Indian Renewable Energy Industry Analysis

The Indian renewable energy is ranked fourth in wind power, fifth in solar power and fifth in renewable power installed capacity as of 2018. India ranked third in EY Renewable Energy Country Attractive Index 2019. Installed renewable power generation capacity has increased at a fast pace over the past few years, posting a CAGR of 19.78 per cent between FY14–18. Power generation from renewable energy sources in India reached 101.84 billion units in FY18 and 126.76 billion units in FY19. The renewable energy will account 55 per cent of the total installed power capacity by 2030.
As on November 30, 2019, the installed renewable energy capacity is 84.4 GW, of which solar and wind comprises 32.52 GW and 37.27 GW respectively. Biomass and small hydro power constitute 9.80 GW and 4.64 GW, respectively. Overall, India added 8.62 GW of grid interactive renewable energy capacity in FY19. The renewable energy sector’s capacity during the first quarter of fiscal year 2019-20 is higher at 2,151 MW.
The Ministry of New and Renewable Energy, Government of India, has formulated an action plan to achieve a total capacity of 60 GW from hydro power and 175 GW from other RES by March, 2022, which includes 100 GW of Solar power, 60 GW from wind power, 10 GW from biomass power and 5 GW from small hydro power. Government plans to establish renewable energy capacity of 500 GW by 2030. This has been proving to be the major thrust for the sector in India as the market players have enough incentives to move to clean source. Government of India is aiming to achieve 225 GW of renewable energy capacity by 2022, much ahead of its target of 175 GW as per the Paris Agreement. Under Union Budget 2019-20, Rs 4,272.16 crore (US$ 611.26 million) has been allocated for grid-interactive renewable energy schemes and projects. The Government of India allocated Rs 3,004.90 crore (US$ 416.48 million) in the budget 2019-20 for development of solar power projects including both grid-interactive and off-grid and decentralised categories.
During January-March 2019, solar sector received an investment of US$ 2.8 billion.
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. By 2030, renewable sources are expected to help meet 40 per cent of India’s power needs. New investments in clean energy in the country reached US$ 11 billion in 2017. In the first half of 2018, investments in clean energy in India reached US$ 7.4 billion.
As of 2019, India is building a solar power plant in Rajasthan, which will be world’s largest, with a capacity of 2,255 MW. The international equity investment in the India’s clean energy sector was US$ 283 million in 2016, US$ 532 million in 2017 and US$ 1.02 billion in 2018. India plans to add 30 GW of renewable energy capacity along a desert on its western border such as Gujarat and Rajasthan.
The renewable energy space in India has become very attractive from investors’ perspective and has received FDI inflow of US$ 8.69 billion between April 2000 and September 2019.