The analyst said currently, India and Australia are the only Asia Pacific countries where renewable power already costs lower than new-build coal. It predicted the trend would spread to the entire region by the end of the decade, while India and Australia would see renewables becoming further cheaper than coal.
Indian solar sector remained buoyant even amid Covid pandemic as 15.3 GW of solar capacity (including solar-wind hybrid) was sanctioned in the current year’s first half itself. However, returns expectations from equity investments rose from around 14% in the first half of 2019 to 16-17%, indicating heightened risk perceptions among investors.
A new report by the Institute for Energy Economics and Financial Analysis (Ieefa) and JMK Research estimates India to have about 11.6 GW of operational wind-solar hybrid capacity by 2023.
The government is trying to harness renewables to increase domestic output but will need a more liberal energy market and to consider the structure of procurement auctions, cloying red tape and the financial travails of state utilities if it is to achieve its goals, says Rakshika Kaul of Amp Energy India.
As of June 30, the country installed 90.5 GW of renewable energy capacity from solar (utility-scale and rooftop), wind and biomass resources.
The Ministry of New and Renewable Energy has specified how procurement of back-up grid capacity will work for electricity distribution companies. The rules consider energy storage solely as part of the 51% clean energy requirement, and instead contemplate coal – with a variable price tariff element – as necessary for evening out supply.
The 15 MW wind-solar project—set up in captive mode—will meet close to 70% of Cargill’s Davangere facility’s electricity needs.
The global hybrid energy market, including energy storage, is projected to touch $40 billion by 2025. It is an opportunity that India has capitalized upon, earlier than others.
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