‘Clean energy share in total power output set to go up’
MUMBAI: The country’s renewable sector has so far seen a robust bidding activity providing a reasonably healthy visibility for solar and wind capacity addition in the next two fiscals, ICRA experts said. They expect capacity addition of about 8-8.5 GW in FY19.
The share of renewable energy in overall installed power generation capacity has increased from 9 per cent in March 2009 to around 20 per cent (which translates to capacity of around 71 GW) as on June 2018, rating agency ICRA said in a report.
ICRA expects the share of renewables in the total generation mix to increase by 5 per cent in next four years – from 7.7 per cent in FY18 to 12-13 per cent by FY22.
The bidding activity in the renewable energy sector has remained sizeable with central nodal agencies like the Solar Energy Corporation of India (SECI) and NTPC Ltd (NTPC) as well as state distribution utilities issuing bids for wind and solar power capacities of about 10 GW and 15 GW respectively during calendar 2017 and 2018 years. While this auger well for the sector, several key concerns remain.
Renewable projects are likely to remain cost competitive against conventional power sources. However, the imposition of safeguard duty on imported PV modules and the recent rupee depreciation against dollar is estimated to increase the capital cost of solar power projects by 20-25 per cent, though impact of this is partly moderated by the decline in the PV module prices by about 20 per cent since June -2018,” Sabyasachi Majumdar, Group Head – Corporate ratings, ICRA Ltd, said.
He noted that rising interest rates is another factor putting pressure on the bid tariffs as well as on the viability of the wind and solar projects having tariffs less than ₹3 per unit.
ICRA experts also noted that solar and wind energy developers who won capacities in the recent bids are facing challenges in securing connectivity and open access to inter-state transmission network which has resulted in cancellation or capacity downsizing of some of the auctions conducted by SECI.