India has achieved a significant milestone in its renewable energy (RE) journey, reaching an installed RE capacity of around 125 GW as of March 31, 2023, according to a report prepared by CareEdge (CARE Ratings Limited). This achievement is driven by robust growth in the solar sector, which leads with 67 GW of installed capacity, closely followed by wind energy at 43 GW. India’s transition to renewable energy has significantly improved its energy mix, with renewables accounting for 30% of the country’s total capacity, up from 15% at the end of FY16.
The Indian government has set ambitious targets to further accelerate the shift toward clean energy, aiming for 500 GW of non-fossil fuel-based capacity by 2030, including specific goals of 280 GW for solar and 140 GW for wind power. To achieve these targets, the government has committed to annually bidding out approximately 50 GW of RE capacity over the next five years, facilitated by central Renewable Energy Implementing Agencies (REIA) such as NTPC, SECI, NHPC, and SJVN.
Additionally, the commercial and industrial (C&I) sector is emerging as a key player in India’s RE landscape, with substantial capacity additions expected. Notably, the wind energy sector, which faced challenges in recent years, is being revitalized through new bidding trajectories and state-specific auctions.
One noteworthy development is the temporary relaxation of the Approved List of Module Manufacturers (ALMM) requirement. This move acknowledges the difficulties faced by developers in sourcing modules exclusively from ALMM suppliers. However, tariff-related barriers, including basic customs duties on cells and modules, continue to pose challenges.
To bolster domestic module manufacturing, the government has introduced a Production Linked Incentive (PLI) scheme, which is expected to stimulate substantial domestic module production, reducing dependence on imports.
To address the intermittent nature of renewable energy generation, the government is promoting both Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSP). Guidelines have been issued to encourage the development of PSPs, offering various incentives and waiving certain charges.
Lastly, the introduction of green energy open access rules is expected to facilitate the transition to renewable energy in the commercial and industrial sector, making it more appealing to both producers and consumers.
These policy initiatives, as outlined in the report by CareEdge (CARE Ratings Limited), are anticipated to drive India’s RE capacity to new heights, attracting investments and significantly contributing to the nation’s sustainable energy future.