India is looking to attract investments up to $200-300 billion for its renewable energy infrastructure in the upcoming decade with the global cash inflow doing a crucial role, forecasts a top analyst with a leading US-based institute.The Indian decarbonisation policy aligns with the global trend which allures investments in renewable energy infrastructure, said Tim Buckley, Director of Energy Finance Studies Australasia with the Institute for Energy Economics and Financial Analysis (IEEFA).
India’s 80 per cent of electricity is produced from Thermal Power, 10 per cent from Hydro and only 7 per cent from renewables. Despite of this India has set an ambitious target of installing about 275 GW of renewable capacity by the end of 2027, which is achievable.
India is tapping into renewable energy gradually. The year 2016-17 proved the best year for renewables in India with the net thermal capacity being reduced and doubling the installations of renewables, said Buckley in his report “Indian electricity sector transformation” on Tuesday. The streak continued in 2017 with costs of both going down by 50 per cent and recent tenders taking the renewable’s tariff 20 per cent lower than that of the average price of Indian Thermal Power generation.
Power demand in India would double over the next decade and the big question is how India is going to meet its demand for both India and the World. India is world’s second largest producer, consumer, and importer of thermal coal. India is also the third largest user of electricity in the world, after China and US.
Owing to the path followed by India of developing renewable energy infrastructure, prices of both wind and solar nergy tariffs have fallen significantly with record low prices observed this year.During the period, only 7.7 GW of net thermal power capacity was added far lower than the roughly 20 GW added annually in preceding 4 years, while the addition of renewable jumped to 15.7 GW, said the report.
Speculations about rising module prices has concerned many in India but the IEEFA pointed towards the record low $0.018 and $0.021 per kWh tariffs bid in Mexico and Chile respectively in the last week.Clearly, India can expect further fall in the renewable energy tariffs in the medium term, the report said.
Despite an expected surge in renewables, IEEFA forecasts that the net addition of thermal power capacity is going to stay below 5GW annually because of the increase in retirements of highly polluting, end-of-life sub-critical coal-fired power plants. The retirements are likely to be catalyzed by the fact that tariffs of Solar and Wind Energy has fallen significantly lower than that of the existing thermal power plants.
“The challenges to integrating India’s 40 per cent renewable energy target by 2030 are real, but the momentum over the past three years, gained through government policy and economics merit, give us confidence India will stay the course,” as per the report.Good news is that India has gone up by 6 positions to 14th position in the Climate Change Performance Index 2018 out of 56 nations and the European Union by environmental organization GermanWatch.