assuming that half of the targeted capacity of 30GW of renewable energy by FY2021-22 will be solar.