The Indian government recently announced the latest bidding timeline for renewable energy projects, proposing to start bidding for at least 50 GW of renewable energy power generation projects annually between the fiscal years 2024 and 2028, with the majority expected to be solar power generation projects, and at least 10 GW for wind.
The country aims to achieve carbon neutrality by 2070, and would significantly increase the proportion of non fossil fuel power generation supply. However, in the past few years, the growth rate of renewable energy power generation was far less than the target. The energy industry has expressed concerns about the latest proposed timeline for the growth of renewable energy generation installations.
According to the latest news from the Ministry of New and Renewable Energy (MNRE), to reduce carbon dioxide emissions by 45% from 2005 by 2030, India plans to add 250 GW of renewables bidding capacity before March 2028, so to increase non fossil fuel power generation capacity to 500 GW by the end of 2030.
According to the government memorandum, India will start bidding for at least 15 GW of renewables in the second quarter this year, followed by bidding for 10 GW and 15 GW of renewable energy power generation projects, a significant increase from previous years.
“The structured bidding route will provide renewable energy developers with sufficient time to do financial plans, develop business plans, and manage the supply chain more effectively,” said Raj Kumar Singh, Minister of MNRE.
In 2021, Indian Prime Minister Narendra Damodardas Modi, when attending the United Nations Climate Change conference, proposed to achieving zero net emissions by 2070, and 50% of electricity from renewable energy by 2030, a significant increase on the basis of 38% by 2020.
Meanwhile, India will significantly reduce the carbon emission intensity per unit of gross domestic product (GDP), and reduce total carbon emissions by one billion tons by 2030. The main means to achieve the above goals is to reduce excessive dependence on high carbon emitting coal-fired power and vigorously develop renewable energy.
Although with clear goals and paths, based on India’s renewable energy installation situation in the past few years, its actions are far from sufficient to meet the established goals. The goal of installing 40 GW of renewables annually in a decade proposed in 2018 by MNRE didn’t pan out as planned, due to factors such as the COVID-19.
In 2022, India once again set a goal of completing the cumulative installation of 175 GW of renewables by the end of the year. However, by the end of February this year, official data from India showed the number was only 122 GW, of which about half was solar power, wind accounting for less than one-third. The total installed capacity of non fossil fuel power generation, including nuclear power and hydropower, was approximately 169 GW.
About 40 GW of non fossil fuel power generation projects are in the bidding stage, and other over 10 GW are still under construction. Overall, the installed capacity of non fossil fuel power generation is far from the set target.
In contrast, in 2022, coal-fired power generation still accounted for over 70% of India’s electricity supply, and its dependence on coal continued to increase. Installed capacity of coal-fired power generation in India exceeds 200 GW, accounting for 72.8% of the electricity supply in 2022, and still showing an upward trend compared to 72.3% in 2019.
The IEA has predicted that India will be one of the fastest growing countries in global energy demand during 2023-2030. Faced with the sluggish growth of the renewable energy market, Indian business people have clearly pointed out that local companies are unable to support the huge demand for clean energy growth.
The Financial Times quoted Sumant Sinha, the CEO of Indian power company ReNew, saying that although the company are open to proposal from the MNRE to accelerate the growth of renewable energy installations, in reality, renewable energy companies are struggling to keep up with current work.
Renewable energy companies need to raise huge funds, purchase a large amount of equipment, and also recruit more personnel to advance projects on the ground. These tasks are not easy. More and more project bidding will bring great pressure to the company, added Sinha.
Indian power giant Adani has also been in a financing crisis recently, and the company’s operational difficulties have also cast a shadow over the Indian energy market. As one of the main power generation groups in India, Adani has stated that by 2025, the company’s installed capacity for renewable energy power generation will be increased to 25 GW.
However, in February this year, due to the influence of short selling institutions in the United States, the total stock market value of Adani Group’s companies fell below USD 100 billion. This year, the company’s market value has also been halved.
From a purely renewable energy project development perspective, Adani is one of the largest players in the Indian market and has large-scale plans for renewable energy. If Adani’s expansion plan is hindered, it will ultimately have an impact on the overall growth rate of renewable energy installations in India, said Sinha.
