India’s drive to ensure sustained development is largely dependent on the status of its infrastructure and the energy sector. Although the country has added significant power capacity after 2003, India still suffers from significant shortages of electricity .. Multiple challenges faced by the energy sector – such as overcoming the energy deficit and defining a low-carbon development path – needs to be addressed in order to meet the nation’s aspirations.
….Faced with these critical challenges, India is seeking to harness alternative energy sources [to coal] in order to secure its development objectives and provide 24x7 power supply to all citizens and stakeholders.
It is in this context that the Government’s target of adding 175 GW of renewable energy capacity could be the fulcrum for India’s energy security. This step means India will skip creating fossil-based assets and would directly leapfrog into the renewables era. Thereby, consumers in India would not have to pay the cost of stranded fossil fuels-based power plants.
Considering the above, measures suggested below could help India achieve its target of 175 GW by 2022:
• India needs to focus on commissioning solar farms of 50 MWp (megawatt peak) and 200 MWp sizes. A solar farm of this size has economies of scale, while the energy generated from it would be consumed locally. Therefore, no additional distribution network is needed, which means the cost of transmission will be lower. Above all, the commissioning time for a mid-sized solar is anywhere between 6 and 12 months.
1. According to the article above how might Indian solar farms achieve economies of scale if they produced a large quantity of output? (10 marks) 200 words
2. Briefly, what challenges would any firm face when increasing its total output in the short-run as opposed to the long-run? In your answer consider firm cost curves in the short and long-run. (No diagrams required- but you can describe cost curves) (10 marks) 200 words