India is emerging as a renewable energy powerhouse with a surge in both capacity addition and tendering to add more plants, Institute for Energy Economics and Financial Analysis (IEEFA) said.
Renewable energy in India accounted for 71.5 percent of the record 13,669 megawatts (MW) power generation capacity added in the first quarter (Jan-Mar) of 2024. Coal’s share (including lignite) of total power capacity dropped below 50 percent for the first time since the 1960s.
Tender issuances for large-scale renewable energy projects crossed record 69 gigawatts (GW), according to the report.
The tenders issued for utility-scale renewable energy projects in FY2024 surpassed India government’s target of 50GW.
“After a slump from 2019 to 2022 due to supply-chain issues and price spikes brought on by the COVID-19 pandemic and Russia’s invasion of Ukraine, the market has rebounded and gone from strength to strength,” says Vibhuti Garg, Director – South Asia, IEEFA.
India has rocketed to third in the world’s solar power generation rankings, behind only China and the US, according to Ember’s fifth annual Global Electricity Review of 80 countries, released last week. Ranked ninth in 2015, India has now surpassed Japan, which, along with fellow G7 member Germany, has a stubbornly high demand for coal.
Solar was the world’s fastest-growing electricity source for the 19th straight year, adding more than twice as much new electricity as coal last year. India had the world’s fourth-largest increase in solar generation in 2023 (+18 teraWatt hours/TWh), behind China (+156TWh), the US (+33TWh) and Brazil (+22TWh). The top four countries accounted for three-quarters of solar growth in 2023.
Since 2000, the share of global electricity from renewables has expanded from 19 percent to more than 30 percent, driven by an increase in solar and wind from 0.2 percent in 2000 to a record 13.4 percent in 2023.
As a result, the carbon dioxide intensity of global power generation reached a record low in 2023, 12 percent below the 2007 peak.
“A renewables-powered future is now becoming a reality,” said Aditya Lolla, Ember’s Asia programme director. “Solar power, in particular, is growing at an unprecedented pace.”
India has been unable to shed its dependence on coal. Adverse weather conditions and surging power demand will force India to rely on coal for over 70 percent of its electricity generation. The situation is unlikely to change this year, with the Central Electricity Authority expecting a shortfall in hydropower, leading to power shortages, especially during the night when solar is offline.
India’s push towards renewable energy has attracted a host of new players at state, national and international level. Of the record 69GW in tenders awarded in FY2024, a quarter were from the Solar Energy Corporation of India (SECI).
Gujarat-based Gujarat Urja Vikas Nigam (GUVNL) has established itself as one of the leading tendering entities in India.
Similarly, the prominence of other state-level entities, such as Rajasthan-based Rajasthan Urja Vikas Nigam Limited (RUVNL), underlines the vibrancy of the renewable energy tendering ecosystem.
Growth in solar and wind pushed the world past 30 percent renewable electricity for the first time in 2023, Ember’s review found. India generated 5.8 percent of its electricity from solar in 2023, in line with the global average, which hit an all-time of 5.5 percent in 2023.
This year (CY2024), India has already posted a record solar power capacity installation of 8.5GW during the first quarter, driven by many projects coming online, including Adani’s 1.6GW solar project at Khavda in Gujarat.
“The record solar installations were driven by a sustained year-on-year increase in tendered capacity and the urgency in commissioning of projects prior to the onset of the Approved List of Models and Manufacturers (ALMM) policy from 1 April 2024,” says Charith Konda, IEEFA’s energy specialist, India mobility and new energy.
Tendering activity in FY2024 reaffirms that the future for India’s renewable energy sector is bright, with market stakeholders confident the annual tendering capacity will again cross the national target of 50GW in FY2025.