Renewable Energy Sector
India would have to add at least 25GW of renewable energy capacity per annum for eight years continuously to achieve the 500 GW target by 2030.
R K Singh, the Union Minister for Power, told PTI that in 2023, investments in the renewable energy sector could total around USD 25 billion.
Singh further explained, “We have to achieve a 500 GW target (of clean energy by 2030). Currently, we have a capacity of 173 GW (including large hydro and nuclear power). Capacity under construction is around 80 GW. It takes it to 250 GW. So we have to do another 200 GW by 2030.”
He went on to say that India needs to add 25 GW of renewable energy capacity annually for the next eight years, which would cost an investment of ₹1,25,000 crore, or USD 15 to 16 billion, taking into account the requirement of ₹5 crore per MW of capacity addition.
Singh further added, “We are also doing (solar) manufacturing, which will also attract investment. Currently, a capacity worth ₹8,780 crore is under construction. It includes polysilicon and module. We are bringing the PLI (Production Linked Incentive) scheme worth ₹19,500 crore, under which around 40GW capacity will be developed. We are also doing offshore wind of 4GW, which will also fetch billions of dollars.”
Green hydrogen and Green ammonia
With its National Mission on Green Hydrogen, the government has also made green hydrogen a priority. Next year, bids are anticipated for the production of electrolysers. Additionally, that would attract investment to the clean energy market.
Green ammonia and green hydrogen production should be included in the definition of an infrastructure sector, according to the Solar Power Developer Association (SPDA), and investments in these sectors can also be made via the FVCI (Foreign Venture Capital Investor) route. This will increase foreign investors’ flexibility and draw in investment.
Solar PV modules
The government allocated an additional ₹19,500 crore in 2022 for the production-linked incentive (PLI) programme known as the “National Programme on High-Efficiency Solar PV Modules.” The bids were already issued this year, and the allocation would take place in 2023.
To support and promote the production of high-efficiency solar photovoltaic (PV) modules, the government launched the PLI in 2021 with an investment of ₹4,500 crore. These include the vertical components that are above them, such as polysilicon, wafers, cells, and ingots. In the solar PV industry, the initiative is anticipated to lessen reliance on imports.
Gyanesh Chaudhary, Vice Chairman and Managing Director, Vikram Solar told PTI, “Investment in India’s renewable energy sector grew more than 125 per cent YoY (Year on Year) to touch a record USD 14.5 billion in FY22. India has already crossed 11 GW capacity installation in the first 9 months of the year (2022-23).”
He listed some of the challenges including continued solar import (80-90 per cent still imported, worth USD 3.2 billion in FY22) and expensive raw materials (50 per cent price rise in domestic panels).
He stated that the hike in shipping costs adds to module and overall project cost. Besides, Indian rupee falling against USD will lead to exchange rate variations between bidding and finalisation of projects, he added.
He also mentioned the lack of accessible, flexible financing options, tax exemptions, and subsidies for R&D in renewable energy.
He went on to say, “Although the challenges are there, the growth story presents a compelling argument for domestic manufacturers like Vikram Solar to focus on innovation and capacity expansion.”
The government is also concentrating on taking advantage of the opportunity to establish significant hydropower projects in the nation. Like small hydro, which has a capacity of up to 25MW, large hydro has already been granted renewable energy status.
ISTS (Inter-State Transmission System) or wheeling fees on the transmission of electricity produced by new hydro power projects were waived earlier this month by the government for a period of 18 years beginning with the date of commissioning.
In March 2019, the Indian government declared hydro power projects to be a renewable source of energy in recognition of the inherent benefits of hydro power. Hydropower projects, however, had not received the same waiver of interstate transmission fees offered to solar and wind energy projects.
The government has now decided to extend the waiver of ISTS charges on the transmission of power from new hydropower projects, for which construction work is awarded and PPA (power purchase agreement) is signed on or before June 30, 2025, in order to eliminate this discrepancy and to provide a level playing field for hydro projects.
Investment in clean energy
In order to achieve its goal of 500 GW of clean energy by 2030, the government has also budgeted an additional investment of more than USD 30 billion, or ₹2.44 lakh crore.
A high-level committee worked with states and other stakeholders to create the detailed plan, “Transmission System for Integration of over 500 GW RE Capacity by 2030.”
By laying out a comprehensive plan for the necessary transmission system to support 537 GW of renewable energy capacity by 2030, the plan represents a significant step towards realising the objective of integrating 500 GW of non-fossil fuel-based capacity by 2030.
500 GW of non-fossil fuel will require additional transmission systems, which are expected to cost around ₹2.44 lakh crore. These systems will include 8,120 ckm (circuit kilometres) of high voltage direct current transmission corridors (800 kV and 350 kV), 25,960 ckm of 765 kV ac lines, 15,758 ckm of 400 kV lines, and 1,052 ckm of 220 kV cable.
Girish Tanti, Executive Vice Chairman, Suzlon Group. said, “The year 2022 has been a remarkable year for renewables and energy transition in India. While renewable energy crosses over 165 GW of installations, the cumulative SECI bids reached over 42 GW. With our vision to commission 500 GW of renewable energy by 2030 and net zero by 2070 at COP26, this will require a significant step up of our on-ground efforts.”
He went on to say that he thinks 2023 will be one of the most significant turning points in “accelerating our energy transition journey.”
He believed that the key to ensuring that all renewable energy sources have equal opportunities to participate in India’s energy transition would be to harmonise all renewable energy policies, thereby equating the benefits and support provided to various renewable sources.