Rajasthan and Gujarat have surpassed incumbents Tamil Nadu and Karnataka in terms of overall installed capacity of renewable energy in FY22 led by a strong rise in solar power capacity.

Rajasthan is now the leader in overall installed capacity of grid-connected renewable power in the country, followed by Gujarat. Tamil Nadu is in the third position, while Karnataka is at fourth position, down from the number one position a year ago.  

As of March 31, 2022, Rajasthan’s total renewable capacity stood at 17,041 MW up from 10,205 MW a year ago, led by a sharp increase in solar power capacity to 12,565 MW (including 11,494 MW of ground-mounted capacity) in FY22 from 5,733 MW (including 5,314 MW of ground-mounted) in FY21, according to the data provided by Union Ministry of New and Renewable Energy. 

“Rajasthan and Gujarat have potential for solar energy. In Rajasthan, central organisations such as SECI and NTPC are aggregating power and selling it to other States through power-sharing agreements. This is one of the key factors for growth in Rajasthan,” says Manish Gupta, Senior Director, CRISIL Ratings. 

Gujarat’s total renewable capacity increased to 16,588 MW as of March 31, 2022, from 13,153 MW as of March 31, 2021, led by the solar power segment, which saw an increase from 4,431 MW to 7,180 MW, while the State’s wind power capacity also increased to 9,209 MW from 8,562 MW. 

“In Gujarat, State’s Discom is coming out with tenders and more participation is happening. Also, Gujarat’s Discom is among the best. In general, discoms in the country are reeling under financial stress, with a lot of them being unable to pay their dues. But in Gujarat, it is different as the State’s discom is in a better position as far as its financial strengths are concerned,” said Gupta. 

Export-friendly policy

“Both Rajasthan and Gujarat started promoting the export of renewable power. For instance, in Gujarat, a 30 GW RE park is being developed for exporting power to other centres. Their policies also facilitated revenue land allocation for the planned and systematic development of projects, “says Disha Agarwal, Programme Lead, Council on Energy, Environment and Water (CEEW). 

Meanwhile, Tamil Nadu’s total renewable energy capacity stood at 16,099 MW as of March 31, 2022, up from 15,225 MW a year ago. But the State remains the leader in wind energy with an installed capacity of 9,866 MW, followed by Gujarat. Tamil Nadu’s total solar capacity stood at 5,067 MW in FY22, up from 4,475 MW in FY21. 

Karnataka, which was the leader in overall renewable energy capacity in the country a year ago, reported tepid progress in new capacity addition during FY22 as its total capacity reached 15,905 MW as of March 31, 2022, up from 15,463 MW a year ago. The State also lost its leadership position in the solar power segment to Rajasthan in FY22. Karnataka’s overall solar capacity stood at 7,591 MW in FY22 as against 7,355 MW in FY21. 

Discom related concerns

 “According to CEEW analysis, Karnataka and Tamil Nadu have shown high compliance rates with their renewable purchase obligations. In both these States, variable renewable energy accounts for a large share of their total electricity generation. It is about 16.1 per cent for Tamil Nadu, and 24.3 per cent for Karnataka, which is the highest in the country. Therefore, both the States must solve system integration challenges to continue the growth momentum,” says Agarwal.  

Gupta points out that though Tamil Nadu attracts a lot of investments in clean energy, Tamil Nadu’s discom is under severe stress as it has not increased tariffs for years and there are delays in payments to generators. Hence, the ability to attract new developers is limited from the discom’s perspective. Karnataka is strong in renewables, but discom related concerns remain here too.