India Ratings (Ind-Ra) expects India to add 25-28 GW of renewable energy capacity this fiscal 2024-25 with 18.8 GW already installed in the first nine months ended Dec. 2024. It said the capacity addition will largely be from solar projects.
Furthermore, Ind-Ra expects the share of renewable energy sources to reach 55%-60% of the total power generation capacity installed by FY 2030 and contribute 35%-40% to the total power generation mix.
However, land acquisition, connectivity and adequate evacuation/transmission infrastructure remain critical for capacity additions, said the analysts.
“Given the expected energy demand growth and energy transition plans, India needs to add 50 GW of renewable energy capacity per annum till 2030. With a strong pipeline of 174 GW as of September 2024 and healthy tendering activity, implementation remains key to achieve the set targets,” said Vinitha Arunachalam, analyst, Infrastructure, Ind-Ra.
All-India power generation capacity reached 457 GW as of Nov. 2024, with renewables contributing a share of 45% (205 GW). The share of renewable energy (including large hydro) in power generation is likely to remain stable at 21% in FY 2025 with the balance largely contributed by thermal. Renewable energy capacity addition is expected to gain further traction in view of a strong pipeline (largely solar) and contribute 35%-40% to the generation mix by 2030.
FDRE/peak/hybrid auctions gain traction
During 9M FY 2025, significant renewable project capacities totalling around 32 GW were auctioned with a large share under firm and dispatchable renewable energy (FDRE), peak and hybrid tenders.
Ind-Ra expects further traction in renewable energy + storage tenders in the coming years, considering the storage requirement of around 74 GW/411 GWh as per National Electricity Plan (2023-2032).
“Given the uncertainty and intermittency in renewable energy projects, the need for round the clock power and to maintain grid stability, renewable tenders with hybrid/storage/round-the-clock tenders are expected to garner further traction. Furthermore, the government’s impetus on the sector and favourable input prices are further expected to maintain a strong under construction pipeline.” said Bharath Kumar Reddy, Associate Director, Infrastructure, Ind-Ra.
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