New capacity adds 1.2 GW to renewables kitty

The fiscal year 2021-22 appears to have started off on a positive note for the renewable energy sector as the first two months saw more than 1.2 GW of new capacity added to the grid amid challenges faced by the developers in the sector.

The total installed renewable power capacity in the country increased to 95.66 GW as on May 31, 2021. This included 41.09 GW of solar capacity, 39.44 GW of wind power capacity, 10.34 GW of bio-power, 4.79 GW of small hydro power capacity, according to data from the Union Ministry of New and Renewable Energy.

MNRE says 50.89 GW worth of projects are at various stages of implementation, while projects for a capacity of 29.52 GW are under various stages of bidding. About 3,156 MW of renewable energy tenders were issued in May 2021 alone.

“Capacity addition to overall power generation in the first two months of the current financial year (April-May ‘21) has been the highest in the last four years when compared for the same months in the previous years. During April-May period of FY22, 1.2 GW of new generation capacity was installed, and this was solely contributed by renewable energy viz. solar and wind power,” says CARE Ratings.

Solar and wind

Capacity addition in solar and wind power segments in the first two months of FY22 has been double that of the same months of FY21. One GW of fresh solar power capacity was installed, and 0.2 GW fresh capacity was added by the wind sector.

During Q1 of pandemic-hit FY21, the renewable sector added just 592 MW of new capacity, while the average capacity addition was about 1,600 MW during the Q1 of previous three years.

As of May 2021, the total domestic electricity generation capacity was at 383 GW with conventional energy capacity being 288 GW (75 per cent share in total) and renewable energy capacity at 96 GW (25 per cent). Coal-based power — the dominant source of electricity in the country — has an installed capacity of 209 GW (55 per cent share in total). “Since 2016-17, capacity addition to solar power has been surpassing that of all other sources of energy,” states CARE Ratings.

Slow progress

Meanwhile, India is facing challenges in meeting its ambitious renewable capacity addition target of 175 GW by the end of 2022. With just a year left, the sector has so far achieved only about 55 per cent of the capacity addition target.

While the pandemic has disrupted the project works in the past one year, delays in power supply agreements are also cited as one of the key factors for slow progress in new capacity addition. However, industry analysts expect the pace of execution to pick up this fiscal with several recent policy steps by the Power Ministry relating to tariff orders and Centre’s lending support to the renewable projects, among others.

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