India’s renewable energy sector is undergoing transformation and disruption, with solar and wind tariffs hitting record lows.
The country’s global ranking in terms of installed renewable energy capacity, too, has improved in the last couple of years. In solar energy, India’s ranking has jumped to 6th from 11th in 2015. Global ranking for wind energy too has seen an improvement from 5th spot to 4th, according to Ministry of New and Renewable Energy (MNRE).
Earlier this month, tariff for wind energy hit a record low of Rs 2.43 per unit, quoted during an auction conducted by Gujarat Urja Vikas Nigam Ltd. Solar tariff had hit all-time low in May for Rajasthan’s Bhadla Phase-III solar park.
The disruption from plunge in tariffs was happened due to a fall in Chinese spot module prices, which have come down around 70-80% since 2010. In 2010-11, solar energy tariffs were in the range of Rs 10.95 to Rs 12.76 per unit.
The government now wants to promote Indian solar modules to transform the solar space. As a result, there may be a ‘safeguard duty’ on solar imports. If this happens in 2018, Indian manufacturers will have a larger role to play in the sector, which will bring about a transformation in the business that heavily relies on imports.
The PM Modi-led government has set a target to achieve 175 gigawatt (GW) installed renewable energy capacity by 2022 and from 16.8 gigawatt as of March 2010, country’s total renewable capacity rose to 57.2 gw as of March 2017 and touched 62 gw in November this year, with share of renewables reaching 18.37% of the total installed capacity.
Of the total 62 gw of renewable power installed, 27 gw was installed since May 2014 and 11.79 gw since January 2017.
The 175-gw target includes 60 gw from wind power, 100 gw from solar power, 10 gw from biomass power and 5 gw from small hydro power.
During this calendar year, a total of 11.788 megawatt (mw) or 11.79 gw of grid-connected power generation capacity from renewable energy sources has been added till November, as per statistics with MNRE.
In the current fiscal, 4,809.51 mw capacity has been added till November-end. Whereas, the target for the fiscal was set at 14,550 mw or 14.55 gw of grid renewable power has been set for 2017-18, of which 4,000 mw is wind, 10,000 mw is solar, 200 mw is small hydro power, 340 mw is from biomass power and waste to power of 10 mw.
As per the wind capacity bidding programme announced by MNRE, in the next three months, it proposes to issue bids for a capacity of 5 gw followed by 10 gw each in FY2019 and FY2020 so as to achieve the cumulative wind capacity target of 60 gw by FY2022.
Tulsi Tanti, chairman and managing director of Suzlon Energy, said, “In India, investors are bullish and excited to be part of the renewable growth story. The declining wind and solar tariffs, advent of competitive bidding in wind energy, and policy reforms are steering new possibilities. This momentum will continue to gather speed.”
“While FY18 will be a transition year due to the introduction of the (new) bidding regime (for wind power), FY19 onwards, industry will deliver over 6,000 mw of new capacity. In fact, industry is poised to grow to about 8 gw to 10 gw annually, with 5 to 6 gw annual bidding from the central government level, 3 to 4 gw capacity auctions from the nine windy states and 1 gw capacity expected from the PSU and captive markets. All this put together, the size of the market will become 10 gw in the near future. This will pave the way to unlock 300 gw wind energy potential in India, delivering higher volumes and harnessing the latent potential of non-windy states.”
However, Girishkumar Kadam, sector head and vice president of Icra Ratings said, “The timely completion of the project awards and subsequent signing of both power purchase agreements by the nodal agency – Solar Energy Corporation of India Ltd (SECI) and back to back power sale agreements (PSAs) by SECI with state-owned distribution utilities is required. Also, the willingness to participate and sign PSAs by discoms especially in states with limited wind energy potential remains critical.”
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Earlier this month, wind energy tariff hit a record low of Rs 2.43 per unit; All-time low for solar tariff was at Rs 2.44/unit
India’s global ranking in terms of installed renewable energy capacity, too, has improved