CEA Chief warns of energy transition challenges
POWER & RENEWABLE ENERGY

CEA Chief warns of energy transition challenges

India's transition to renewable energy requires an estimated Rs 45 trillion in financing by 2030, Ghanshyam Prasad, Chairperson of the Central Electricity Authority (CEA), said at the Economic Times Energy Leadership Awards. With current financial models and approval delays, the sector faces domestic stress, especially as reliance on imported technologies persists. Prasad emphasised the urgent need for faster, innovative financing mechanisms and a focus on domestic manufacturing to ensure energy security. "We cannot depend on imports; we need homegrown solutions," he said.

Prasad stressed the need to quickly improve energy storage technologies, particularly hydro pump storage and battery energy systems, to support India's growing renewable energy ambitions. He highlighted that India’s solar capacity is expected to grow from 85 GW to 300 GW by 2030, and up to 1,200 GW by 2047, placing immense pressure on transmission lines and grid management. "Without efficient storage and grid systems, managing the transition will be extremely challenging," he added. Prasad also underscored the challenges India faces in integrating imported technology. He pointed to the issues with wind turbines, which were not fully aligned with Indian environmental conditions. "We must ensure that technology adopted from other countries is customized to fit Indian requirements," Prasad said, suggesting that a tailored approach could prevent further setbacks in the sector.

The financing hurdles faced by India’s renewable sector were a key focus of Prasad’s speech. He noted that while capital is available, the approval process is too slow, often taking more than a year, far exceeding the typical 12-18 month project timelines for solar and wind installations. “We need a different business model for financing—one that ensures approvals in two to three months,” he suggested, advocating for a shift from individual project financing to portfolio-based mechanisms. Prasad proposed a rolling finance mechanism, where developers could receive ongoing funding based on their projects’ performance, reducing financial strain and allowing for quicker expansion. “Developers are overwhelmed with projects, and they need financing models that support their rapid scaling,” he said, highlighting the need for asset monetization to free up funds for new projects.

India’s dependency on imported equipment, especially in high-demand sectors like transformers, was another critical concern raised by Prasad. He noted that India still struggles to meet demand for key components domestically, which poses a serious risk to energy security. “We need a roadmap for domestic manufacturing to reduce our reliance on imports,” he stressed, pointing to the need for indigenous production to meet the country’s renewable energy goals.

Prasad also highlighted the role of policy and research and development (R&D) in driving India’s energy transition. He called for greater investment in high-risk R&D projects, particularly in areas like long-duration energy storage. "Without investment in innovation, India will miss the bus on leading global energy technology," he warned. The CEA chair concluded by emphasizing the need for a unified approach, where technology, policy, and finance work together to achieve India's ambitious energy goals.

India's transition to renewable energy requires an estimated Rs 45 trillion in financing by 2030, Ghanshyam Prasad, Chairperson of the Central Electricity Authority (CEA), said at the Economic Times Energy Leadership Awards. With current financial models and approval delays, the sector faces domestic stress, especially as reliance on imported technologies persists. Prasad emphasised the urgent need for faster, innovative financing mechanisms and a focus on domestic manufacturing to ensure energy security. We cannot depend on imports; we need homegrown solutions, he said. Prasad stressed the need to quickly improve energy storage technologies, particularly hydro pump storage and battery energy systems, to support India's growing renewable energy ambitions. He highlighted that India’s solar capacity is expected to grow from 85 GW to 300 GW by 2030, and up to 1,200 GW by 2047, placing immense pressure on transmission lines and grid management. Without efficient storage and grid systems, managing the transition will be extremely challenging, he added. Prasad also underscored the challenges India faces in integrating imported technology. He pointed to the issues with wind turbines, which were not fully aligned with Indian environmental conditions. We must ensure that technology adopted from other countries is customized to fit Indian requirements, Prasad said, suggesting that a tailored approach could prevent further setbacks in the sector. The financing hurdles faced by India’s renewable sector were a key focus of Prasad’s speech. He noted that while capital is available, the approval process is too slow, often taking more than a year, far exceeding the typical 12-18 month project timelines for solar and wind installations. “We need a different business model for financing—one that ensures approvals in two to three months,” he suggested, advocating for a shift from individual project financing to portfolio-based mechanisms. Prasad proposed a rolling finance mechanism, where developers could receive ongoing funding based on their projects’ performance, reducing financial strain and allowing for quicker expansion. “Developers are overwhelmed with projects, and they need financing models that support their rapid scaling,” he said, highlighting the need for asset monetization to free up funds for new projects. India’s dependency on imported equipment, especially in high-demand sectors like transformers, was another critical concern raised by Prasad. He noted that India still struggles to meet demand for key components domestically, which poses a serious risk to energy security. “We need a roadmap for domestic manufacturing to reduce our reliance on imports,” he stressed, pointing to the need for indigenous production to meet the country’s renewable energy goals. Prasad also highlighted the role of policy and research and development (R&D) in driving India’s energy transition. He called for greater investment in high-risk R&D projects, particularly in areas like long-duration energy storage. Without investment in innovation, India will miss the bus on leading global energy technology, he warned. The CEA chair concluded by emphasizing the need for a unified approach, where technology, policy, and finance work together to achieve India's ambitious energy goals.

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