The industry surged ahead in 2024, experiencing strong demand growth and receiving massive investments in both the power and renewables sectors. Non-fossil fuel-based capacity saw its share rise to 44 per cent, with solar accounting for around 58 per cent (till August 2024). The renewables sector, which is now at 200 GW, continued its growth trend, adding more capacity than conventional power. As a testament to its clean energy agenda, the government rolled out a slew of measures for the renewables sector.
To promote offshore wind and overcome its high initial costs, subsidy via the VGF route was offered for
offshore wind projects. The first offshore wind seabed lease tender was also announced recently. There was a renewed push for rooftop solar on the residential side. Additional funds were injected with the new PM Surya Ghar: Muft Bijli Yojana scheme, giving both reluctant consumers and discoms incentives. Further, moving away from traditional vanilla renewable energy procurement, more innovative formats were introduced in bids, including wind-solar hybrids, firm and despatchable
renewable energy (FDRE), and renewable-plus-storage, which accounted for a bigger share of the auctions. A record low tariff (Rs 4.98 per kWh) was achieved in SECI’s FDRE auction.
The post-election budget focused on the development of the carbon credit market, placing India among a select group of regions/countries, such as the EU, the UK and Australia, that have introduced similar schemes to reduce emissions. Nuclear power, especially the development of small nuclear reactors, also came up for the first time in the policy announcements. Meanwhile, pumped storage hydro received more policy attention and support measures. While renewables made progress, mature coal-based power generation remained an important part of the energy bouquet to address peak demand. The demand surge led to higher loads and increased trading volumes on the exchanges. Improvements in coal logistics, allowing imported coal blending, and improvements in plant maintenance and retirement schedules helped the segment achieve higher loads. A fresh wave of project development was also seen with new thermal contracts awarded in line with plans to add 80 GW of coal-based capacity by 2032.
The transmission grid added more capacity at higher voltage levels of 400 kV and above. As an industry, there was fantastic work done in modernising networks and commissioning a number of critical projects for the evacuation of green energy. These industry efforts, alongside the government’s
commitment to strategic planning through measures such as the operationalisation of GNA, removing licensing for bulk consumers and ISTS waivers, helped remove a number of barriers in grid connection. Improving discom health and accelerating smart metering remained key priorities. AT&C losses fell to 15.4 per cent in FY 2023, much closer to the 12-15 per cent target. With the initial implementation-related hurdles having been largely overcome, the pace of smart meter installation saw a massive increase.
Looking ahead, the next six years are expected to witness more renewable energy capacity addition than the conventional power generation installed during the first 60 years of independence. This will help us move towards the 500 GW goal of non-fossil fuel power capacity by 2031-32.
The CEA transmission plan projects the addition of 33 GW of HVDC capacity in the next 10 years, which is the same as the capacity added to date. Another area that will form a bigger part of the renewable energy conversation is the rise of data centre establishments, which will present a sizable
opportunity for C&I contracts to meet the demand through renewables at a lower cost. Yet, some lingering issues remain, such as those related to land acquisition and offtake agreements, where states play a key role. The solar industry’s supply chain is facing intense strain. Gas-fired power capacity is still lying idle. Further, the sector remains exposed to climate change vulnerabilities as seen with the extreme heatwave followed by flooding that impacted power demand last month.
Navigating these hurdles will be tricky and will take time. Having said that, the sector has successfully
demonstrated that India can deliver green energy at scale, at competitive costs. As the industry prepares for the big green transition leap in the next few years, we, at Power Line, will be eagerly awaiting and reporting these developments.
P.S.: We take this opportunity to rededicate ourselves to the mission of the magazine – to be the most
trustworthy source of information and analysis for the Indian power sector. We would also like to
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