India's renewable energy capacity to reach 170GW by March 2025
India is on track to boost its pure renewable energy capacity from 132 GW in October 2023 to approximately 170 GW by March 2025, according to research agency ICRA. This projection excludes large hydropower projects and focuses solely on pure renewable energy sources like solar, wind, and hybrid. As of October 31, 2023, India's total installed renewable capacity reached 178.98 GW, which includes nearly 47 GW of large hydropower capacities.
Rise in renewable energy share and tendering activity
ICRA predicts that the combined share of renewable energy (RE) and large hydropower in India's electricity generation will rise from 23% in FY23 to around 40% in FY30. The agency also notes a significant increase in tendering activity, with over 16 GW projects bid out and another 17 GW bids in progress by Central nodal agencies. This is in line with the Indian government's announcement of a 50 GW annual bidding trajectory in March 2023.
Solar power segment drives capacity addition
"The sharp decline in solar PV cell and module prices, abeyance of the Approved List of Models and Manufacturers (ALMM) order till March 2024, and the timeline extension approved for solar and hybrid projects is expected to lead to an improvement in RE capacity addition to 20 GW in FY2024 from 15 GW in FY2023," said Vikram V, Vice President, ICRA. The expanding project pipeline is also expected to support capacity addition growth up to 25 GW in FY25.
Challenges and opportunities in renewable energy projects
However, challenges remain in terms of execution, including delays in land acquisition and transmission connectivity that could hinder capacity addition prospects. On the bright side, the sharp decrease in solar PV cell and module prices has led to a significant improvement in debt coverage metrics for upcoming solar power projects. Moreover, the tariffs discovered in RE round-the-clock (RTC) tenders remain highly competitive against conventional sources.
