India has done a phenomenal job in making strides towards the growth of large-scale renewable energy projects across India. However, there is a need to think beyond utility-scale Solar PV and wind power to accelerate the transition to 90%+ renewable energy. This paradigm shift must include decentralized energy resources (DERs) that are necessary to solve the last-mile issues in rural and peri-urban areas. In addition, the integration of DERs with the national grid will ensure stability as more utility-scale Solar PV and wind power come online.
Decentralized renewable energy (DRE) can ignite a wave of opportunity for MSMEs as well as households in rural and peri-urban areas, and accelerate the GDP growth in rural India, which in turn may further boost the GDP growth of India beyond 8% per year. In fact, DRE has a market potential exceeding US $50 billion (INR 4 lakh crores), according to the Council On Energy, Environment And Water report (CEEW). A key enabler for DRE is a supportive regulation that creates a framework to democratize the energy sector, making it easier to produce and consume solar electricity. India is currently dealing with the last-mile agriculture value chain, which accounts for around 30% of its energy consumption. Furthermore, India’s energy today is mostly generated by fossil fuels such as coal and diesel, hence it is crucial to recognize DRE as the solution for the last mile agriculture value chain.
Recently, in a significant push towards sustainable development, the Union Cabinet approved an INR 75,021-crore package for the “PM-Surya Ghar: Muft Bijli Yojana” to promote rooftop solar installations across India. The scheme aims to provide 300 units of free electricity every month to one crore households through rooftop solar installations.
This initiative aims to position DRE as a cornerstone of India’s energy future. It promotes a decentralized model for electrifying households and businesses nationwide through renewable sources. Although India missed its 2022 target of 40 GW for rooftop solar installations, achieving only 11 GW, the new program could provide momentum towards the revised 100 GW goal for 2026. As of 2022, the country’s overall rooftop solar generation capacity stood at 63.3 GW, indicating substantial room for growth in this segment.
Rooftop solar is pivotal for making power more affordable, enabling households to realise substantial savings on their electricity bills and injecting much-needed financial relief. Moreover, the ability to generate surplus energy creates a win-win scenario by allowing households to earn additional income through selling excess power to distribution companies.
Environmentally, this decentralized approach contributes to reducing carbon emissions, fostering cleaner air, and combating climate change – crucial components of India’s path to achieving net-zero emissions by or before 2070. DRE aligns perfectly with these goals, facilitating a transition towards cleaner energy sources while moving away from fossil fuels.
AI and the Rise of DRE
The use of predictive artificial intelligence (AI) will play a crucial role in India’s journey of achieving its stated target of net zero while still meeting the growing energy demand from 1.4 billion people.
In today’s DISCOMs framework, customer satisfaction remains a persistent challenge. The customers are seen as a ratepayer and customer service is practically non-existent. Using predictive AI to accurately predict customers’ real-time energy demand and utilizing that information to manage the power generation system will form the key to providing 24/7 uninterrupted power in rural areas.
Imagine a summer month where the daytime temperature is expected to exceed 40C on multiple days. And it is not uncommon even in rural and peri-urban areas to have customers use air conditioners at home. Consider a scenario where the temperature is expected to exceed 45C the next day. And that each customer in a region is connected via a smart metering system. The power of AI can be utilized to predict the energy demand in that region very accurately (an error rate of less than 20%) as smart meters would have collected energy demand patterns over a long period. AI can then be utilized to not only predict the high energy demand in real-time but also selectively turn off air conditioning units to balance the energy supply and demand. Of course, customers must be incentivized to allow AI to control appliances like ACs. This becomes a WIN-WIN situation as AI would have averted the possibility of a blackout and customers who allowed their ACs to be turned off for an hour or so would have been offered a discount.
Furthermore, the insights gained from these predictive models can aid in optimizing energy distribution and grid management. Utilities and energy providers can leverage this data to better understand demand patterns, anticipate peak loads, and make informed decisions about resource allocation and infrastructure planning.
Multiplier-Effect On The Energy Sector
While renewable energy comes with numerous benefits, the awareness around it is relatively low. According to a recent study by CEEW, rooftop solar is not a popular option among residents due to low awareness of their impact, which results in an unwillingness to pay. Addressing this lack of awareness, the new scheme takes a positive approach by incentivizing urban local bodies and panchayats to promote rooftop solar systems.
Even so, households who are aware and have the requisite rooftop space, are deterred by the high initial costs, cumbersome installation process, and long payback period. This poses a financial challenge, especially for marginalised communities or individuals with limited resources, making it difficult to invest in renewable energy infrastructure. Recognizing these financial deterrents, recent amendments in electricity rules aim to streamline the installation process, encouraging more households to embrace solar energy. The “PM Surya Ghar: Muft Bijli Yojana” also offers households additional income through the sale of surplus power to DISCOMs.
The adoption of DRE won’t just lead to a financially responsible way to accelerate the energy transition, but it will also create quality jobs in rural and peri-urban areas. It will facilitate a transition to renewable energy and foster a collaborative environment between the public and private sectors. By leveraging solar energy, Muft Bijli Yojana is designed to generate approximately 1.7 million direct job opportunities, contributing significantly to India’s economic growth and sustainable development.
The Way Ahead
The future of energy lies in the integration of decentralized power generation and distribution, which will be commercially possible because of the power of AI. As we navigate the path towards a sustainable future, continued government support for enabling policies is crucial to heighten the benefits of DRE. While India needs to get to net zero emissions by 2070, the stated target can be brought forward to 2050 by disseminating a more fair, equitable, and decentralized way of power generation and distribution that is primarily and most importantly renewable.
