Bid & Tender

News

India to Add 10,000 Mw of Renewable Energy Generation Capacity Next Fiscal

India is likely to commission renewable energy projects with a capacity of 9,000 Megawatt (Mw) in the current financial year (2018-19) and 10,000 Mw in the next fiscal ending March 2020, based on the trend of projects awarded over the past two calendar years.

 

“The projects awarded by the central nodal agencies and state distribution utilities in Calendar year 2017 and 2018 provide a reasonably healthy visibility for RE capacity addition in FY2019 and FY2020 with expected addition of about 9 GW in FY2019 and about 10 GW in FY2020,” research and ratings agency ICRA said today.

 

The capacity addition is expected to increase the share of renewable energy in the country’s overall generation to 10 per cent by 2019-20 and further to 13 per cent by 2021-22 based on the capacity addition forecasts.

 

The share of renewables in the overall generation mix has risen from 5.6 per cent in 2014-15 to 7.8 per cent last fiscal. This was mainly owing to the large-sized capacity addition in the wind and solar power segments during this period on the back of policy support from the government and the improved tariff competitiveness of wind and solar power against conventional power sources.

 

The renewable energy sector remains exposed to near-term challenges arising due to the cost impact of safeguard duty and rising interest rates, coupled with transmission network availability, ICRA said. The average bid tariffs discovered in the auctions for wind and solar projects in 2018 has so far remained at Rs 2.6-2.7 per unit, increasing slightly from the low of Rs 2.4 per unit.

 

“This uptrend in bid tariffs was partly driven by factors such as cost headwinds arising from rising interest rates, increase in capital costs due to imposition of taxes and duties, rupee depreciation against dollar for imported equipment; and rising equipment costs,” the agency said.

 

Amid the imposition of safeguard duty, the recent order issued by the Central Electricity Regulatory Commission (CERC) approving the GST claims raised by solar power developers is a positive development for the sector. ICRA, however, said a time lag in implementation of such pass-through of cost increases cannot be ruled out, given the resistance shown by the end off-takers in such cases in the past.

BACK

Related News