Published on February 16th, 2019 | by Saurabh0
India Will Miss 100 Gigawatt Solar Target For 2022, Says Report
February 16th, 2019 by Saurabh
Research and consultancy firm Wood Mackenzie has projected that India will miss out on its target to have 100 gigawatts of solar power capacity operational by March 2022.
According to a report issued by Wood Mackenzie, the current regulatory framework in India is not supportive of the short-term capacity target envisaged by the government. The firm notes that despite the sharp fall in the cost of project implementation and falling tariff bids, the outlook remains uncertain due to some government policies.
Mackenzie pointed to the imposition of import duties on solar cells and modules from China and a few other Asian countries, and taxes imposed under the Goods and Services Tax regime, as inhibiting factors for the achievement of the 100 gigawatt target.
These policy changes have led to the cancellation or delay of several large-scale tenders. Several states and even the central agencies have opted to annul auctions when the tariff bids have been comparatively higher. Project developers have lost several gigawatts of projects following the cancellation of auctions due to higher tariff bids.
According to media reports published about the Wood Mackenzie report, the research firm seems to have taken a rather harsh view of the initiatives taken by the Indian government so far, the project development, and future prospects.
The Ministry of New and Renewable Energy reported that at the end of October 2018, a total of 24 gigawatts of solar power capacity was operational in the country. Additionally, 13.8 gigawatts capacity was at various stages of development, while another 22.8 gigawatts of capacity had been tendered. This takes the total solar power capacity installed or in the pipeline to almost 61 gigawatts.
To achieve the 100 gigawatt target by March 2022, the Indian government had planned to wrap up all auctions by Mach 2020. Thus, the government has around one year to auction 40 gigawatts.
The central government has recognized that large tenders represent a greater risk of failure and has thus turned to comparatively smaller but a greater number of tenders to ensure competition and greater participation from project developers.
Additionally, several states have announced aggressive solar power policies which would likely result in more tenders in the coming months as they look to fulfill their renewable purchase obligations.
It would not be a surprise if India indeed misses the 100 gigawatt target, however, the margin of shortfall may very well be much smaller.