ICRA maintains Stable outlook for renewable energy sector


ICRA has maintained a stable outlook for the renewable energy sector, led by strong policy support, healthy demand prospects, and superior tariff competitiveness. It stated the realization of past dues and regular payment of ongoing bills by discoms following the late payment surcharge (LPS) scheme also remain positives for the sector.

ICRA expects India to add 18-20 GW of RE capacity (from solar, wind and other RE sources) in FY 2024 and about 25 GW in FY 2025, compared to 15 GW in FY 2023. Much of this capacity addition will be from solar projects; new solar capacity addition in FY 2024 and FY 2025 is expected at around 17 GW and 20 GW, respectively.

“This, along with the growing project pipeline, is likely to support the scale-up in capacity addition to about 25 GW in FY2025, mainly driven by the solar power segment.”

However, Kadam said, challenges remain on the execution front concerning delays in land acquisition and transmission connectivity, which could hamper the capacity addition prospects.

Thermal power

ICRA projects the all-India thermal plant load factor (PLF) to continue to improve to 69.0% in FY 2025 from about 68% projected for FY 2024, led by the growth in electricity demand and limited thermal capacity addition.

ICRA’s outlook for the thermal power segment is Stable, supported by the healthy improvement in the thermal PLF, coupled with the reduction in dues from state distribution utilities (discoms) following the implementation of the LPS scheme since August 2022.

The rating agency projects the demand growth to moderate to 5.5-6.0% in FY 2025 from the 7.0-7.5% projected for FY 2024.

Coal has remained a dominant fuel source to meet India’s base load power demand, and its share in the overall energy generation mix is estimated to decline from 73% in FY 2023 to about 58-60% in FY2030, assuming 200 GW of renewable capacity addition between FY 2024 and FY 2030, as per ICRA estimates. Nonetheless, the share of coal in the generation mix is expected to remain significant till 2030.


This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.