The Indian renewable energy sector is the fourth most attractive renewable energy market in the world. In 2019, India was ranked 5th in installed renewable energy capacity in the world, 4th largest installed capacity of wind power and 5th largest installed capacity of solar power in the world.
Renewable energy sources have a combined installed capacity of 81+ GW, pegged at around 22% of the country's total energy capacity. Wind power accounted for the highest at 46% (around 36 GW), followed by solar with a share of 36% (30 GW). The remaining market was captured by biomass at 12% (9 GW) and small hydro projects catering to 6% (5 GW). Wind energy capacity in India has increased by 1.7 times in the last 4 years. Solar power capacity has increased by more than 11 times in the last five years from 2.6 GW to 28.18 GW in March 2019.
With the increased support of government and improved economics, the sector has become attractive from investors perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role. As a part of its Paris Agreement commitments, the Government of India has set an ambitious target of achieving 175 GW of renewable energy capacity by 2022. These include 100 GW of solar capacity addition and 60 GW of wind power capacity. Government plans to establish renewable energy capacity of 500 GW by 2030.
The Government of India is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas.
It is expected that by the year 2040, around 49 per cent of the total electricity will be generated by the renewable energy, as more efficient batteries will be used to store electricity which will further cut the solar energy cost by 66 per cent as compared to the current cost. Use of renewables in place of coal will save India Rs 54,000 crore (US$ 8.43 billion) annually. The renewable energy will account 55 per cent of the total installed power capacity by 2030.
In Annual budget for the year 2020-21, ₹220 billion (~$3.08 billion) has been allocated for the power and renewable sectors. A lot more initiatives from GOI have been taken in recent past and present to achieve ambitious renewable energy targets. Many Government sponsored programs like Ujjwala, PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha Evam Utthan Mahabiyan) and others which not only provide enabling the rural people and farmers to use clean energy and less fossil fuels but also make them energy independent and aim at doubling their income by setting up solar power plants on their agricultural lands and selling solar power to the grid.
The Government also look to develop solar capacity along the 27,000 km of railway tracks on lands owned by Indian Railways. Besides this, latest budget has also announce incentives to the states that are taking measures for cleaner air in big cities. Apart from all these measures, some policy measures have also been announced to make this segment lucrative that includes lower corporate tax rates i.e 15% for new companies into manufacturing and electricity generation, abolishment of dividend distribution tax, 100% tax exemption on income earned by sovereign foreign wealth funds, new smart solar cities in public-private-partnership (PPP) model and other steps to encourage foreign investments and creating liquidity in Indian NBFCs to fund renewable power projects in the country.
India has great prospects in renewable energy sector and so we have a long journey to fulfil our dreams to become self-sustainable in our green energy requirements. Briscon Energy is a company on mission to become green energy partners for its customers by building solar power plant assets and providing self-sustainable and affordable clean energy to them.
Ajit S. Chauhan