Bridge India

The UP state government has approved a new solar policy with a target of developing 10,700 MW of total solar capacity in the state by the year 2022. 60% of this target (6,400 MW) is proposed to be developed through utility scale projects and balance 40% is planned for rooftop solar systems.  The total target has been determined so as to achieve renewable purchase obligation of 8%. The policy has some attractive provisions on paper in line with many other states. But it lacks specifics and is very generic in nature leading us to question if it will make any material difference on-the-ground.

Rooftop solar losing steam

BRIDGE TO INDIA has released the latest edition of its India Solar Rooftop Map report. As per the report, India added new rooftop solar capacity of 840 MW in the 12 months ending September 2017. Total installed capacity as of September 2017 stood at 1,861 MW. The sector has grown at a CAGR of 83% from 2013 to 2017 but growth in 2017 is expected to slow down to 60%.

M&A activity in the Indian renewable sector has been building up for some time but actual deals have been slow to materialize. Last month, Equis announced the sale of its 4.7 GW Asia pacific renewable IPP business to a consortium comprising Global Infrastructure Partners (GIP), China Investment Corporation and Public Sector Pension Investment Board of Canada. The Equis portfolio comprises over 600 MW of renewable assets in India including 414 MW of operational wind and 130 MW of operational solar assets.

Bad habits haunt the RE sector

For more than 2 years, there have been persistent concerns that aggressive bidding in solar auctions is storing up trouble for the sector. Fortunately for the sector and the winning bidders, equipment costs kept falling more sharply than market expectations – 20% and 25% in 2015 and 2016 respectively. Developers have ridden the wave of falling costs and project delays to make handsome profits.

The Ministry of New and Renewable Energy (MNRE) has announced a new RE rollout plan entailing 91 GW of new solar and wind project tenders by March 2020. It is an ambitious attempt by the new MNRE administration to address private sector concerns about slowing project pipeline and lack of a clear roadmap. It envisages 67 GW of new solar project tenders and 24 GW of new wind project tenders by March 2020 as well as 20 GW of integrated solar module manufacturing capacity addition. With these planned projects, the new Minister for power and new and renewable energy, R.K. Singh, believes that India would “…comfortably achieve a rather conservative RE target of 175 GW by 2022 and even exceed it….”

Recently, there was a news report that the Indian government wants to issue a single 20 GW solar tender to boost solar project development and domestic manufacturing. R.K. Singh, the new Minister for Power and New and Renewable Energy, has also publicly stated that he wants to auction 4.5 GW of wind power contracts in the next few months followed by 20 GW in the next two years for expediting achievement of ambitious clean energy targets.

The Government of India has launched SAUBHAGYA scheme for providing universal electricity access to all households in India by March 2019. The government estimates that there are 46 million unelectrified households in India at present and this scheme will primarily target the 30 million below poverty line households not covered by other ongoing electrification schemes. Target households will be...