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NEW DELHI: India’s renewable energy generation capacity addition in FY23 is estimated at 16 gigawatt (GW), according to ratings agency Icra.
“Growth prospects robust with India’s commitment to reducing emissions and meeting 50% energy requirement from renewable sources by 2030," Icra said in a statement on Monday, adding that, “Investment requirement remains large at $450 billion - $500 billion to achieve the RE capacity targets by 2030."
This green push is expected to help India meet climate commitments it made at the COP-26 summit in Glasgow. At the November summit, Prime Minister Narendra Modi pledged to increase the country’s non-fossil fuel power generation capacity to 500GW and meet 50% of its energy requirements from renewable sources by the end of this decade. The Central Electricity Authority estimates India’s power requirement to rise to 817 GW by 2030.
“The outlook for the capacity addition in the renewable energy (RE) sector remains strong with a large project pipeline of over 55 GW and the highly competitive tariffs offered by these projects," the statement said and added, “The capacity addition witnessed a strong recovery in the first eight months of FY2022 with 8.2 GW added against 3.4 GW added in 8M FY2021."
India has achieved its nationally determined contributions target with a total non-fossil based installed energy capacity of 157.32GW, which is 40.1% of the total installed electricity capacity. Of this, solar, wind and hydropower account for 48.55 GW, 40.03 GW and 51.34 GW, respectively. India’s nuclear energy-based installed electricity capacity stands at 6.78 GW.
“The backlog of the projects awarded by the Central nodal agencies and state distribution utilities remains large with under-development solar, wind and hybrid capacities of more than ~55 GW. Basis this pipeline, Icra expects the RE capacity addition to increase from 7.4 GW reported in FY2021 to 12.5 GW in FY2022 and further to 16.0 GW in FY2023," Girishkumar Kadam, senior vice president and co-group head, corporate ratings, Icra, said in the statement.
About 63 GW of renewable energy capacity is under various construction phases, and installed power capacity from non-fossil fuels is expected to go up to 66% by 2030.
“The downside risks for renewable energy sector in the near term emanate from the execution headwinds and supply chain challenges for procuring modules and wind turbine generators (WTGs). Moreover, the average price of imported solar PV modules (Mono PERC) have increased by over 35% over the past 12 months, putting upward pressure on capital costs for solar power projects," the statement said.
At the Glasgow summit, Modi also promised to cut India’s total projected carbon emission by 1 billion tonnes and carbon intensity of the nation’s economy by less than 45% by 2030 and achieve net-zero carbon emissions by 2070. India’s green energy projects received foreign direct investments worth $7.27 billion from 2014-15 to June 2021. Of this, $797.21 million was received during 2020-21.
“Notwithstanding the same and the recent hike in GST rate for solar power equipment, the solar bid tariffs continue to remain highly competitive as seen from the quoted bid tariff of ₹2.17 per unit in December 2021. The ability of the developers to secure modules within their budgeted costs and cost of debt funding at less than 8.5% remains important to make these projects viable. On the other hand, the wind segment continues to witness subdued capacity addition owing to execution headwinds, financing challenges for few developers and weak financial profile of some of the OEMs leading to supply side constraints," the statement said.
The government recently cleared a ₹12,031 crore plan to set up infrastructure to transmit electricity from renewable energy projects as it seeks to boost the output from green sources and meet half of the nation’s energy requirement from them by 2030.
“Coming to the collection performance, the overall dues to RE IPPs from distribution utilities (discoms) in the eight key states have gone up by 43% to ₹194 billion as of December 2021 from ₹136 billion as of July 2021," the statement said.
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