Halfway There! India's Renewable Energy Sector Poised to Achieve 500 GW Target

Even as India's renewable energy target of 500 GW looks a distant dream with around 300 GW required in next five years, industry experts claim the target is well within the country's reach as almost half of required capacity is under construction or tendering stage.India crossed the 200 GW renewable energy target in October this year with another 300 GW required at an annual capacity of 60 GW over the next five years. The required target underscores the need for renewed momentum and strategic efforts to meet the demand.The big question is how India would achieve this target given the maximum capacity added has never crossed 15 GW in a year. The task at hand seems more than what the industry can chew.But industry experts that NDTV Profit spoke to differed. With power demand growing at 6–7%, there will be ample opportunity for the industry to contribute to the demand and help achieve the target, they claimed.According to Rupesh Sankhe, vice president and power analyst at Elara Securities. there will be strong pick up from 2028 onwards once the power transmission capacities under construction come online. “There are already 80–85GW of capacities under construction and another 60GW under tendering, that makes up for 140 GW while the remainder under survey will also get tendered after the under-construction projects get commissioned,” Sankhe said. The installation that is at 15 GW will pick up to 25GW by calendar year 2027 and to 35–40 GW after 2028 once the under-construction projects get commissioned, Sankhe added.Fitch Ratings also believes a large part of incremental power demand in the Asia-Pacific region primarily in India and China, will be met by renewables as a pathway to achieve transition to net-zero, even as it believes the share of coal would remain significant. "We believe India and China will continue to drive power demand growth," Fitch said in a report. "We estimate India’s and China’s GDP growth will expand by 6.5% and 4.3%, respectively, leading to similar growth in power demand — higher than global growth in power demand."Furthermore, rising urbanisation and extreme climatic conditions such as extended heatwaves are also likely to add to demand growth, the rating agency said.Fitch expects countries to focus more on larger, more-complex hybrid and round-the-clock renewable projects. "Successful execution of these projects is subject to timely delivery of large equipment orders and availability of skilled labour, both of which may be stretched due to rising renewable demand," it said..Unlike renewable energy projects, which can be commissioned in under 24 months, transmission projects usually take between 36–60 months for completion. This disparity requires transmission projects to be planned and awarded well in advance of renewable projects."The existing evacuation infrastructure has limited headroom, with most large projects dependent on significant system upgrades. To facilitate grid integration, India must prioritise the installation of new substations and grid-scale energy storage," said Vinay Rustagi, senior director and head of renewables business at Crisil Ratings.The renewable energy sector faces another significant challenge in the form of rising cost of capital. Higher global interest rates coupled with lower-than-expected returns have made investors cautious, Rustagi said."Many global utilities, and oil and gas companies are either going slow on the sector or trying to exit altogether. As a result, project developers are finding it harder to secure financing," he said.Going ahead, India must integrate advanced technologies like battery energy storage systems (BESS) and pumped hydro installations. However, energy storage solutions are still in their infancy in India and require substantial investment to enhance affordability and scalability..The government's supportive policies, such as the solar production-linked incentive (Solar PLI), PM Muft Bijli Yojna, and PM KUSUM Scheme; declining technology costs; and increasing investor confidence are all converging to create a cycle of growth.If things fall into place, especially related to land acquisition for the transmission sector, India is likely to not only meet but potentially exceed its renewable energy targets, Sankhe said..India Doubles Renewable Energy Capacity In April-November, Says Pralhad Joshi

Halfway There! India's Renewable Energy Sector Poised to Achieve 500 GW Target

India's renewable energy sector is on track, with 140 GW already under construction or tendering and strategies in place to overcome infrastructure and financing challenges.

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