In the wake of climate change, there’s an increasing push for the renewable energy industry to grow and many governments across the world are trying to shift their dependence from fossil fuels to renewable sources like solar, wind and hydro, etc.
India took everyone by surprise when Narendra Modi, at the COP26 climate conference in Glasgow said that India will achieve net-zero emissions by 2070. 51.1% of power generation in India happens through Coal and if we are to achieve the target set by our premier, we need to totally get rid of Coal by the next 48 years.
Currently, as of 31 March 2022, 39.2% or 1,56,608 MW of power in India is generated through Non-Renewable sources like Wind, Solar, Hydro and other RE. This 156.6 GW is a great step ahead looking at the power generation from renewables last year which stood at 94.4 GW at the end of FY21.
There has been a 250% increase in renewable energy capacity in India from 2014-2021. Apart from that, the IBEF report on the renewable energy industry in India also states that we rank in the top 5 in terms of installed renewable energy capacity in the world. While these figures may look good, we are still behind China in terms of installed capacity.
China’s total installed capacity at the end of 2021 stood at 1063 GW compared to 151.4 GW of that in India, which is 7 times as that of India. Therefore we need to increase the installed capacity and lower our dependence on non-renewables if we are to achieve the 2070 target.
In terms of budgetary support, the FY2022-23 budget has allocated Rs. 19,500 crore for PLI scheme to boost the manufacturing of high-efficiency solar modules. The PLI or Production Linked Incentive scheme is aimed at incentivizing manufacturers to produce high-efficiency modules and source their materials from domestic suppliers.
Only 6 states contribute to roughly 78% of the total installed RE capacity as of 31 March 2022 according to the latest Physical Progress report released by the Ministry of New and Renewable Energy. These states are namely Rajasthan, Gujrat, Tamil Nadu, Karnataka, Maharashtra and Andhra Pradesh. This shows that there is immense scope for states to install RE capacity and thus increase the country’s overall capacity in the coming years. To give you an example, Karnataka has around 16,000 MW of installed RE capacity where its only 600 MW for West Bengal.
India aims to have 500 GW of installed capacity by 2030 and it seems India can comfortably reach there if more and more states shift their focus to renewables. In terms of investment, a total of $70 Billion has been spent in this secotr in the last 7 years and around $7.25 Billion FDI has flown in since 2014-15 till June 2021. The FDI in FY21 stood at $797.21 Million and around $1 Billion was received in FDI in the first half of FY22.
With increasing emphasis on green hydrogen, EVs and solar power and other policy support we can expect the Renewable Energy Industry to significantly grow in the years to come.