Renewable energy investments in India jumped to $10.9 billion in 2015 from the annual average of $8 billion in the last three years, driven by the solar energy sector, which for the first time beat the wind power sector in attracting capital, according to a report.
India joined countries like China, Africa, US and Latin America, which also saw an increase in clean energy investments. The global clean energy investment now stands at $328.9 billion, up 4 per cent from $315.9 billion in 2014, as per data available.
Bloomberg New Energy Finance said the record performance has come despite a crash in fossil fuel prices. Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance, said these figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices.
He added, “They highlight the improving cost-competitiveness of solar and wind power, driven in part by the move by many countries to reverse-auction new capacity rather than providing advantageous tariffs, a shift that has put producers under continuing price pressure.”
Liebreich said wind and solar power are now being adopted in many developing countries as a natural and substantial part of the generation mix, as they can be produced at cheaper rates than the often high wholesale power prices. Also, they reduce a country’s exposure to expected future fossil fuel prices. Above all, he said, they can be built very quickly to meet the unfulfilled demand for electricity. “It is very hard to see these trends going backwards, in the light of December’s Paris Climate Agreement,” he added.
The Narendra Modi-led BJP government has set an ambitious target of achieving 100 gigawatt of solar capacity and 60 gigawatt of wind power by 2022. The year 2015 also saw many wind producers in India entering the solar power sector and solar power tariffs hit new lows.
India has committed at the Paris climate conference to raise the share of non-fossil fuel power capacity in the country’s power mix to 40 per cent by 2030 from the current 30 per cent. The government is also working providing power for all by 2019.
The 22 per cent increase in investment in India’s renewable energy industry in 2015 has brought it closer to the highest-ever investment mark of $13.1 billion achieved in 2011, says data from Bloomberg New Energy Finance. This rise is largely attributed to the utility scale (large projects) solar sector, where investment reached $5.6 billion, up 80 per cent from $3.1 billion last year, it added.
Investments in wind energy have stayed relatively flat at $4.1 billion in 2015, which is also the average for the last three years, the data showed. Bloomberg New Energy Finance said solar investments have risen for the third year in a row, driven by the 11-gigawatt capacity allocation in 2015 to independent power producers through various state and national-level programmes.
Apart from interest from wind energy players like Suzlon, Mytrah and Renew Power, the solar energy sector has also seen interest from foreign firms like Sky Power and Japan’s SoftBank. “The increase in investment mirrored the optimism generated by the pro-renewable energy policies introduced by the incumbent Narendra Modi-led BJP government,” the report said.
Bloomberg New Energy Finance expects clean energy financing to reach record numbers in the next two years, beating the 2011 best of $13.1 billion.