Indian renewable energy sector is the fourth most attractive renewable energy market in the world1. India is ranked fourth in wind power, fifth in solar power and fifth in renewable power installed capacity as of 2018.
Installed renewable power generation capacity has gained pace over the past few years, posting a CAGR of 17.33% between FY16-20. 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. The government is aiming to achieve 225 GW of renewable energy capacity (including 114 GW of solar capacity addition and 67 GW of wind power capacity) by 2022, more than its 175 GW target as per the Paris Agreement. The government plans to establish renewable energy capacity of 500 GW by 2030.
As of October 31, 2020, the installed renewable energy capacity stood at 89.63 GW, of which solar and wind comprised 36.31 GW and 38.26 GW, respectively. Biomass and small hydro power constituted 10.14 GW and 4.74 GW, respectively. By December 2019, 15,100 megawatts (MW) of wind power projects were issued, of which, projects of 12,162.50 MW capacity has already been awarded2. Power generation from renewable energy sources in India reached 127.01 billion units (BU) in FY20.
In 2019, India installed 7.3 GW of solar power across the country, establishing its position as the third-largest solar market in the world.
With a potential capacity of 363 GW and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India.3
According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in the Indian non-conventional energy sector stood at US$ 9.56 billion between April 2000 and June 2020. More than US$ 42 billion has been invested in India’s renewable energy sector since 2014. New investment in clean energy in the country reached US$ 11.1 billion in 2018.
Some major investments and developments in the Indian renewable energy sector are as follows:
Some initiatives by Government of India to boost India’s renewable energy sector are as follows:
The Government 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 225 GW by 2022, of which about 114 GW is planned for solar, 67 GW for wind and other for hydro and bio among other. India’s renewable energy sector is expected to attract investment worth US$ 80 billion in the next four years. About 5,000 Compressed Biogas plants will be set up across India by 2023.
It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. * Use of renewables in place of coal will save India Rs. 54,000 crore (US$ 8.43 billion) annually3. Renewable energy will account for 55% of the total installed power capacity by 2030.
Note: 1- According to Renewable Energy Country Attractiveness index 2018 by EY;
2- As per data from the Economic Survey; *According to the Bloomberg New Energy Outlook 2018; 3 - Greenpeace India, Union Budget 2020 21, SPV - Solar Photovoltaic System, MWeq - Megawatt Equivalent
References: Central Electricity Authority, Ministry of New and Renewable Energy, Media Reports, Press Releases
Note: Conversion rate used in November 2020, Rs. 1 = US$ 0.01352
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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