Renewable targets and auction mechanism to drive India renewables
Join Our Newsletter - Get important industry news and analysis sent to your inbox – sign up to our e-Newsletter here
X

Revised renewable targets and auction mechanism to drive renewable market in India

By GlobalData Energy 10 Sep 2021 (Last Updated September 7th, 2021 14:12)

The renewable power sector in India is expected to grow considerably by 2030, driven by auctions and government policies.

GlobalData’s latest report, ‘India Power Market Outlook to 2030, Update 2021 – Market Trends, Regulations, and Competitive Landscape,’ discusses the power market structure of India and provides historical and forecast numbers for capacity, generation and consumption up to 2030. Detailed analysis of the country’s power market regulatory structure, competitive landscape and a list of major power plants are provided. The report also gives a snapshot of the power sector in the country on broad parameters of macroeconomics, supply security, generation infrastructure, transmission and distribution infrastructure, electricity import and export scenario, degree of competition, regulatory scenario and future potential. An analysis of the deals in the country’s power sector is also included in the report.

Renewable power capacity in India is expected to increase from 91.4GW in 2020 to 310.9GW in 2030, growing at an impressive Compounded Annual Growth Rate (CAGR) of 13% from 2020 to 2030.

India has immense renewable potential and it is one of the top five countries in terms of installed renewable power capacity. Onshore wind, solar PV and biopower are the most prominent renewable technologies in India. Competitive auctions are becoming the most popular mechanism for investment in renewable power projects in India at both the central and state level. The pace of solar tenders has picked up sharply after the announcement of the 100GW solar capacity addition target by 2022.

Favourable government schemes and policies are among the major drivers for the rapid development of the renewable sector in India. The Indian Government promotes renewable power through various policies such as National Solar Mission, the National Wind-Solar Hybrid policy and the National Renewable Energy Act. The government has set a target of 175GW of installed renewable power capacity to be accomplished

by March 2022, which includes 100GW from solar, 60GW from wind, 10GW from biopower and 5GW from small hydropower. However, these targets are not expected to be achieved since the total renewable power capacity by the end of 2020 was only 91.4GW. India reached the 100GW installed renewable power capacity milestone in August 2021 and the 175GW target is expected to be achieved only by 2024-2025.

In the Union Budget 2021-2022, the Indian Government provided an additional funding of INR10bn ($135m) and INR15bn ($203m) to Solar Energy Corporation of India Limited (SECI) and Indian Renewable Energy Development Agency (IREDA), respectively. This additional funding will allow SECI to float 15GW of tenders on a yearly basis. For IREDA, the additional funding will improve its capital adequacy and will also help in the financing of 4.5GW of renewable power projects. The government also announced the performance-linked incentive scheme in the budget, which is aimed towards increasing the local manufacturing of solar PV modules. This scheme will help in increasing the domestic manufacturing of solar PV modules in the country and reducing imports from China.

India was one of the worst-hit countries in the world due to the Covid-19 pandemic. To curb the spread of Covid-19, the Indian Government imposed strict national lockdowns in the country. Several state governments also imposed lockdowns to curb the spread of Covid-19.

With respect to the power sector, the electricity consumption in the country declined by 1.1% in 2020 as compared to 2019. Electricity demand from industrial and commercial sectors declined significantly due to national lockdowns. Several power plants which were under construction were impacted due to lockdowns as there were restrictions on movement and travel. For instance, in June 2020, Adani Power announced that its 1.6 GW thermal power project in Jharkhand has been delayed due to the Covid-19 pandemic. In April 2020, the MNRE provided a time extension for the commissioning of renewable energy projects due to the COVID-19 pandemic. In August 2020, the Ministry approved a time extension of five months in commissioning the deadline of renewable energy projects impacted due to Covid-19 and disruption in the supply chain from China. In May 2021, the Ministry again provided time extension to renewable energy projects due to the second wave of Covid-19 in the country. In June 2021, the Ministry of Power granted a three-month extension to all interstate transmission projects under construction, which have been impacted due to the second wave of Covid-19.

Despite the pandemic, the solar PV market has witnessed rapid growth in India. In 2020, 5.6 GW of solar PV capacity was added in the country.

Up Next