Policy

Renewable energy sector misses target for 5th year in a row

Chennai | Updated on July 01, 2021

The solar segment has now overtaken wind and tops the capacity addition table   -  imacoconut

Sector added about 7356 MW of capacity against the targeted 14380 MW for FY21

 

New capacity addition in the renewable energy sector fell far short of its target in Covid-battered fiscal year 2021 (FY21) with the sector adding just a little over half of what was originally intended. With the lower addition in FY21, the sector has missed its capacity addition target for the 5th year in a row.

As against the capacity addition target of 14380 MW for FY21, the renewable energy sector added only about 7356 MW, which is just 51 per cent of the target for the fiscal. In FY20, the sector added 8711 MW of new capacity to the grid.

“The lower capacity addition can be attributed to the lockdown and supply-side disruptions (which slowed movement of inputs and has led to an increase in prices), labour shortages as well as constrained finances and liquidity pressures faced by the developers. Also, the restriction on the imports of inputs for solar power has aggravated the constraints faced by developers. Project timelines have been extended as a result, further aggravating the financial stress of developers,” a CARE ratings report said.

Solar segment shines

With the addition of 7356 MW in FY21, the cumulative renewable energy capacity has increased to 94.4 GW as of March 31, 2021. The Solar segment has now overtaken Wind and tops the capacity addition table with a total capacity of 40.09 GW, as compared to the wind segment’s capacity of 39.24 GW. Bio-power and small hydro had capacities of 10.31 GW and 4.79 GW respectively.

In the last three years, new capacity additions slipped below 10,000 MW, while in FY18 and FY17, the clean energy sector added 11,754 MW and 11,320 MW respectively. “Projects worth 49.7 GW are at various stages of implementation and projects of 25.91 GW capacity are under various stages of bidding,” said a note from the Union Ministry of New & Renewable Energy.

The Government has set a target of achieving 175 GW installed renewable energy capacity (excluding large hydro) by December 2022. Even if all the projects, which are under implementation or bidding, get completed and come on-stream before the end of next year, the target will be missed.

However, the Government has been taking various measures to accelerate capacity-addition in the renewable sector. They include recent Production Linked Incentive (PLI) scheme and additional capital infusion to Solar Energy Corporation of India and IREDA, among others.

Published on April 16, 2021

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