Possible uncertainty related to general elections, regulatory delays, and a dearth of easy funding seems to have contributed towards India missing its 2018-19 renewable energy capacity addition target by 45%.
India’s Ministry of New and Renewable Energy (MNRE) recently reported the capacity added during the financial year 2018-19, that is between April 2018 and March 2019. The data shows that the actual capacity added was just 55% of the target specified for the financial year.
While the percentage achievement did improve compared to FY2017-18, the 55% achievement does indicate that the Indian renewable energy market may be running out of steam. The recent trends seen in auctions and the rate of addition of new projects that had already been auctioned several months back seem to indicate the same.
A large number of auctions in the recent past remained undersubscribed or were cancelled due to tariff bids that seemed very high to government agencies. Complexities related to taxation, import duties on solar power equipment, and issues related to land acquisition and transmission infrastructure also plagued project developers.
With general elections almost over in India, a new government would likely set the mood among project developers and other stakeholders and the direction for the overall renewable energy sector in the country.
Around 1.5 gigawatts of wind energy capacity was added in FY2018-19 compared to the target of 4 gigawatts. This marks a huge improvement compared to previous financial years addition of just 569 megawatts against the same target. The sector surpassed capacity addition targets in FY2015-16 and FY2016-17 by around 40%.
The solar power sector also fared slightly better with the achievement of 59% of the target capacity of 11 gigawatts. More than 6.5 gigawatts of solar power capacity was added in FY2018-19 compared to 4.7 gigawatts in FY2017-18 and 5.5 gigawatts in FY2016-17.
Small hydropower registered similar capacity addition trends as seen in the last three financial years. The sector has been widely neglected in the government’s policies which are now more focused on wind and solar power. The capacity addition target for the technology has remained virtually unchanged for the last four financial years, 200-250 megawatts. The target achievement increased from 19% in FY2017-18 to 43% in FY2018-19.
Only biopower could register over-achievement in capacity addition. The target had been set for addition of 350 megawatts while 413 megawatts were added in FY2018-19, up from 232 megawatts against a similar target in FY2017-18.