With this edition, we celebrate our twelfth anniversary. In these twelve years, we have seen the Indian renewable energy landscape evolve from a mainly policy and incentive-led sector to a very mature and dynamic market-based ecosystem.
Renewable energy is no more limited to just four segments – solar, wind, small-hydro and bioenergy – but has diversified to include hybrids, round-the-clock power, solar plus storage, offshore wind, green hydrogen, and others. Further, the focus is not only on large utility-scale projects that depend on auctions for capacity allocation and discoms for power offtake, but also on more inclusive growth that considers all players in the ecosystem, from developers to utilities to consumers. Thus, the past few years have witnessed an expansion in corporate power purchase agreements, renewable energy trading, rooftop solar projects and solarisation of the agriculture sector.
With the country’s renewable energy deployments being just 1 GW shy of the 120 GW mark as of October 2022, the sector is poised for many more exciting developments. The global energy crisis, amplified by disruptions in supply chains and commodity markets, has put energy security in the front and centre globally and thus, renewable energy capacity is bound to grow by leaps and bounds over the next few years.
India itself is making noteworthy efforts to achieve its target of 500 GW of fossil-free energy capacity by 2030. There have been a host of policy developments this year. Perhaps the most transformative of these were the green hydrogen policy, the open access rules and the offshore wind bid issuance. While open access has been suffering for years due to bureaucratic hurdles and regulatory uncertainties, green hydrogen and offshore wind are new areas of opportunity. And the industry, which has been eagerly awaiting these reforms, has quickly put its growth plans across these segments in motion. These dynamic changes show how far India’s renewable energy sector has come from its early days of feed-in tariffs.
However, like any long-term infrastructure project, the renewable energy space continues to face certain challenges, some old and some new. Land acquisition woes, grid connectivity and transmission constraints, unpaid dues from discoms and delays in PPA signing are some of the issues that have long plagued the sector. Measures have been taken to address these, but they still impede project development.
Meanwhile, the Covid pandemic and the global supply chain disruptions brought on by the current geopolitical situation have led to new concerns, especially regarding the long-term supply security of essential raw materials and equipment needed to build renewable energy projects. Thus, domestic manufacturing of essential components, especially solar cells and modules, has regained interest. Meanwhile, the volatile commodity prices, rising freight costs and surging polysilicon prices have hiked renewable energy project prices. Further, the import restrictions imposed by the government on solar cell and module imports have led to an increase in solar power costs. On the one hand, these import restrictions have raised concerns regarding the country’s extensive solar deployment plans, and on the other, they have been accepted as necessary to reduce imports and promote the adoption of local products.
However, these supply-related issues are expected to be temporary and the industry will adjust to these upheavals soon. The bigger concerns regarding contract sanctity and timely payments, meanwhile, need urgent attention from policymakers and regulators.
Overall, this is a time of significant flux in the renewable energy sector and Renewable Watch is keeping an eye on all these developments and reporting on them for our readers.
P.S.: In this anniversary issue, we have tried to present a composite overview of the renewable energy sector with detailed segment reviews, interviews and guest articles from industry leaders, as well as a comprehensive data and statistics section, and we hope we have been successful in this endeavour. We also take this opportunity to thank our contributors, readers and advertisers, who continue to motivate us.