The Indian power and renewables sector witnessed substantial growth, affirming India’s commitment to sustainable energy in FY2023-24. Recent data reveals significant milestones in renewable energy installations, showcasing the country’s continued progress towards a greener future.
According to recent figures, released by the Ministry of New and Renewable Energy (MNRE), the nation has seen an impressive addition of 1930 MW in wind power installations and 5531 MW in solar power installations in the FY2024 upto November 30, 2023. These installations contribute to a cumulative capacity of 44.56 GW in wind, 72.31 GW in solar, 4.9 GW in Small Hydro Power, and 9.4 GW in Biomass as of November 30, 2023.
The Hon’ble Minister Shri R.K. Singh has been at the forefront, steering the sector towards a transformative era. His proactive approach and visionary leadership have been pivotal in fostering a conducive environment for industry growth. Multiple high-level meetings with industry developers, swift resolution of concerns, and the issuance of relevant advisories and notifications have characterized Minister Singh’s tenure, affirming India’s ambition to become a global hub for renewables and green fuels.
A comprehensive vision outlined in the CEA Report on Optimal Generation Mix by 2030 targets 292 GW of solar, 100 GW of wind, and 18 GW of Hydro (Large+Small+PSP), presents ample opportunities for diverse investments in the sector. The collaborative efforts of various Ministries and agencies like MOP, MNRE, CEA, CTU, Grid-India, among others, are instrumental in striving towards these ambitious targets.
Key developments in specific sectors have notably fueled this progress:
Relief to Developers
· MNRE led by Secretary, have played a pivotal role in addressing the concerns of RE developers. His proactive approach includes regular interactions with industry developers and associations, swiftly addressing immediate and legacy issues. Various significant actions have been taken in the current year, demonstrating a commitment to resolving developer concerns promptly.
Wind Sector
· The discontinuation of competitive bidding for awarding wind projects injected renewed vigor into the sector. The renewed interest amongst project developers has led to the wind bids being oversubscribed and projects being allotted. New developers have also come-up to include wind energy capacity in their portfolios.
· Notifications for sea-bed licensing for offshore wind and offshore project development attracted interest from both domestic and global developers.
· Wind sector is also seen as a key requirement to meet the RTC requirements for power by the discoms and for production of green hydrogen and derivatives.
· Recently, the wind repowering policy has also been issued by the Ministry which provides for further utilisation of existing sites with high power rated turbines thus maximising the CUF.
Solar Sector
· Timely intervention by MOP and MNRE addressed critical issues in solar project development, connectivity, and payment concerns, reinvigorating the sector.
· Acc. to Mercom Research, in the first nine months (9M) of CY 2023, India added 2.2 GW of open access solar. As of September 2023, the country’s cumulative installed open access solar capacity was 11 GW. India had 12.5 GW of open access solar projects under various stages of development at the end of Q3 2023.
· Registrations under ALMM have been simplified and modules for higher efficiency (>19%) are only being registered, thus promoting higher efficiency modules to be installed in the country.
· Bidding Trajectory for solar and wind have been announced by the Ministry wherein bids for 50GW capacity will be announced with at least 10 GW wind will be announced every year beginning FY 2023-24 to FY 2027-28.
Pumped Storage Hydro
· Recognition of Pumped Storage Hydro’s significance led to the issuance of guidelines for project development, coupled with waivers from environmental clearance for these projects.
· The policy issuance is a welcome step, however certain suggestions will prove to be a propelling force for the development of these projects. A few of these suggestion include, alignment of States with the Centre’s policy on PSP, developers to be allotted sites based on self-identified mode. GST may be applicable @5% for such projects. States may be suggested to allow existing dams to be used a reservoirs. Further, as these projects have a higher gestation period, ISTS waiver may be extended for the entire project lifetime for the projects which get commissioned by 31.03.2030.
Captive Projects
· Ministry of Power, through amendments in Electricity Rules 2005, have provided reassurance to Captive projects. The amendments allow for the consumption by subsidiary and holding companies from the projects wherein the captive user is already drawing power, thereby facilitating captive consumption.
Carbon Sector
· The Central Government’s notification of the Carbon Credit Trading Scheme, 2023, and the initiation of stakeholder consultations mark a significant step towards a sustainable carbon market.
· On, similar lines, Hon’ble PM also launched the Green Credit program at COP28 which is a voluntary mechanism aimed at providing incentive for grass root level carbon mitigation and adaptation initiatives.
Solar Module Manufacturing
· Tranche II of the Performance Linked Incentive (PLI) for ~40 GW was awarded to 11 developers for ~Rs 14000 crores, reinforcing the government’s commitment to boost domestic solar module manufacturing capacity.
