Renewable Energy
The Indian renewable energy sector was the second most attractive in the world in 2017.

Renewable Energy Industry in India

Latest update: June, 2018

  • India accounts for approximately 4 per cent of the total global electricity generation and contributes 4.43 per cent to the global renewable generation capacity.
  • 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 February 2018, total renewable1 power generation installed capacity in the country stood at 107.81 GW, which is 32.26 per cent of the total installed capacity of 334.15 GW.
  • A hydro power revival policy is underway which amongst others is likely to include the classification of all hydro power projects as renewable energy
Growth

Notes: RES – Renewable Energy Source; GW – Gigawatt; FY18*- Breakup up to December 2017, 1Large Hydro power projects not included in renewable energy targets of GOI
Source: CEA, International Renewable Energy Agency (IRENA)

  • Power generation from renewable energy sources in India reached 85.65 billion units in FY18 (up to January 2018).
  • The 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 (excluding large hydro projects) 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
  • Solar installation in India is expected to increase 360 per cent by 2020.
  • India witnessed highest ever solar power capacity addition of 5,525.98 MW and 467.11 MW of wind power capacity addition in 2017-181. 15,000 biogas plants were installed during the same time period.
  • About 4.96 million household size biogas plants have been installed in India since the inception of National Biogas and Manure Management Programme (NBMMP).
Growth

Notes: RES – Renewable Energy Source; GW - Gigawatt, CAGR - Compound Annual Growth Rate; FY18* - data up to February 2018, Large Hydro power projects not included in renewable energy targets of GOI
Source: CEA, makeinindia

Last Updated: June, 2018

Introduction

The Indian renewable energy sector is the second most attractive1 renewable energy market in the world. The country ranks fourth2 in the world in terms of total installed wind power capacity.

Installed renewable power generation capacity has increased steadily over the years, posting a CAGR of 9.29 per cent over FY08–18. India added record 11,788 MW of renewable energy capacity in 2017-18. 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. 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 (including large hydro projects) in India touched 114.43 GW as of May 2018, which is around 33 per cent of total energy capacity of the country.

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.3

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 December 2017 stood at US$ 6.26 billion. More than US$ 42 billion has been invested in India’s renewable energy sector since 2014.

Some major investments and developments in the Indian renewable energy sector are as follows:

  • With 28 deals, clean energy made up 27 per cent of US$ 4.4 billion merger and acquisition (M&A) deals which took place in India’s power sector in 2017.
  • In March 2018, ReNew Power finalised a deal estimated at US$ 1.55 billion to acquire Ostro Energy and make it the largest renewable energy company in India.
  • World’s largest solar park named ‘Shakti Sthala’ was launched in Karnataka in March 2018 with an investment of Rs 16,500 crore (US$ 2.55 billion).
  • Solar sector in India received investments of over US$ 10 billion in CY 2017.
  • 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**.

Government initiatives

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

  • A new Hydropower policy for 2018-28 has been drafted for the growth of hydro projects in the country.
  • 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.
  • 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 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.

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. As of June 2018, 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

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.* Use of renewables in place of coal will save India Rs 54,000 crore (US$ 8.43 billion) annually5.

Exchange Rate Used: INR 1 = US$ 0.015 as on March 04, 2018

Note: 1- According to Renewable Energy Country Attractiveness index by EY; 2- As per data from the Economic Survey; 3- As per the Confederation of Indian Industry's (CII) report titled 'State Renewable Energy Policies: A Comparative Study' ;*According to the Bloomberg New Energy Outlook 2017; ** Data from Venture Intelligence; 4 – as per Greentech Media; 5 – Greenpeace India

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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