Economy

Clean power push: Govt adds over 50,000 MW in 5 years

G Balachandar Chennai | Updated on January 13, 2020 Published on January 13, 2020

New capacity addition up 52% in April-December 2019 period

The renewable energy sector has made rapid strides under the Modi government with 50 GW plus of new capacity coming into the grid in the last five years.

This is despite the doubts being raised over the government’s target of achieving of 175 GW by 2022.

The December quarter of 2019 saw India’s cumulative clean energy capacity cross 85,000 MW, of which more than 50,000 MW of new capacity addition was achieved in the past five years.

As on December 31, 2019, the total grid-connected installed renewable power capacity in India stood at 85,908 MW, aided by support of several policy measures in recent years, , according to Ministry of New and Renewable (MNRE) energy data.

Five years ago, India’s cumulative grid-interactive clean energy installed capacity was about 33,792 MW.

Though the wind segment is still leading now with a total installed capacity of 37,505 MW as of December 31, 2019, solar is fast growing and is likely to overtake the wind sector in the next fiscal.

The solar segment’s (which includes ground-mounted and rooftop) total capacity was 33,730 MW as of December 2019.

To achieve the 175 GW target by 2022, the sector has to set up 90 GW capacity.

Concerns and issues

However, industry analysts have warned that capacity additions in renewable energy may fall short of the 2022 goal due to headwinds facing the sector.

A couple of months ago a Crisil report stated that tariff caps should be relaxed to improve the viability and attract new players.

Also, it underscored the need for a consistent and stable policy environment, especially as prolonged disputes can hamper the projects’ debt-servicing ability, impacting player-level interest and denting investor confidence.

More cooperation between the Centre and State authorities was sought with a mutual resolve to promote clean energy, given that it now costs significantly less than conventional power.

ICRA recently revised the year-end outlook for the renewable sector recently from stable to negative due to delays in payments from Discoms, execution delays on account of challenges in land acquisition and availability of evacuation infrastructure, among others.

Growth continues

But amid such concerns, the capacity addition in the clean energy sector continues to grow.

During April-December 2019 period, the renewable energy segment added 7,592 MW of new capacity when compared with 5,002 MW of new capacity in the year-ago period, an increase of 52 per cent.

The solar energy segment continues to be the key driver of new capacity growth with an addition of 5,013 MW of new capacity through ground-mounted projects and 537 MW of capacity by way of rooftop projects. The wind sector doubled its addition to capacity at 1,879 MW when compared with 993 MW.

The MNRE has fixed a total capacity addition target of 11,802 MW for 2019-20 (15,602 MW in 2018-19) and solar is expected to be the highest contributor with about 8,500 MW (ground-mounted 7,500 MW and rooftop 1,000 MW), followed by wind (3,000 MW), biomass (250 MW) and small hydro (50 MW).

Though ICRA has estimated total capacity addition in the range of 8.5-9 GW for this fiscal, the sector may achieve more given the trend in recent years when most of the capacity addition happened during the last quarter. Also, it has achieved more than 7.5 GW in the 9-month period itself.

Brushing aside all criticisms, the MNRE has said the government will achieve its ambitious targets, saying that 37 GW worth of projects are in the implementation stage, while another about 30 GW worth projects have already been tendered out.

Published on January 13, 2020
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