By Elton Gomes
India has been witnessing a steady rise in the share of renewable energy (RE) in the overall generation mix. This is why credit rating agency ICRA expects the country to add 10,000 megawatts of renewable energy in fiscal year 2020, and has maintained a stable outlook for the sector.
The share of renewable energy in the generation mix has increased from 5.6 percent in FY2015 to 7.8 percent in FY2018.
“This rise is owing to the large-sized capacity addition in the wind and solar power segments during this period, driven by policy support from central and state governments as well as the significantly improved tariff competitiveness of wind and solar power vis-a-vis conventional power sources,” ICRA said, as per a PTI report.
ICRAs group head, corporate ratings, Sabyasachi Majumdar said the project awards by the central nodal agencies and state distribution utilities in 2017 and 2018 provide a reasonably healthy visibility for renewable energy capacity addition in FY2019 and FY2020. India can expect an addition of about 9,000 MW in FY2019 and about 10,000 MW in FY2020, Majumdar said.
The renewable energy sector however remains exposed to near-term challenges arising due to the cost impact of safeguard duty and rising interest rates, along with transmission network availability, ICRA said.
The average bid tariffs discovered in the auctions for wind and solar projects in 2018 has so far remained at Rs 2.6-2.7 per unit, and had only increased slightly from the low of Rs 2.4 per unit.
This uptrend in bid tariffs was partly driven by factors such as cost headwinds arising from rising interest rates, increase in capital costs due to imposition of taxes and duties, rupee depreciation against dollar for imported equipment; and rising equipment costs, ICRA said, as per a report in the Economic Times.
World Bank lauds Indias renewable energy auctions
The World Bank, on Monday, lauded Indias success in renewable energy auctions that delivered record-setting low prices for solar power. The World Bank said the number of countries with strong policy frameworks for sustainable energy has more than tripled in number — from 17 to 59 — in the eight years till 2017.
A large number of the world’s largest energy-consuming countries significantly improved their renewable energy regulations since 2010, the World Bank said in its report title Regulatory Indicators for Sustainable Energy (RISE) 2018.
The report was released on the sidelines of the 24th Conference of the Parties to the UN Framework Convention on Climate Change (COP24).
Among countries with large populations living without electricity, by 2017, 75 percent had policies and regulations needed to expand energy access. However, there remained several areas that acted as barriers to global progress in producing sustainable energy.
India signs $300 million agreement for energy program
Earlier, in August, the Government of India, the Energy Efficiency Services Limited (EESL), and the World Bank signed a $220 million loan agreement and an $80 million guarantee agreement for the India Energy Efficiency Scale-Up Program.
The program was to be implemented by EESL. It will help in increasing the deployment of energy-saving measures in residential and public sectors. Additionally, the program will also strengthen EESLs institutional capacity, and enhance its access to commercial financing.
The Program will help tackle the financing, awareness, technical and capacity barriers faced by new energy efficiency programs and support the UJALA program of the Government of India, said Sameer Kumar Khare, Joint Secretary, Department of Economic Affairs, Ministry of Finance.
This is one of the several steps being taken by the Government of India to meet its climate change commitments to reduce carbon intensity by 33-35 percent by 2030, Khare added.
Elton Gomes is a staff writer at Qrius