Covid-19 has been the latest reason for capacity addition lacking the required momentum, with 83 GW still to be installed by December next year
As the deadline of December 2022 for achieving 175 GW of renewable energy (RE) capacity draws closer, it is becoming clear that nothing short of an exponential jump in capacity addition would allow India to reach the target. With an installed RE capacity of 93 GW as of March 2021, there remains a deficit of 83 GW to be bridged, that too in merely 21 months. This has made the parliamentary Standing Committee on Energy ask the Centre to formulate strategies that speed up capacity installation.
Several factors have contributed to capacity addition lacking the required momentum, though in the last one year it is Covid-19 that has impacted project auctions, awards, and commissioning, affecting projects that were already facing economic pressures. As an emergency measure against the pandemic, a blanket extension of six months was granted to all projects that needed imports or were to be commissioned. Anuja Tiwari, Partner, Infrastructure and Energy at AZB & Partners, says, “for a host of reasons it appears we will be on the lower side of 75% of the 175-GW target”.
Kameswara Rao, Lead, Energy practice at PwC, differs, saying “we should finish fairly close to the target, possibly falling short by about 15%. This itself is an achievement given delays in project implementation due to the pandemic. It is time to move away from targets and tariffs. Instead, the focus must be on measures needed for renewable energy to meet consumer demand.”
Since the launch of the National Solar Mission plan in 2010, 39 GW of solar energy capacity has been installed, as against the target of 100 GW. Another 36 GW of solar energy projects are under implementation, the Standing Committee on Energy report said. The wind segment saw an addition of 37.7 GW in the last decade, as against the targeted capacity of 60 GW.
But it is rooftop solar that has seen the slowest growth, with capacity addition standing at a meagre 4.4 GW as of March 2021. Merely 430 MW of rooftop installations materialised in 2020, as against the year’s target of 3,000 MW. Lack of awareness has been cited as the main reason for the slow growth of the rooftop sub-sector. The parliamentary committee has recommended that the Union government should widely advertise the benefits of rooftop solar and the incentives it is offering for the same. While there should be a single-window system at the district-level to facilitate rooftop installations, a higher subsidy for customers in the lower income group would go a long way in increasing its adoption, it has said.
The lack of required momentum in the RE sector is also evident from the progress made on the green energy corridors, which were launched in 2015-16 for evacuation of renewable energy from remote locations. The evacuation infrastructure has seen an addition of 7,365 circuit kilometres (ckms), as against the target of 9,700 ckms, while substation capacity of 9,700 million volt ampere (MVA) is way below the targeted 22,600 MVA.
Shubhranshu Patnaik, Partner at Deloitte, says the pace of growth is partly attributable to Covid. Also, since the solar park scheme got exhausted, auctions have seen bidders taking a view on the available transmission interconnection and corridors. “Delay in meeting the target is not an overwhelming concern for now as demand too was affected by Covid and will likely lag 2022 projections. With renewables being the primary means of generation capacity addition in the country, growth in this segment is inevitable. The long term target is already being pegged at 450 GW by 2030, which seems achievable,” he says.