Renewable capacity target of 175 GW to be met by FY26: ICRA

The major reasons for the delay were cited as issues related to land acquisition and the high duration required to build the respective transmission infrastructure to extract power generated from solar and wind plants.

Analysts at ICRA said the government-set target of 175 giga-watts (GW) of installed renewable energy capacity would be achieved only in FY26, as against the target by December 2022.

The major reasons for the delay were cited as issues related to land acquisition and the high duration required to build the respective transmission infrastructure to extract power generated from solar and wind plants.

As 40 GW of the 175 GW target capacity was expected to come from rooftop solar plants, limited progress on that front has also failed to meet the timely 175 GW renewable target. “Passive resistance” from state-run electricity distribution companies (discoms) to install rooftop solar – fearing discoms will lose revenue from high-paying commercial and industrial consumers – as one of the major reasons for not having rooftop solar. is seen in. Fly according to plan.

On 12 August, the government announced that the country’s installed renewable energy capacity had crossed 100 GW. Another 50 GW is currently under installation and 27 GW is under tender. The country has also set a target of 450 GW of renewable energy by 2030. ICRA estimates that the incremental renewable energy capacity will be 65 GW between March 2021 and March 2025, including 51 GW from solar, 12 GW from wind and 2 GW from other green sources. .

The 65 GW capacity addition is expected to entail an investment of Rs 3.5 lakh crore and is seen to increase the share of renewable energy in the overall power generation base from the current level of 25% to 34%. Analysts say the pace of capacity addition could accelerate if there is a significant increase in the growth rate of power demand.

Girish Kumar Kadam, Senior Vice President said, “The major challenges impeding development are mainly associated with slow progress in signing of power purchase agreements and power sale agreements along with land and transmission infrastructure. ” Chairman of Icra Ratings. Discoms have developed cold feet on buying power from renewable energy projects at tariffs discovered under earlier auctions after discovering very low prices in subsequent bids.

Over 6,000 MW of renewable energy projects that were bid in auction before February 2020 are yet to find buyers as rates have hit a record low of Rs 1.99/unit in December 2020. With the rising prices of solar modules, which comprises about 60%. The total project expenditure for solar plants, charges in recent solar auctions has been around Rs 2.34 per unit.