Renewable energy installations are growing at a rapid pace in India with 127 GW of total deployments as of May 2023 according to the latest data released by the Ministry of New and Renewable Energy. Solar power is in the lead with 68 GW of total installations as of today with wind power lagging behind with 43 GW of capacity. Other sources like small hydro and biomass also have small shares in the total renewable energy mix.
The recently released National Electricity Plan of the Central Electricity Authority targets 900 MW of total power capacity by 2031-32. Out of this, roughly 40 per cent is expected to come from solar power, which is higher than the 29 per cent share from coal and lignite power. Wind power is expected to make up 13 per cent of the capacity while small hydro, hydro power and pumped storage will contribute only 11 per cent in total. This, going forward, India is expected to be hugely dependent on renewables especially solar power for its power requirements.
While the renewable energy roadmap set out in the National Electricity Plan is quite impressive, significant efforts need to be made to achieve these ambitious targets. The existing challenges in the sector need to be quickly addressed for rapid development to take place.
Thus, clear payment security mechanisms have to be introduced so that developers are paid in time. Further, land acquisition issues need to be addressed with better planning. Similarly, transmission lines and substations have to be constructed in a timely manner to avoid delaying the commissioning of already constructed of projects.
Finally, tariff approvals need to be fast-tracked and time required for permits must be reduced to enable quick turnaround of projects. Often, the time between project award, power purchase agreement signing and tariff approval is so long that the cost parameters and other variables change. Thus, developers’ cost and return estimations might be impacted by the time the project is completed.
Net, net, India’s renewable energy ambitions are achievable provided these existing issues are addressed on priority for sustained industry confidence in the sector.
