Renewable capacity commissioning started to pick up as India’s second wave of Covid-19 faded. In the first seven months of FY2021/22, a record number of 8.6GW of the renewable energy (RE) capacity was installed, with 7.6GW of that being solar. When compared to year-over-year renewable deployments of about 5.7GW in the FY2019/20 as well as 2.6GW in FY2020/21, this is a significant increase. During the first 7 months of FY2021/22, investment in the RE industry increased dramatically, reaching US$14.2 billion, up from US$5.1 billion in the FY2019/20 as well as US$1.8 billion in the FY2020/21 for the very same period.
Since July 2021, when a 2.5-year solar anti-dumping tariff regime on the imported solar modules and cells ended, solar producers have been taking advantage of a “duty-free” window to import modules. The window will close in April 2022, when a 40 percent basic customs duty (BCD) will be levied. However, module prices have risen due to raw material supply chain bottlenecks in the solar module manufacturing industry. India is attempting to develop considerable domestic module manufacturing capacity in order to lessen its reliance on imported modules, which are subject to price fluctuation.
India’s renewable capacity additions could exceed 15GW at this rate of solar commissioning. Thermal capacity has suffered net losses on the grid over the same time period, having 2.1GW of the coal-fired capacity added vs 2.4GW withdrawn by October 2021.
To reach renewable energy ambitions, the investment must increase.
At COP26, India’s climate action promises drew mixed reviews. Many applauded the near-term goal of generating 50% of power from clean energy sources, but many were disappointed by the lack of a detailed plan to shut down coal power generation capacity. India, on the other hand, has pledged to phase out coal-fired power facilities. This is a significant commitment from a developing nation with lofty goals for economic growth and other social goals like energy security and job creation.
The shift to clean energy is going to be market-driven, given the pressing need to guarantee energy security as well as self-reliance in order to fulfill India’s expanding electrical demand. Renewables, as the most cost-effective source of electricity, are going to win the race in the long run.
Annual capacity additions will have to increase to 35GW by 2030 to fulfill the mega objective of about 450GW of the renewable energy capacity (500GW incorporating large hydro). This will necessitate significant investments not only in the renewable energy capacity, yet also in transmission and distribution network growth and modernization, as well as critical grid firming technologies like battery and pumped hydro storage.
The renewable energy business in India saw a lot of money flow in October 2021. This includes the following:
Adani Green Energy has completed its 100 percent acquisition of Soft Bank’s SB Energy for US$3.5 billion, with a total capacity of 5GW.
Reliance Industries’ newly-established division Reliance New Solar Energy has completed a 100 percent acquisition of REC Solar Holdings, Norway’s leading solar cell and module manufacturer.
The IREDA (Indian Renewable Energy Development Agency) has approved a loan of US$184 million to renewable energy firm Vector Green.
Cleantech Solar secured a loan of US$26 million from the NIIF (National Infrastructure Investment Fund).
NIIF, which is a sovereign wealth fund, partly held by the Indian government and backed by Axis, ICICI, HDFC, and Kotak Mahindra.