India to add 145 GW of RE capacity by 2027: IEA – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/economy/india-to-add-145-gw-of-new-re-capacity-by-2027-iea/article66243512.ece

The renewable energy share in the country’s total generation mix is likely to increase to 40.9 per cent during FY30

India, the world’s third-highest energy consumer, is expected to add 145 gigawatts (GW) of renewable energy (RE) capacity in the next five years, with solar energy accounting for 75 per cent of the addition, aided by consistent policy support and ambitious pledges made at COP26.

The International Energy Agency (IEA) in its latest report said that India is set to double its new RE capacity installations over 2022–27, led by solar PV and driven by competitive auctions implemented to achieve the ambitious target of 500 GW of non-fossil capacity by 2030.

“With the addition of 145 GW, India is forecast to almost double its renewable power capacity over 2022–2027. Solar PV accounts for three-quarters of this growth, followed by onshore wind with 15 per cent, and hydropower providing almost all the rest,” IEA said in the report, Renewables 2022.

Renewable capacity deployment will be dominated by utility-scale plants contracted through competitive auctions. However, distributed PV is expected to be increasingly important thanks to growing consumer awareness and continued policy support, it added.

The Central Electricity Authority (CEA) said in a report that the share of generation from renewable energy in the country’s total generation mix, which stood at 22.1 per cent during FY22, is likely to increase to 40.9 per cent during FY30.

So far, a total of 172.72 GW of capacity from non-fossil fuel-based energy resources has been installed in the country as of October 2022, which includes 119.09 GW of RE, 46.85 GW of large hydro, and 6.78 GW of nuclear power capacity. This has a share of 42.26 per cent of the total installed generation capacity in the country (408.71 GW).

RE auctions

Production Linked Incentives (PLI) initiative closes nearly 80 per cent of Indian manufacturers’ investment cost gap with the lowest-cost manufacturers in China.

Even though India’s auction volumes declined in 2022, the participation rate rose thanks to policy improvements. From January to September 2022, India auctioned over 8 GW of renewable capacity, 30 per cent below the average for these months in 2019–2021, the IEA report said.

This slowdown was caused by auction organisers focusing on finalising PPAs and developers prioritising the execution of projects already under construction, it added.

Almost one-quarter of the capacity awarded since 2021 has been contracted through hybrid auctions that require multiple renewable technologies to provide power at specified minimum annual capacity utilisation factors. These auctions usually result in the addition of significantly more capacity than what has been contracted, along with energy storage to ensure compliance with power availability requirements.

The undersubscription rate fell to just 10 per cent in 2022, with most auctions significantly oversubscribed. Reducing off-taker risks prompted greater auction participation as the number of auctions held by national rather than state agencies increased and the solar parks programme advanced, facilitating land procurement and grid connection, the IEA said.

On the demand side, higher renewable purchase obligations, which were announced in July 2022 and specify targets for wind, hydro, and other RE sources (solar, bioenergy), should further encourage power utilities (Discoms) to procure RE. Increasing participation in auctions, an expanding project pipeline, and higher RE demand from Discoms are all expected to accelerate utility-scale capacity growth in India over 2022–2027, it noted.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s