According to the Ministry of New and Renewable Energy, India has seen a capacity increase 226 percent in the last 5 years, positioning the country 5th on the world map. The International Energy Agency's recent report also highlighted that during COVID-19 led lockdown the gap between coal and renewables narrowed significantly in India.
The share of coal in the electricity mix has stayed consistently under 70 percent.
Source: International Energy Agency
With an aim to reach 1.75 lakh Mega Watt (MW) by 2022, and 4.5 lakh MW by 2030, Prime Minister Narendra Modi has emphasized that now is the golden opportunity to invest in manufacturing solar panels, storage batteries but the industry has been seeking low-cost funding and policy consistency to keep up the growth momentum.
The central government has brought in liquidity measures for the loss-making distribution companies and it also aims to bring in reforms under c and new electricity bill 2020 to improve governance and functioning of the power sector. The renewable industry is expecting the speed of execution on the recommended amendments and reforms to aid the ease of doing business.
"It is about time to resolve pending dues of discoms to propel growth in this sector. With the privatisation of discoms in UTs, efficiency in this sector is likely to improve. For Independent power producers to support ‘Atma Nirbhar’ Bharat, I believe the only support from the government would be to facilitate scaling up of domestic manufacturing lines and competitive product pricing to match the prevalent tariffs. While there is a slew of financial instruments available to back this sector, with consistency in government policies for at least 5 years at both central and state levels, the present liquidity crunch can be resolved" said Sunil Jain, CEO, Hero Future Energies.
India's renewable energy sector continues to remain one of the world's largest, fastest-growing and most competitive markets in price parity basis. The impact of the coronavirus on public health and the economy, for now, will have the challenge to meet the 2022 target.
"Subsidised power sales, a sluggish economy, and meager demand growth were already hurting Indian distribution companies prior to the pandemic. If the pandemic situation worsens, bank loans for new projects could slow to a trickle. Access to low-cost funding is critical for Indian developers. But, given the volatile global economy, wind and solar sectors in India can still continue to remain attractive to many investors. Because renewable energy projects are typically backed by long-term contracts and sales are insulated from fluctuations in consumer demand, wind and solar could emerge as preferred investment arenas" said Vipul Tuli, Managing Director, Sembcorp Energy India.
In a bid to meet the 4.5 lakh MW target from renewable energy capacity by 2030, India needs a shift in focus from the market to manufacturing. 90 percent of India's solar equipment requirements are imported and mostly from China as its manufacturing is highly competitive on account of the subsidy given by the government. The manufacturing industry believes clarity on safeguard duty on modules and cells expiring in July, implementation of basic customs duty will be key as market is going to grow over 25 percent each year.
"Solar manufacturing is slated to grow 25-30 percent every year for the next 10 years and India is the third-largest market today in the world. Even as capacity utilisation is low for solar, the cost for the battery is coming down drastically with lots of improvements. India needs to target high on manufacturing to become Aatma Nirbhar Bharat along with clarity on safeguard duty ending in July 2020 and implementation of basic customs duty of about 30-40 percent on solar modules and cells. Vikram Solar as a company is ready to increase its manufacturing capacity by 1,500 MW in a year subject to basic customs duty is imposed on solar modules and cells" said Saibaba Vutukuri, CEO, Vikram Solar.
India currently has a manufacturing capacity of about 10,000 MW for modules, 3,000 MW for solar cells, and 10,000 MW for ingots wafer capacity.
According to CRISIL Research estimates, 15,000 MW of Wind-Solar hybrid power will come up over the next five years, riding on strong support from the central public sector undertaking Solar Energy Corporation of India and several state governments.
Renewable energy capacity is now 23.59 percent of the total installed capacity for energy generation of 3,70,499 MW at the end of May 2020 in India. Renewable capacity has grown to 44 percent compared to 1,98,524 MW of coal-based installed capacity.
First Published: IST