According to PWC's Kameswara Rao, the renewable energy investments in solar and wind have benefited from a strong central policy and several years of early-stage private sector investment, respectively.
Helped by policy initiatives and early stage private investments in solar and wind power, the renewable energy sector has for the first time surpassed the hydro power generation.
According to the Central Electricity Authority data, the total capacity of renewable energy sector increased to 42,849.38 mw, surpassing the total capacity of hydro power sector at 42,783.42 mw, out of the nation’s total installed capacity of a little of 3 lakh mw on April 30, 2016.
The total capacity of thermal sector stood at 2,11,420.40 mw, the data showed.
According to PWC’s Kameswara Rao, the renewable energy investments in solar and wind have benefited from a strong central policy and several years of early-stage private sector investment, respectively.
In contrast, hydro power suffered from multiple challenges, including non-availability of long-term financing; the cost imposed by royalty power (from 12 per cent to 36 per cent) to be offered free to the state government; and limited opportunities for the private sector, he said.
“This is potentially changing, as the central government has proposed to give policy attention to hydro power too. Further, the government’s bilateral efforts with Bangladesh to implement cross-border transmission means that hydro-power from the north-eastern states can be delivered to the load centres cheaper than before,” he said.
The government has ambitious plans for deployment of 175 GW renewable power capacities by 2022, including 100 GW of solar and 60 GW of wind, which may require investment of around USD 150 billion in the next seven years.