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Renewable Energy Industry

Renewable Energy Industry

RENEWABLE ENERGY INDUSTRY IN INDIA

  • India accounts for approximately 4% of the total global electricity generation and contributes 4.43  per cent to the global renewable generation capacity amounting to 2,011 GW in 2016.
  • The International Energy Agency’s World Energy Outlook projects a growth of renewable energy supply to 4,550 GW in 2040 on a global basis.
  • As of July 2017, total renewable power generation installed capacity in the country stood at 103.92 GW, which is 31.2 per cent of the total installed capacity.
  • Hydro power forms the largest source of energy constituting over 43 per cent of the total renewable power generation installed capacity.

A hydro power revival policy is in underway which amongst others is likely to include the classification of all hydro power projects as renewable energy.

NOTE: GW – Gigawatt
SOURCE: CEA, International Renewable Energy Agency (IRENA)

INTRODUCTION

The Indian renewable energy sector is the second most attractive renewable energy market in the world.1 The country ranks fourth in the world in terms of total installed wind power capacity.2 India added 11.788 GW of power generation capacity from renewable sources between January – November 2017. The focus of Government of India has shifted to clean energy after it ratified the Paris Agreement. With the increased support of government and improved economics, the sector has become attractive from investors perspective and India ranked second in Renewable Energy Attractive Index 2017. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role.

MARKET SIZE

Total installed renewable energy capacity in India touched 62.846 GW as of December 2017, which is around 18.8 per cent of total energy capacity of the country (333.5 GW).
During December 2017, total installed wind power capacity in the renewables mix Capacity from RES is 62.85 GW as of December 2017 stood at 32.85 GW (52.27 per cent), while solar power capacity was 17.05 GW (27.13 per cent). Total solar capacity in India is expected to be 8 per cent of global solar capacity by 2035.
With a potential capacity of 363 gigawatts (GW) and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India. As per the Confederation of Indian Industry’s (CII) report titled ‘State Renewable Energy Policies: A Comparative Study

INVESTMENTS/ DEVELOPMENTS
According to data released by the Department of Industrial Policy and Promotion (DIPP), FDI inflows in the Indian non-conventional energy sector between April 2000 and September 2017 stood at US$ 6.01 billion.
The Central Electricity Authority (CEA) expects investment in India’s power transmission sector to reach Rs 2.6 trillion (US$ 40.3 billion) during the 13th plan (2017-22), and to enhance the transmission capacity of the inter-regional links by 45,700 megawatt (MW).
Some major investments and developments in the Indian renewable energy sector are as follows:

  • Private Equity (PE) investments in India’s wind and solar power have increased by 47 per cent in 2017 (January 1 to September 25) to US$ 920 million, across nine deals, as compared to US$ 630 million coming from 10 deals during the corresponding period in 2016 Data from Venture Intelligence.
  • Adani Group from India was ranked as the 12th largest utility solar power developer in the world4 in January 2018.
  • NLC India Ltd commissioned its 130 MW solar power project in Tamil Nadu in January 2018.
    In December 2017, IL&FS Financial Services Ltd partnered with Jammu and Kashmir (J&K) Bank Ltd to finance nine hydropower projects in J&K with a total capacity of 2,000 MW, which require financing of around Rs 20,000 crore (US$ 3.12 billion).
  • The Asian Development Bank (ADB) and the Punjab National Bank (PNB) have signed a financing loan worth US$ 100 million, which will be used to support solar rooftop projects on commercial and industrial buildings across India.
  • The Government of India and the Asian Development Bank (ADB) have signed a loan agreement for US$ 175 million to be provided to Power Grid Corporation of India Limited (PGCIL) for construction of interstate transmission systems for solar power projects which will enable the transfer of surplus solar energy to power-deficit states.

GOVERNMENT INITIATIVES

Some initiatives by the Government of India to boost the Indian renewable energy sector are as follows:

  • In December 2017, a new policy was released for testing, standardisation and certification of products used in the renewable energy sector to address quality issues and develop standards as per international practices.
  • Around 4.96 million household size biogas plants were installed in the country under the National Biogas and Manure Management Programme (NBMMP) by 2016-17 end.
    The Maharashtra State Government plans to set up a 500 MW capacity solar park in its Dhule district with private bids planned in FY18 and has already selected 1,000 acres of land for the first phase of the project.
  • The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.
  • The Ministry of New and Renewable Energy (MNRE) has decided to provide custom and excise duty benefits to the solar rooftop sector, which in turn will lower the cost of setting up as well as generate power, thus boosting growth.
  • The Indian Railways is taking increased efforts through sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33 per cent by 2030.
  • The Union Cabinet has approved raising of bonds worth Rs 2,360 crore (US$ 366.2 million) by the Indian Renewable Energy Development Agency (IREDA), which will be used in various renewable energy projects in FY 2017-18.
  • The Union Cabinet has approved construction of 10 units of indigenous Pressurized Heavy Water Reactors (PHWR), with a nuclear capacity of 700 MW each, which is expected to bring substantial economies of scale and maximise cost and time efficiencies, and thereby boost India’s nuclear industry.
  • Prime Minister of India, Mr Narendra Modi, has proposed building model cities where power demand is met only by solar energy and further stated that bio-ethanol refinery projects should be accelerated to control India’s dependency on fossil fuels.
  • Mr Ashvini Kumar, Managing Director, Solar Energy Corporation of India (SECI), outlined Government of India’s plan to tender 750 MW of solar capacity, along with offering deals covering four GW of wind capacity during FY 2017-18.

ROAD AHEAD

The Government of India is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 175 GW by 2022 of which about 100 GW is planned for solar, 60 for wind and other for hydro, bio among other. India will need investments of around US$ 125 billion to reach this target.
It is expected that by the year 2040, around 49 per cent of the total electricity will be generated by the renewable energy, as more efficient batteries will be used to store electricity which will further cut the solar energy cost by 66 per cent as compared to the current cost (Capacity from RES is 62.85 GW as of December 2017) Use of renewables in place of coal will save India Rs 54,000 crore (US$ 8.43 billion) annually as per Greenpeace India.

EXCHANGE RATE USED: INR 1 = US$ 0.015 as on January 04, 2018.

REFERENCES: Media Reports, Press Information Bureau (PIB).

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