August 2023

Over the past couple of years, renewable energy capacity has witnessed rapid growth. The renewable sector, as a whole, has evolved into a mature and market-driven ecosystem. As of July 2023, the country’s renewable energy capacity stands at 177 GW (including large hydro), accounting for over 40 per cent of the installed capacity.

The solar capacity, at 70 GW, has grown rapidly over the years and is headed towards achieving the target of 280 GW by 2030. Notably, the C&I solar segment is showing strong growth owing to the attractive commercial viability of these projects for both developers and consumers. Hybrids, round-the-clock power and storage are gaining traction as off-takers demand reliable power supply and stable grids.

Meanwhile, in the wind energy segment, the recent revision in the auction process to shift from reverse auctions to closed bidding and the announcement for allocation of 8 GW of bids each year for the next eight years are expected to drive growth in the sector. Moreover, the offshore wind energy space, although currently lacking operational projects in the country, exhibit potential. Studies estimate about 35 GW and 30 GW of offshore wind power potential off the coasts of Gujarat and Tamil Nadu, respectively.

Emerging as a key renewable energy source for decarbonising hard-to-abate sectors is green hydrogen. This emerging segment has witnessed a slew of policy interventions by the government. The National Green Hydrogen Mission was launched in early 2023, with an initial budget outlay of Rs 197,440 million and a target to scale up the country’s annual green hydrogen production capacities to at least 5 million metric tonnes per annum by 2030. Besides, the much-awaited financial incentives to support the domestic manufacturing of electrolysers have been announed.

While the renewable energy sector has delivered impressive growth so far, ensuring the sustained momentum requires secure and reliable supply chains for essential raw materials and critical minerals. Moreover, issues pertaining to contract sanctity, payment defaults from discoms and delays in tariff approvals, as well as land and grid constraints, need attention.

Power Line’s Infocus section on renewable energy explores the new and em­erging trends and recent developments in the segment, as well as the major issues, challenges and the future outlook.