Renewables are expected to supply 40 percent of India’s electricity

The Indian renewable energy sector has emerged as the world’s second most attractive renewable energy market after China, and fourth in the world in terms of total installed wind power capacity. Installed power generation capacity of renewable energy has rapidly increased over the years, posting a CAGR of 9.29 per cent over FY08–18. India added record 11,788 MW of renewable energy capacity in 2017-18. The focus of Government of India has shifted to clean energy after it ratified the Paris Agreement. With the increased support of government and improved economics, the sector has become attractive from investors perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role.

The installed capacity of renewable energy, including large hydro projects, in India exceeds 114.43 GW (of May 2018), which is around 33 per cent of total energy capacity of the country.

• A new Hydropower policy for 2018-28 has been drafted for the growth of hydro projects in the country.
• The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.
• The Ministry of New and Renewable Energy (MNRE) has decided to provide custom and excise duty benefits to the solar rooftop sector, which in turn will lower the cost of setting up as well as generate power, thus boosting growth.
• Around 4.96 million household size biogas plants were installed in the country under the National Biogas and Manure Management Programme (NBMMP) by 2016-17 end.
• The Indian Railways is taking increased efforts through sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33 per cent by 2030.

According to data released by the Department of Industrial Policy and Promotion (DIPP), FDI inflows in the Indian non-conventional energy sector between April 2000 and December 2017 stood at US$ 6.26 billion. More than US$ 42 billion has been invested in India’s renewable energy sector since 2014.

• Some major investments and developments in the Indian renewable energy sector are as follows:
• With 28 deals, clean energy made up 27 per cent of US$ 4.4 billion merger and acquisition (M&A) deals which took place in India’s power sector in 2017.
• In March 2018, ReNew Power finalised a deal estimated at US$ 1.55 billion to acquire Ostro Energy and make it the largest renewable energy company in India.
• World’s largest solar park named ‘Shakti Sthala’ was launched in Karnataka in March 2018 with an investment of Rs 16,500 crore (US$ 2.55 billion).
• Solar sector in India received investments of over US$ 10 billion in CY 2017.
• Private Equity (PE) investments in India’s wind and solar power have increased by 47 per cent in 2017 (January 1 to September 25) to US$ 920 million, across nine deals, as compared to US$ 630 million coming from 10 deals during the corresponding period in 2016**.

With a potential capacity of 363 gigawatts (GW) and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India.

The Government of India is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 175 GW by 2022 of which about 100 GW is planned for solar, 60 for wind and other for hydro, bio among other. India will need investments of around US$ 125 billion to reach this target. As of June 2018, Government of India is aiming to achieve 225 GW of renewable energy capacity by 2022, much ahead of its target of 175 GW as per the Paris Agreement.

It is expected that by the year 2040, around 40 per cent of the total electricity will be generated by the renewable energy, as more efficient batteries will be used to store electricity which will further cut the solar energy cost by 66 per cent as compared to the current cost. Use of renewables in place of coal will save India Rs 54,000 crore (US$ 8.43 billion) annually.