Green Hydrogen and its Derivatives
· The year 2023 started with a big bang announcement by the Government of India with the launch of the National Green Hydrogen Mission on January 04, 2023, with a mission target of 5 MMT by 2030, expandable to 10 MMT by 2030 in lieu of exports. This coveted announcement portrayed India as one of the shining countries of the Global South to transform as the net energy exporter.
· Cabinet Approval for outlay of Rs 19,744 crores for National Green Hydrogen Mission and announcement of SIGHT Guidelines for awarding incentives for the development of green hydrogen production and electrolyser manufacturing in the country. This was coupled by notification of Green Hydrogen Standard.
· Grant of ISTS waiver through project life for RE projects commissioned by 2030 and supplying green electricity for the production of green hydrogen and green ammonia.
· MNRE successfully hosted the 1st International Conference on Green Hydrogen (ICGH) in Vigyan Bhawan in July 2023 and Interactions with the EU, Korea, Japan, Singapore on sidelines of ICGH for offtake of green hydrogen and its derivatives.
· Tenders for award of PLI for green hydrogen production and electrolyser manufacturing has received an overwhelming response from bidders.
State Policies
States across India have proactively revamped policies to promote renewable energy and green fuels within their territories. Notable efforts include the inclusion of green hydrogen/green ammonia in Odisha’s Industrial Policy and RE Policy, emphasizing the decentralized approach to sustainable energy.
Rechristening of SPDA
Recognising the advancement in renewables and the march towards energy transition, SPDA (erstwhile Solar Power Developers Association) have rechristened its name to Sustainable Projects Developers Association to lead the representation of emerging decarbonisation solutions like green hydrogen and its derivatives, energy storage including pumped storage and batteries, carbon markets, solar manufacturing and electrolyser manufacturing, and is poised to deepen further its engagement with policy advocacy, discussions and consensus building on issues related to the Net-Zero transition.
SPDA’s new identity will reinforce its position as a marquee organisation in the green services space, forging co-operation with leading global associations and holding events abroad in its pursuit to promote India’s leadership in the global stride towards decarbonisation.
Shri Shekhar Dutt, Director General, SPDA recounts that “2023 has been a marquee year with significant achievements by the industry towards energy transition. I congratulate the Government of India, Shri R.K. Singh, Hon’ble Minister and his entire team at MOP and MNRE for their proactive approach and a vision for India. As regards, our path towards the future, we need to ensure the next generations to come live in a fossil free environment, therefore renewable energy capacity addition is quintessential while the efforts towards green fuel production must grow exponentially for domestic consumption and exports. Conclusion of offtake agreements for green hydrogen and its derivatives as well as capacity addition @50 GW/year for forthcoming years must be set as the minimum goal to be assailed for 2024.
In the long-term, efforts of the Government must be to increase the per capita power consumption and promote manufacturing of goods which are produced wherein power is one of the main inputs”.
Looking ahead to 2024, stakeholders have identified crucial suggestions for sustained growth and smoother operations in the sector:
1) Frequent shifting of the commissioning dates of sub-stations which results in developers to breach the June 30, 2025 deadline for seeking 100% waiver from payment of ISTS Charges. Projects having SCOD before June 2025, but shifted due to delay in commissioning of substation should be granted ISTS waiver.
2) ALMM should be extended beyond March 31, 2024 for projects, particularly open access projects wherein no Government support is provided and those related to green hydrogen/derivatives.
3) To achieve the goal of 292GW solar installations and 100 GW wind installations by 2030, large-scale tenders (up to 5 GW) should be issued by REIAs to maximize the execution capabilities of developers.
4) Reducing capital blockades by revisiting EMD and PBG requirements for large-scale tenders, ensuring the capital can be utilized for project development.
5) Mandating Green Hydrogen Consumption Obligations (GHCOs) for key industrial sectors to promote green hydrogen usage.
6) More number of Ports should be declared as Green Hydrogen Ports and port infrastructure should be developed along with the allocation of water.
7) Introducing single-stage bidding for solar projects to expedite project development.
8) Facilitating offtake agreements between the Indian government and key countries for green fuel supply. Agreements under Article 6 for trading of ITMOs would support discussions on offtake.
9) Enhance efforts to sensitize states to ensure timely payments to RE generators.
10) Any changes in law or introduction of new laws which seek additional charges/tax from infrastructure sector must be made with caution, India being a developing country cannot afford to make infrastructure development a costly affair.
As India progresses on its path towards a sustainable and renewable future, these suggestions stand pivotal in ensuring continued growth and achieving ambitious targets.
