India Boosts Renewable Capacity by 18.5 GW in FY 2024, with Solar Contributing 15 GW

India has significantly advanced its renewable energy capabilities, as reported in the latest CEEW Centre for Energy Finance (CEEW-CEF) Market Handbook. In the financial year 2023-2024, renewable sources contributed a remarkable 71% to the approximately 26 gigawatts (GW) of new power generation capacity added in the country. This increase brings India’s total installed energy capacity to 442 GW, with renewables now making up about 144 GW or 33%, and hydroelectric power contributing roughly 47 GW or 11%. For the first time, the share of coal and lignite has dropped below 50%.

Solar energy, both grid-scale and rooftop, was the primary driver of this growth, accounting for about 15 GW or 81% of the renewable capacity added. Wind energy also saw a significant boost, nearly doubling to 3.3 GW from 2.3 GW in the previous year. Additionally, for the first time since 2017, India added nuclear power capacity, totaling 1.4 GW.

The report highlights a record level of renewable energy auctions, with approximately 41 GW of capacity auctioned in the fiscal year, closely aligning with India’s ambitious renewable energy targets. The auctions included innovative approaches like wind-solar hybrids, firm and dispatchable renewable energy, and combined renewable energy and storage solutions, which constituted 37% of the total capacity auctioned.

Gagan Sidhu, Director at CEEW-CEF, emphasized the innovative shift in renewable energy procurement and the significant decrease in battery energy storage system (BESS) tariffs, which dropped by about 59% compared to August 2022. He also pointed out the financing challenge, suggesting that unlocking the domestic bond market for corporate green bond issuances could significantly enhance funding capabilities.

According to the handbook, India’s peak power demand met reached a new record of 240 GW during the fiscal year, driven by economic growth and climatic factors including lower-than-expected rainfall and temperature fluctuations. Riddhi Mukherjee, Research Analyst at CEEW-CEF, noted the policy amendments to enhance power supply liquidity and the introduction of initiatives like PM Surya Ghar: Muft Bijli Yojana to boost rooftop solar installations in residential areas.

The report also mentioned that foreign direct investment (FDI) flows into non-conventional energy surpassed USD 2 billion for the second consecutive year, and the Reserve Bank of India successfully auctioned four sovereign green bonds totaling INR 20,000 crore to support eligible green projects.