After three years of first floating the idea to classify large hydro power projects as renewable energy power plants, the Indian government has finally approved the measure. The announcement will result in India’s installed renewable energy capacity crossing the milestone of 100 gigawatts.
The Cabinet Committee on Economic Affairs (CCEA) of the Indian government recently announced its decision to classify large hydro power projects as renewable energy power plants. We have been reporting since 2016 that the Indian government is considering such a measure. However, it remains unknown as to why this decision remained pending for so long.
India considers hydro power projects with an installed capacity of 25 megawatts and above as conventional power plants and does not consider them as renewable energy power plants. Such a classification is not common in the world as China and Brazil — leaders in hydro power generation — consider all hydro power projects as renewable energy power plants.
As of December 31st 2018, India’s large hydro power capacity stood at just over 45 gigawatts while the combined installed capacity of solar, wind, small hydro (less than 25-megawatt capacity), biomass, and other renewable energy technologies stood at almost 76 gigawatts. With the CCEA’s decision, India’s total installed renewable energy capacity has jumped to an impressive 121 gigawatts.
This decision, and its timing, is a masterstroke by the government which faces elections in less than a month. One of the first major decisions announced by the government back in 2014 was to achieve an installed renewable energy base of 175 gigawatts. This target included 100 gigawatts of solar power, 60 gigawatts of wind energy and 15 gigawatts of other technologies like biomass and small hydro.
Now, there have been reports issued by several rating agencies that the government would likely miss the ambitious solar power target of 100 gigawatts. Additionally, the government is lagging behind on its initial aggressive timeline to auction onshore wind energy projects and open the offshore wind energy sector. As a result, this new decision had become a necessity.
We had also reported that the Ministry of New and Renewable Energy (MNRE), in October 2018, projected a solar power pipeline of almost 61 gigawatts which includes installed, under construction, and tendered capacities. The Solar Energy Corporation of India (SECI) has issued several more large-scale tenders since then. It is very likely that SECI and MNRE would push for allocation of more tenders among project developers as the deadline to March 2020 approaches (the Indian government plans to give project developers two years to commission allocated projects to reach the 175 gigawatt target by March 2022).
With this decision the share of renewable energy capacity in India’s overall power generation capacity has jumped from around 22% to over 34%, as of 31 December 2018.