Rajasthan can play lead role in India's transition to low emission electricity system: IEEFA

NEW DELHI: Rajasthan can lead renewable energy generation in India, playing a key role in India's transition to a low cost, low emission, profitable electricity system, a report by the Institute for Energy Economics and Financial Analysis (IEEFA) said on Thursday.

According to the report, Rajasthan's installed renewable energy capacity reached 9.6 GW at the end of fiscal 2019-20.

"As India looks to expand its renewable energy capacity, a new report from IEEFA finds that Rajasthan can play a key leadership role in the country's transition to a low cost, low emission, profitable electricity system," a statement by IEEFA said.

Rajasthan added more solar power capacity (1.7 GW) in 2019-20 than any other Indian state, ahead of Karnataka (1.4 GW), the state with the highest installed solar capacity, and Tamil Nadu (1.3 GW).

"Rajasthan has a bright future as a renewable energy leader in India. But its power distribution companies (discoms) are among the worst performing in India," the report's author Kashish Shah, who is a Research Analyst at IEEFA, said.

Expensive coal-fired capacity tariffs coupled with huge aggregate technical and commercial (AT&C) losses led to Rajasthan discoms booking a loss of Rs 6,355 crore (USD 900 million) in 2019-20 after accounting for state government subsidies.

"A shift to cheaper renewable capacity could help alleviate the discoms' financial liquidity and cash flow issues," Shah said in the statement.

Rajasthan has high solar radiation and wind speed. Besides, it has abundant barren land that makes the state suitable for utility scale solar parks. Renewable energy sources currently form 43.5 per cent of Rajasthan's operational installed capacity and produce 17.6 per cent of its total on-grid generation, the statement said.

Meanwhile, the state's 9.8 GW of coal-fired capacity makes up 45 per cent of the total installed capacity and produces 56.5 per cent of total on-grid generation, it added.

"We forecast that the composition of the electricity sector will shift dramatically, with renewables forming 74 per cent of capacity and 63 per cent of total generation by 2029-30," Shah said.

The study's model forecasts a total of 22.6 GW of renewable energy to be added to Rajasthan's grid. This will consist of 18 GW of new solar capacity, of which 3 GW is forecast to be distributed solar capacity.

The study estimates solar will supply 98 per cent of the incremental electricity demand by 2029-30, and that 4 GW of new onshore wind power capacity will serve 45 per cent of the incremental demand.