The path to a greener electricity grid may be paved with good intentions but we mustn’t set targets in stone

In this context, the Central Electricity Regulatory Commission, the central power regulator, recently proposed that electricity generation from wind and solar sources be treated at par with reliable conventional sources like coal and gas when it comes to departures from scheduled supplies.

In its draft order, it has set out a soft escalation scale for deviation penalties. These are quite low right now, but will rise to the level levied on conventional supplies by 2031 if the proposal is adopted. Currently, it is mostly coal-fired plants that step in with extra supplies to meet shortfalls. With the deviation leeway for renewable energy (RE) shortening, these plants will earn more for helping keep the system stable.

In effect, with this proposed intervention, the regulator is seeking to unravel and account for the true cost of RE.

The new norms would push RE developers to invest in advanced forecasting systems or even battery storage units to avoid penalties.

The government, pressured by its target of setting up 500GW of non-fossil-fuel capacity by 2030, has predictably suggested that the regulator defer its stringent rules as it would deter investments. Not only would larger sums need to be invested by RE players, this could combine with greater project risks to raise power tariffs.

Worse, it comes amid such a large pile-up of solar capacity that bulk electricity buyers—state distribution utilities, i.e.—are holding back on signing contracts for supply in the hope that prices will soften further, among other reasons.

Meanwhile, new RE projects are faced with challenges of transmission network access that are taking time to resolve. The conundrum of how to level the field for all power generators was perhaps an inevitable part of our energy transition.

In July this year, the government cut back its full waiver on inter-state transmission charges for RE as a step towards that aim, reducing a special incentive for renewables.

As we forge ahead with plans to decarbonize the country’s grid, much depends on our assessment of economic priorities, the maturity of technologies and the enabling environment. Targets and outcomes need to be set and measured on a broad template. If states choose to reduce the pace of their purchases of green electrons, the Centre should review its RE capacity target.

Besides, we need better integrated planning and execution to ensure that enablers like inter-state transmission systems come up in a timely manner.

Note that the green transition poses yet another conundrum at the consumption end. With the objective of raising the industrial use of renewables, the Centre has mandated minimum consumption obligations for select industries.

However, some find these too steep. India’s steel industry, for example, has argued that the supply and economics of it do not justify a mandate set at 33% of captive usage for the current fiscal year, rising to 43% by 2030.

For target reviews, we could take a cue from Europe, which has long spearheaded green policies. Early last month, EU member states met to scale down an earlier-set target of reducing emissions by 90% from 1990 levels. It’s time we reviewed our aims appropriately too.