Economy

Indian power sector adds more new capacity in FY20 vis-à-vis FY19

G Balachandar Chennai | Updated on May 11, 2020 Published on May 11, 2020

Renewables’ share grows to about one-fourth from 12% in 5 years

The Indian power sector (includes both conventional and renewables) managed to add more new capacity in FY20 than the previous fiscal amid some challenges.

For the third year in a row, the renewable sector added more new capacity than conventional energy sector and the clean energy sector now accounts for close to one-fourth of the total installed energy capacity in the country.

The total capacity addition of conventional and renewable segments stood at 15,776 MW in 2019-20 when compared with 14,204 MW in 2018-19.

For 2019-20, the conventional sector (including coal-fired and hydro categories) added a new capacity of 7,065 MW, up 25 per cent from 5,672 MW in 2018-19. In this, the coal-fired sector added a net capacity of 6,765 MW when compared with 5,532 MW in 2018-19. Hydro segment added 300 MW when compared with 140 MW in FY19, according to the data of Central Electricity Authority.

The renewable energy sector’s total new capacity addition stood at 8,711 MW in 2019-20 when compared with 8,532 MW in 2018-19. But, in these periods, both conventional and clean energy segments failed to meet the capacity addition targets due to several challenges faced by the respective sectors.

While renewable energy sector achieved only 74 per cent of the target (11,802 MW) for 2019-20, conventional segment’s new addition in FY20 was only 58 per cent of the target (12,186 MW) for the fiscal.

Renewables on the rise

Even though the Indian power sector continues to be dominated by conventional sources of energy (coal, diesel, gas, nuclear and large hydro), which accounts for nearly three-quarters of the country’s installed power generation capacity, there has been a progressive shift towards renewable sources (wind, solar, bio and small hydro).

In the last five years, the share of renewable energy (wind, solar, biopower and small hydro) in installed capacity has increased from 11.8 per cent (32 GW in March 2015) to 23.5 per cent (87 GW in March 2020). On the other hand, the share of thermal sources viz coal in installed capacity has been on the decline — from 61 per cent to 54 per cent — during this period, according to analysts at CARE ratings.

As of March 31, 2020, India’s total installed capacity (includes thermal, nuclear, hydro and renewable) stood at 3,70,317 MW. In this, the coal-fired segment’s share was 1,98,734.5 MW, while renewable energy sources accounted for 87,028 MW. Though the gap is wide, renewable is the second big segment after coal-fired category in total capacity.

While the western region leads in coal-fired power capacity at 72,935 MW, the southern region leads in renewable capacity at about 42,400 MW.

The power sector in the country has been affected by the prevailing slowdown in the Indian economy. The emerging economic disruption caused by the coronavirus pandemic would add to the weakness in the sector. As a result, India’s power sector performance is expected to see a significant decline in 2020-21, pointed out CARE Ratings’ analysts.

Published on May 11, 2020

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