Tariffs from round-the-clock green power projects competitive with those from coal: ICRA | Mint
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Business News/ News / India/  Tariffs from round-the-clock green power projects competitive with those from coal: ICRA
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Tariffs from round-the-clock green power projects competitive with those from coal: ICRA

It projected that the share of renewable energy in India's overall electricity generation will increase from 23% in FY23 to around 40% in FY30.

ICRA estimates that 20 GW of renewable energy capacity will be added in the current financial year and another 25 GW in the next. Premium
ICRA estimates that 20 GW of renewable energy capacity will be added in the current financial year and another 25 GW in the next.

Tariffs from round-the-clock (RTC) renewable energy projects have become competitive with those from conventional thermal power, according to ICRA, a professional investment information and credit rating agency.

During a webinar on the India’s renewable-energy space and the outlook for the sector, Vikram V, vice president & sector head - corporate ratings, ICRA, noted that the share of RTC projects is likely to rise in the upcoming bids.

“The tariffs discovered in the RE-RTC tenders so far remain highly competitive against the conventional sources, with recent bid tariffs in the range of Rs. 4.0-4.5 per unit, well below the Rs. 5.2 per unit discovered in the recent medium-term bid for supply from coal-based projects," he said.

“The share of RE-based RTC projects is expected to rise in upcoming bids, as already seen from the tenders issued by the Solar Energy Corporation of India Limited (SECI) in the current fiscal. The returns for the winning developer under the RTC bids remain linked with the cost of the storage component, apart from the cost associated with the wind and solar components."

According to the presentation, based on the prevailing capital cost of battery energy storage systems (BESS) and pumped hydro storage (PSP) projects, the viability of the RTC projects remains better with the use of PSP capacity.

It projected that the share of renewable energy, including large hydro projects, in India's overall electricity generation will increase from 23% in FY23 to around 40% in FY30. It noted that given the intermittency associated with renewable energy generation, the availability of round-the-clock supply from renewable energy sources remains important.

“This can be made possible through the use of wind and solar power projects complemented with energy storage systems," it said.

ICRA estimates that a total of 20 GW of renewable energy capacity will be added in the current financial year and another 25 GW is likely to be added in the next fiscal. On India’s target of installing 500 GW of renewable-energy capacity by 2030, it noted that this would require an annual addition of 35-40 GW. This, is said, requires smoother land acquisition, more transmission infrastructure and a domestic renewable-energy supply chain.

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ABOUT THE AUTHOR
Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Published: 07 Dec 2023, 07:45 PM IST
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