Beyond plunging tariffs, addressing a few ticklish issues can make it easier for India to meet the big renewable energy target by 2022.
Driven by a historic low solar and wind power tariffs, India is about to take a leap of faith on the renewable energy front. Taking advantage of the falling power rates, the Central government is lining up green project auctions to the tune of about Rs 2.7 lakh crore during the next financial year. The government has drawn up a plan to auction 30 gw of solar, 10 gw of wind and 5 gw of offshore wind projects in 2018-19, pegged at Rs 2.7 lakh crore with an average equipment cost of Rs 6 crore per MW.
To put things in perspective, wind power tariff dropped sharply to an all time low of Rs 2.43 per unit during an auction conducted by Gujarat Urja Vikas Nigam (GUVNL) recently. In October last year, the tariff was down at Rs 2.64 during the second auction of Solar Energy Corporation of India (SECI) for 1 gw of projects. In the first round of bidding, the tariff was ruling at Rs 3.46 per unit.
As for solar power too, the tariff dropped to a record low of Rs 2.44 during an auction last year. Investors are upbeat about the government's new proposal of offering incentives in the order of Rs 11,000 crore to promote domestic manufacturing of solar equipment. It is likely to be approved and implemented during the course of this year.
Adding capacity
India's renewable energy capacity stands at a little over 62 gw or 62,054 MW. It is still a long way from the very ambitious target of 175 gw by 2022. The big target includes 100 gw of solar power and 60 gw of wind energy.
The renewable energy sector added close to 12 gw, or 11,788 MWto be precise, in the eleven months of 2017. The solar segment was the driver of capacity addition in the green energy sector, while the wind power sector has been struggling to bring in new capacity from April last year due to some challenges in tariff. However, wind energy accounts for a major share in the total installed capacity of the sector.
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