MNRE targets 14,380 MW of capacity addition in for FY21

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

The higher capacity addition target for FY21 comes at a time the renewable energy sector has been struggling to add new capacity   -  THE HINDU

The Union Ministry of New and Renewable Energy (MNRE) has fixed a high capacity addition target of 14,380 MW for the renewable energy sector for this fiscal amid Covid-19-related uncertainties.

The target for FY20 was 11,802 MW.

In the current fiscal, the fast-growing solar segment is expected to add about 11,000 MW (9,000 MW from ground mounted projects and 2000 MW via rooftops), while wind power segment is expected to bring in about 3,000 MW. The remaining will be added by small hydro, biomass /captive power and waste-to-power categories.

The higher capacity addition target for FY21 comes at a time the renewable energy sector has been struggling to add new capacity.

Solar growth

The past two years saw the segment adding only 8,000-plus MW per year though solar remains the major driver of new capacity addition.

Industry analysts see a challenging environment where things are changing on a day-to-day basis. The lockdown disrupted the supply chain, while currency related fluctuations made component costs unpredictable. Rooftop solar installations also severely affected due to lockdown.

“We are cutting our solar demand forecast by about 40 per cent to 5 GW from our previous estimates based on the Covid effect on the market,” according to Raj Prabhu, CEO of Mercom Capital Group.

Government backing

But, according to MNRE Minister RK Singh, the government had taken several measures in the past few months to enhance confidence of investors. The Ministry was continuing auctions amid lockdown and recent tariff finalisation for Solar Energy Corporation of India’s 400 MW project and NHPC’s 2,000 MW solar projects reflected investor confidence in the renewable growth story.

During the first two months of this fiscal, the renewable sector has added 306 MW, including 176 MW of ground-mounted solar units and 111 MW of rooftop projects.

Industry representatives also admit that there has been a thrust on renewables by the government particularly on domestic manufacturing of equipment in wake of the Covid-19 pandemic.

It has been identified as a priority area as part of Indian government’s ‘Atmanirbhar’ or self-reliance vision. But analysts warn that any protectionist move could make solar power costly and curb demand, and/ or create uncertainty for projects under construction.

Level field

Meanwhile leading solar manufacturers, including Webel Solar, Vikram Solar and Renewsys wrote to the Prime Minister seeking a level-playing field to all manufacturing units.

They pointed out that the Ministry of Finance’s proposed move to impose basic customs duty (BCD) on solar manufacturers located within the Special Economic Zones (SEZs) may pose a threat to the viability of the units, and thereby impacting the indigenous production of solar cells and modules.

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Published on June 11, 2020
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