According to the Investment Information and Credit Rating Agency of India Limited (Icra), India’s renewable energy generation capacity addition in FY23 is expected to be 16 gigawatts (GW).
“Growth prospects are strong, given India’s commitment to reduce emissions and meet half of its energy needs from renewable sources by 2030,” Icra said in a statement on Monday, adding that “investment requirements remain large, ranging from $450 billion to $500 billion to meet RE capacity targets by 2030.”
This environmental campaign is expected to assist India in fulfilling its climate promises stated at the COP-26 session in Glasgow.
Indian Prime Minister, Mr. Narendra Modi committed at the November summit of Glasgow (2021) to boost the country’s non-fossil fuel power generation capacity to 500GW and cover half of the country’s energy needs with renewables by the end of the decade. The Central Electricity Authority’s report says India’s electricity demand will climb to 817 GW by 2030.
“With a large project pipeline of over 55 GW and highly competitive tariffs offered by these projects, the outlook for capacity addition in the renewable energy (RE) sector remains strong,” the statement said, adding, “The capacity addition witnessed a strong recovery in the first eight months of FY2022 with 8.2 GW added against 3.4 GW added in 8M FY2021.”
With a total non-fossil-based installed energy capacity of 157.32GW or 40.1 percent of total installed electrical capacity, India has met its nationally decided contributions target. Solar, wind, and hydropower each account for 48.55 GW, 40.03 GW, and 51.34 GW of this total. India’s installed nuclear energy-based electrical capacity is 6.78 GW.
“The backlog of projects awarded by central nodal agencies and state distribution utilities remains substantial, with more than 55 GW of solar, wind, and hybrid capacity under development.” According to the announcement, “Icra forecasts the RE capacity addition to expanding from 7.4 GW stated in FY2021 to 12.5 GW in FY2022 and further to 16.0 GW in FY2023 based on this pipeline,” said Girishkumar Kadam, senior vice president, and co-group head, corporate ratings, Icra.
Around 63 GW of renewable energy, capacity is now under construction, with non-fossil fuel installed power capacity forecast to reach 66% by 2030.
“The downside risks for the renewable energy sector in the near term emanate from the execution headwinds and supply chain challenges for procuring modules and wind turbine generators (WTGs). Moreover, the average price of imported solar PV modules (Mono PERC) have increased by over 35% over the past 12 months, putting upward pressure on capital costs for solar power projects,” the statement said.
Modi also pledged at the Glasgow summit to reduce India’s total projected carbon emissions by 1 billion tonnes and the nation’s carbon intensity by less than 45% by 2030, and to attain net-zero carbon emissions by 2070.
From 2014-15 to June 2021, India’s green energy projects got $7.27 billion in foreign direct investment. During the 2020-21 fiscal year, $797.21 million was received.
“Notwithstanding the same and the recent hike in GST rate for solar power equipment, the solar bid tariffs continue to remain highly competitive as seen from the quoted bid tariff of ₹2.17 per unit in December 2021. The ability of the developers to secure modules within their budgeted costs and cost of debt funding at less than 8.5% remains important to make these projects viable. On the other hand, the wind segment continues to witness subdued capacity addition owing to execution headwinds, financing challenges for few developers, and weak financial profile of some of the OEMs leading to supply-side constraints,” the statement said.
The government has approved a $12,031 crore plan to build infrastructure to transfer electricity generated by renewable energy projects, with the goal of increasing green energy output and meeting 50% of the country’s energy needs by 2030.
“Coming to the collection performance, the overall dues to RE IPPs from distribution utilities (discoms) in the eight key states have gone up by 43% to ₹194 billion as of December 2021 from ₹136 billion as of July 2021,” the statement said.
Resource: LiveMint
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