India is the world’s third largest producer and third largest consumer of electricity, after china and US; The tremendous demand of electricity is supported by the robust growth of Indian Economy. As the Indian economy grows the electricity consumption is projected to reach 15280 TWh in 2040.

It resulted in increasing investments in the sector by both foreign and domestic investors. Government’s ambitious green energy targets makes the sector quite attractive. It’s expected to attract $bn 80 billion investments in next 4 years.

The Govt, policy also supporting the increasing investments with its ramped up renewable energy capacity target to 225 GW by 2022.

Market Size: 

As of July 2018, total renewable power generation installed capacity (grid interactive) in the country stood at 116.82 GW, which is 33.81 per cent of the total installed capacity of 345.49 GW.

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

Investments: 

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 June 2018 stood at US$ 6.84 billion. More than US$ 42 billion has been invested in India’s renewable energy sector since 2014.

Developments: 

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

  • Inter-state distribution of wind power was started in August 2018.
  • In the first half of 2018, investments in clean energy increased 22 per cent year-on-year.
  • In the first half of 2018, India installed 1 MW of solar capacity every hour.
  • 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

Governments Initiative: 

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-super critical 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.

 

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) annually.