Bridge to India analysis of data suggests that India’s renewable energy capacity addition in FY 2016-17 11.2 GW is at par with the country’s thermal capacity addition. The thermal capacity addition declined by nearly 50% in this fiscal, while the solar capacity addition grew by 83% as compared to the last fiscal. While the addition of 5,526 MW of solar capacity is impressive and given that it is 83% more than the FY 2015-16 it is commendable, still it is nearly 50% short of the annual target of 12,000 MW.
The addition of wind power, on the other hand, was 35% more than the annual target of 4000MW standing at 5,400 MW. Compared to FY 2015-16, it was 63% more. The country has plans to achieve a target of 175 GW of renewable capacity by 2022 and out of this 175 GW, 100 needs to come from solar. So far, India has managed to cross the 10GW mark; hence it needs to add another 90 GW capacity in five years. It looks like a difficult feat, but not impossible given that the government is hell bent on achieving it.
The central government has, in fact, doubled the approved capacity of the country’s solar parks and mega solar power projects. In February end, the number went up from 20 GW to 40 GW. In the month of March 2017, India added a renewable capacity of 5.8 GW, which was more than what was added in previous 11 months combined.
Bridge to India in a release said, “While financial year end is always busy, we suspect that there was considerable pressure on implementing agencies to boost March numbers to show respectable addition numbers. Second, the developers would also have been keen to bring numbers forward to take advantage of the many financial incentives including generation wind-based incentive for wind projects, accelerated depreciation and 10-year tax holiday that are going to be significantly cut or phased out completely from April 2017 onwards.”
For the current fiscal, the country has a target of 20,450 MW renewable energy capacity addition, which seems impossible to achieve given that the new renewable allocations are in a downward trend. The new tender and project allocations for the current fiscal are 70 and 30 percent down from last year standing at mere 4.2 GW and 6 GW respectively.
The addition of renewable capacity, however, signals the fact that prospects of thermal energy capacity addition get limited. It is expected that in coming years the renewables will beat the thermal decisively.