India’s Ministry of New and Renewable Energy (MNRE) recently announced the capacity addition target for 2019-20. The target is the lowest in four years, giving an indication that renewable energy sector in India needs urgent policy and financial support.
The MNRE has set a target to add 12.8 gigawatts of renewable energy capacity across five major technologies — wind, solar, small hydro (capacity less than 25 megawatts), biopower, and waste. The target is 18% lower than the capacity addition target for financial year 2018-19.
None of the technologies have been assigned a target greater than last year’s. The target for wind energy capacity addition has been set at 4 gigawatts, same as the last four years. This trend is, however, justified. Wind energy capacity addition in India is now highly regulated, as is the case with solar power. New wind energy projects are being added almost entirely through competitive auctions, with the Solar Energy Corporation of India (SECI) holding almost all auctions. The target has thus been set based on the auctions held in the previous two years.
Similarly, the solar power capacity addition target has also been set based on the auctions held over the last couple of years. The capacity addition target, at 8.5 gigawatts, is the lowest in four financial years, and a sharp drop from 11 gigawatts in 2018-19. The 8.5 gigawatt target includes 1 gigawatt of rooftop capacity as well.
After at least four years of poor performance, the MNRE decided to drastically cut the target for small hydro technology. Traditionally, hydro power projects with a capacity less than 25 megawatts were considered renewable energy projects. While the government did reclassify all hydro power projects under the renewable energy category, the MNRE is yet to make changes to its reporting structure. Just 50 megawatts of small hydro capacity is targeted for addition this financial year compared to 250 megawatts last year. The four-year average capacity addition target before 2019-20 was around 238 megawatts while the average achievement was 118 megawatts.
The target for biopower technologies has also been reduced sharply. The MNRE has set a target of just 250 megawatts compared to 350 megawatts last year and the four-year average target of 373 megawatts. The average capacity addition through this technology over the last four years is 302 megawatts.
Finally, a meager target of 2 megawatts has been set for waste-to-power technology, same as the last year. Unfortunately, and despite the government’s favorable policies, no capacity was added through this technology in three of the last four years.
Only once in the last four years has India been able to meet or overachieve its renewable energy capacity addition target. Despite the favorable policies and increased investment the average rate of target achievement in the last four years has been 80% and just 54% in the last three years.
At the end of financial year 2018-19, India’s renewable energy capacity stood at 78.3 gigawatts, and with the inclusion of large hydro power capacity this increases to 123.7 gigawatts.