Renewable energy’s share in the energy mix decreased from 11.4 percent in Q2 FY20 to 10.7 percent in Q2 FY21, according to the latest edition of the CEEW Centre for Energy Finance’s quarterly Market Handbook.
A reason for the decline was the sharp reduction in wind speeds in resource-rich states (Gujarat, Rajasthan, and Tamil Nadu), leading to a ~41 percent reduction in wind generation in July 2020 as compared to July 2019. Q2 typically records the highest wind energy generation every year.
3.2 GW of renewables were auctioned in Q2 of FY21, as compared to 4.4 GW (excluding 8 GW sanctioned as part of a manufacturing-linked upsizing of a solar auction from an earlier quarter) in Q1 FY21. Auctions for vanilla renewable energy projects gave way to auctions for blended generation mixes in the last quarter. Auctioning blended solar and wind projects are aimed at improving the transmission infrastructure utilisation with higher capacity utilisation.
The share of top five developers in the total project capacity sanctioned – increased to 84 percent this quarter as compared to 81 percent in the previous quarter, and is expected to remain high going forward.
Aggregate renewable energy capacity additions slowed down in Q2, partly owing to supply chain disruptions due to COVID-19, which impacted grid-scale capacity additions.
Rooftop solar picked up with 399 MW capacity being added in Q2 FY21 (vs 188 MW in Q2 FY20). Gujarat, Rajasthan, and Tamil Nadu led the growth in rooftop solar installations. Coal capacity addition remained subdued with net Q2 addition of 550 MW, approximately a third of renewable energy additions of 1,560 MW during the same period.
“A five-month extension granted by the Ministry of New and Renewable Energy for grid-scale project commissioning could result in an uptick in renewable energy capacity additions as the lockdown eases further,” Nikhil Sharma, associate at the CEEW Centre for Energy Finance (CEEW-CEF), said.
Short-term electricity prices in both day-ahead and real-time spot markets saw an increase to 2.53 INR/kWh and 2.42 INR/kWh in Q2 FY21 from 2.35 INR/kWh and 2.22 INR/kWh in Q1 FY21, respectively. This was due to a recovery in demand from discoms and increased volumes when compared to Q2 FY20 levels.