This however will happen provided government addresses a few concerns on the policy report. Bhaswati Guha Majumder of CXO News and APAC News Network dissects the insights from the October IEA Report on India’s renewable energy landscape.
India’s renewable energy sector is poised for significant transformation, as highlighted in the October report from the International Energy Agency (IEA). The report underscores India’s ambitious growth plans and strategic policy frameworks that are driving investments across various renewable technologies, including pumped storage, hydropower, bioenergy, and solar energy.
However, the report also suggested that India’s renewable capacity growth could be 24% higher in the accelerated case if the government addresses:
- Land procurement barriers and lengthy grid connection wait times, which limit the expansion of utility-scale projects.
- The weak financial health of distribution companies (despite recent improvements), which slows the pace of distributed solar PV growth.
- Relatively slow solar PV manufacturing expansion and restrictive trade measures, which limit the availability of affordable top-tier PV modules.
Pumped Storage and Hydropower Growth
According to the report, policies are the primary drivers behind more than half of India’s pumped storage deployments, predominantly led by state-owned utilities. In addition to these utilities, unsolicited bilateral contracts from nations such as India, Vietnam, and Indonesia contribute to the growth of this sector.
Sanjiv Kumar Katiyar, MD, Chhattisgarh State Power Generation Company Limited (CSPGCL), advocates a balance between traditional and renewable power. He accordingly highlights the current state of the power sector in Chhattisgarh as well as CSPGCL’s key operational and financial highlights, upcoming projects, future plans and targets, and top priorities going forward.
For conventional hydropower, market dynamics are expected to account for over half of the growth, with unsolicited bilateral contracts in India, Pakistan, and Indonesia being crucial contributors. State-owned investments also play a significant role, particularly in India, Ethiopia, and Canada, while feed-in tariffs in Turkey serve as another important growth driver.
Market Dynamics
In the realm of bioenergy, the report indicates that market forces drive over half of the deployment, mainly through corporate Power Purchase Agreements (PPAs) in Brazil, unsolicited bilateral contracts in India and Indonesia, and merchant projects in the UK and Spain.
“Most market-driven growth in the Asia Pacific region comes from corporate PPAs for solar PV and onshore wind projects in India and Australia, while unsolicited contracts for hydropower projects in India and for solar PV and onshore wind projects in Pakistan play also an important role,” the report stated.
Abhay Harne, Director (Projects), MSPGCL highlights the green initiatives under MAHAGENCO. “Mahagenco has formed ‘Mahagenco Renewable Energy Ltd’, a subsidiary company with the objective of building a ‘Green Maharashtra’ using non-conventional green energy and providing maximum and cheapest electricity to the people of Maharashtra,” he informed.
In the first half of 2024, global renewable energy capacity saw an unprecedented surge, with 82 gigawatts (GW) awarded in competitive auctions. Notably, over half of this capacity was concentrated in India and Germany, marking more than double the average volumes awarded in previous years and nearly matching the record capacity awarded in 2023.
Competitive Auctions and Non-Price Criteria
India’s renewable energy sector has emerged as a global leader in competitive auctions. In the first half of 2024, India, along with Europe emerged as the primary region for renewable energy tenders, with both awarding similar volumes. India awarded more capacity — 33 GW — in the first half of 2024 than in the last two years combined.
The report noted, “This increase in auction volumes reflects the government’s implementation of a clear national auction schedule to achieve the country’s renewable energy target, and modification of the design to increase subscription rates.”
“The technology trends in Indian and European auction results varied significantly. Globally, in the first half of 2024 almost 60% of the utility-scale solar PV capacity awarded in competitive auctions was concentrated in India, while nearly 85% of the awarded onshore wind capacity was in Europe,” it added.
Supply Chain and Module Manufacturing
The report emphasizes that over 90% of the supply chain expansion boom occurring in 2023-2024 is concentrated in China, which is projected to maintain a market share of 80-90% by 2030.
In India, initiatives such as the Production Linked Incentive (PLI) scheme, the Approved List of Module Manufacturers, and increased import duties on modules and cells are encouraging significant supply chain investments. By 2024, India’s module assembly capacity is expected to more than double to reach 50 GW, laying the groundwork for further growth as PLI-supported projects come online.
Projections and Strategic Developments
The IEA report forecasts that renewable energy participation in the Asia-Pacific region’s power mix will rise by 11 percentage points to 33% by 2030, with solar PV accounting for more than 70% of this growth. India will play a critical role in this expansion, significantly influencing the region’s renewable energy dynamics.
The report also anticipates a burgeoning electrolyser expansion in India, projected to reach 5 GW by 2030, driven by national tenders for hydrogen production and state-level incentives. The government’s first tender for renewable hydrogen production was oversubscribed by 30%, indicating strong market interest. However, concerns over the adequacy of support levels to reach financial investment decisions remain a forecast uncertainty.
Dr Dhananjay Swalkar, Director (Fuel), MSPGCL focuses on collaboration with Circular Economy Alliance Australia (CEAA): “Maharashtra Australia Sustainable Energy Alliance (MHAUSEA) was formed to establish platform to forge strong technology & knowledge partnership between Maharashtra and Australia to focus on, implementation of various RE projects, Green Hydrogen/Ammonia, Innovations in fly ash utilization and Carbon Capture Projects.”
Biogas and Biofuels Development
India’s biogas production is currently focused on household facilities in rural areas, with a shift toward larger, more efficient plants as part of its decarbonisation efforts. The government is working to transition its energy sector from coal to gas, with a target of increasing the gas share to 15% by 2030, up from 6.7% in 2023. The government plans to finance essential gas grid infrastructure expansions through the One Nation One Gas Grid initiative. As part of this shift to a gas-based economy, compressed biogas (CBG) containing 90% methane is expected to play a crucial role in enhancing energy security by substituting LNG imports and contributing to reductions in CO2 and methane emissions.
India’s biofuel demand is projected to rise significantly, with the government targeting 20% ethanol blending by 2025/26. As per the report, the main-case scenario anticipates an average ethanol blending rate of 14% by 2030, while an accelerated case could achieve the 20% target sooner. The introduction of biogas blending mandates for transport and domestic gas use starting in 2025/26 is expected to further stimulate the sector.
Main policies and regulations in India’s biogas/biomethane sector includes Sustainable Alternative Towards Affordable Transportation (SATAT) programme, Waste to Energy Programme, National Biogas Programme (NBP), Galvanising Organic BioAgro Resources (GOBARdhan) programme and Blending mandate obligation.
The October IEA report paints a promising picture for India’s renewable energy landscape, marked by ambitious growth targets and strategic policy initiatives. As the country navigates its energy transition, the interplay between market dynamics, governmental support, and technological advancements will play a pivotal role in shaping a sustainable energy future.
