India may not reach clean energy target, says energy consultancy firm

India could fall short of its target of adding 175 GW of clean energy by the end of 2022 due to uncertainty around safeguard duty and weak financial position of power distributors, a survey by renewable energy consultancy firm Bridge to India shows.

The survey, which covered top executives of over 40 Indian and international companies, also points to prospects for domestic solar manufacturing remaining bleak, which could cap growth of India’s total integrated module manufacturing capacity at below 3 GW by 2022.

“India is expected to add total solar and wind capacity of 66 GW and 52 GW by March 2022, 66% and 87%, respectively, of the targets set by the government,” said the RE CEO Survey 2018, which was shared exclusively with ET.

Clean energy players including Hero Future Energies, Engie, Aditya Birla Group, Sembcorp, Azure Power, Trina Solar, Schneider Electric and Larsen & Toubro participated.

More than 70% of respondents said the current bidding environment is “irrationally aggressive”. Tariffs for wind and solar energy hit.`2.43 and .`2.44 per unit, respectively, last year, making renewable energy cheaper than thermally-generated power. Though green energy tariffs have shown a northward trend in recent auctions, they still hover below .`3 per kWh.

Tariffs ought to move up particularly in view of increasing tender issuance, but it remains to be seen whether distribution companies, or discoms, are willing to accept that, the executives said. According to the survey, solar capacity addition would reach 50-75 GW by 2022, as against the government’s target of 100 GW.

Of the 100 GW from solar, 40 GW is to come from the rooftop segment and the remaining from ground-mount projects. Rooftop remains the stumbling block of the solar initiative, as widely acknowledged by industry watchers.

About 60% of the respondents in the survey said total solar rooftop capacity addition would be less than 10 GW by March 2022. It is below 2 GW at present.

The industry pointed out that storage needs to become mainstream as it is an important component of the energy grid. High cost, lack of awareness and enabling policy environment are impediments to the growth of storage in India, they said.

However, despite the challenges, business sentiment remains upbeat, as it is a rapidly growing sector, and the government remains committed to its targets, Bridge to India said.

“While there are challenges, the government seems to be committed to the sector and moving rapidly to find solutions,” said Vinay Rustagi, managing director at Bridge to India. “The tender pipeline has been very active and the M&A activity has also been robust. That is why people feel that there is business growth and there is an opportunity for them to create value.”

The remaining 15 GW of the 175 GW target comprises biomass and small hydro, which the survey does not explore.

Source Economic times : 
https://economictimes.indiatimes.com/industry/energy/power/india-may-not-reach-clean-energy-target-says-energy-consultancy-firm/articleshow/64196487.cms