India’s Green Energy Revolution: Lower Costs and Big Plans for Solar and Green Hydrogen
New Delhi, India – India’s potential to become the lowest-cost green ammonia producer is a game-changer in the global energy market. This advantage is due to India’s lower costs in solar photovoltaic (PV) and wind energy, which are significantly cheaper compared to global averages.
According to a report, India’s finance costs, currently around 10%, could further enhance its competitiveness in the green ammonia market. NITI Aayog predicts that India’s green ammonia production costs could be approximately 29% lower than China’s and 43% lower than Australia’s by 2030.
Reliance Industries Leading the Way
Many Indian companies, including Reliance Industries (RIL), are set to play a pivotal role in India’s new energy journey. RIL plans to commission the first phase of its solar PV manufacturing by the end of FY25, scaling up to 20GW by CY26. RIL has secured Production Linked Incentives (PLIs) for both solar modules and green hydrogen production, amounting to USD 0.7 billion.
Government Initiatives
The Indian government is committed to boosting domestic solar module manufacturing through its Solar PV Modules PLI-Tranche II, which has allocated Rs 140 billion for 39.6 GW of domestic capacity. This initiative aims to add 48GW of solar module manufacturing capacity over the next three years.
The PLI scheme is instrumental in making India one of the lowest-cost producers of solar modules, currently 23% cheaper than the global average and 6% lower than China. The allocation of 6GW each to RIL and IndoSolar for end-to-end PWCM manufacturing capacity marks a milestone in India’s energy sector.
Challenges and Opportunities
While India is making strides in the new energy sector, China faces challenges in its lithium-ion battery market. Despite a 14% year-on-year drop in lithium-ion battery prices in 2023, China’s manufacturing capacity is expected to exceed demand by 3.6 times by the end of CY24.
The recent crash in input prices across the value chain, coupled with India’s PLI rollouts for modules, electrolyzers, and batteries, has enhanced the country’s economies of scale. Solar module prices have reached all-time lows, dropping 49% year-on-year as of August 2024, while lithium-ion battery prices have slid 14% year-on-year.
These developments, along with ongoing government initiatives, are expected to accelerate India’s timeline for achieving round-the-clock renewable energy at a green hydrogen cost of USD 1/kg, ahead of the original CY30 target.
Doubts Revealed
Green Energy -: Green energy is energy that comes from natural sources like the sun, wind, and water. It doesn’t pollute the environment.
Green Ammonia -: Green ammonia is a type of ammonia made using renewable energy sources like solar and wind. It’s used in fertilizers and can help reduce pollution.
Reliance Industries -: Reliance Industries is a big company in India that works in many areas like energy, petrochemicals, and telecommunications.
Solar PV -: Solar PV stands for Solar Photovoltaic. It’s a technology that converts sunlight directly into electricity using solar panels.
GW -: GW stands for Gigawatt. It’s a unit of power. One gigawatt is equal to one billion watts.
Government Incentives -: Government incentives are rewards or benefits given by the government to encourage people or companies to do something, like using green energy.
Rs 140 billion -: Rs 140 billion means 140,000,000,000 rupees. It’s a large amount of money that the Indian government is spending to support solar energy.
Lithium-ion battery -: A lithium-ion battery is a type of rechargeable battery commonly used in gadgets like mobile phones and electric cars.
Renewable Energy Goals -: Renewable energy goals are targets set by a country to use more energy from natural sources like the sun and wind, instead of fossil fuels.
