Over the past five years, India’s total installed renewable energy capacity has nearly doubled, increasing from a mere 78 GW as of March 2019 to 147 GW as of May 2024. It could be argued that it is not just India but many other economies as well that have witnessed a massive ramping up of renewable energy capacity due to climate change concerns and energy security issues.
While that is true, India has emerged as one of the most attractive renewable energy markets not just in Asia but on a global level, with energy majors and investors all vying for a piece of the country’s growing renewable energy pie. This transformation of the country’s energy sector has been the result of many landmark policy and regulatory changes, and the intent of the enterprising private sector.
Unlike the conventional power sector, where central and state gencos lead in terms of market share, the renewable energy sector has received a substantial boost from private players, with their portfolios growing along with the sector. A transparent and highly competitive auction mechanism, combined with standardised bankable power purchase agreements, has encouraged developers to bid at aggressive prices. Meanwhile, timely interventions on transmission, payment security, permits and the integration of emerging technologies such as storage have helped sustain the growth.
What has certainly worked for India’s renewable energy sector is the continued dialogue between government agencies and the private sector, as well as continued policy action. However, the country lacks somewhat in the alignment of central policies with state-level implementation, especially in matters concerning land and approvals for certain power procurement arrangements. Once this challenge is addressed, the sector will witness exponential growth.
