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STATE FOCUS
Karnataka – Charging ahead on India’s energy transition The Indian state of Karnataka boasts RE share of 62 percent in its power mix and has made concerted efforts towards making Bengaluru, its capital city, the EV capital of India. What remains to be seen is how it will maintain the pace required to sustain the growth.
Source: wikimedia
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arnataka has been a model for India’s service sector-driven growth over the last decade. Its contribution to India’s GDP of as much as 10 percent makes it a crucial state for the country’s sustained growth prospects. In 2017-18, Karnataka became the top state in India for renewable energy capacity, providing a clear leadership and endorsement of the much-needed electricity sector transformation. Ever since, it has retained its leadership position in the Indian RE growth story. As of early June, Karnataka has an installed capacity of 15.2 GW of RE, followed closely by Tamil Nadu. During the financial year 2018-19, 1.3 GW of RE projects were commissioned against a target of 1.9 GW.
The state also possesses the largest solar park in the country at Pavagada which now stands completely commissioned at a capacity of 2,050 MW. The state is also the leader in terms of solar
installations, with 7.1 GW of gridconnected solar PV installed and another 1 GW in development stage. The state boasts of RE share of 62 percent in its power mix, followed by thermal and nuclear at 35 percent and 2.5 percent, respectively. The share of solar in the total installed capacity is around 22 percent.
The Pavagada solar park Source: tumkur.nic.in
Being the leader, Karnataka has also set long term targets. As per the RE policy, the state has set a target of having non-solar RE generation at 6 GW by 2022. It also has set the objective of making Karnataka an investor-friendly State for all forms of renewable investments. The recent RE success in Karnataka is a result of its prudent energy policies and commitment to comply with renewable purchase obligations enforced by the central government. The fully subsidized open access model for solar power has allowed businesses and developers to mitigate payment and offtake related risks, purchase cheaper and more reliable power supplies, while overcoming the barriers posed by loss-making Stateowned distribution companies. The state has suffered from an over-reliance on imported coal for its electricity needs in the past decade
| May-June 2020
and has been left with no options but to import electricity from other states or purchase expensive power from the open market. Karnataka does not require any further thermal capacity additions in the coming decade except possibly to replace the 1.7 GW Raichur station, which should be retired as per the guidance in the 2018 National Electricity Plan. The decade-long ambition to build mega-size gas import capacity and gas-fired power projects has met no success and has rather ended in a waste of capital, land and political effort. The currently under-construction Yelahanka gasbased power project might have to be considered for conversion into a peak-hour power supply facility and even then, without time differentiated tariffs the project could be commercially unviable.
According to BNEF projections, the levelized cost of electricity for coal and gas-fired generation is projected to be much higher than that of Indian wind and solar over the coming decade. The competition will force either tariff re-negotiations or refusal of expensive thermal power purchase, resulting in more stranded thermal power assets in the state. The state
