After a year of relative lull, renewable energy will be back on track in 2019 with new plants being set up and the introduction of the much anticipated policy on battery storage. This will also be the year when floating solar projects will add significant capacity to the country’s generation scene, according to the India RE 2019 Outlook published by renewable energy consultancy Bridge to India.

Total renewable energy capacity addition in 2019 will be 15,860 megawatts (MW), up 50% compared to 2018, when there was a lack of clarity on goods and services tax (GST), safeguard duty and BIS standards, besides slow construction of large parks and poor grid connectivity. “Dictated purely by tender timetables, capacity addition should jump from 10,560MW last year to 15,860MW in 2019,” the report, shared exclusively with Mint, estimates. “Most of the uplift will come from utility scale solar although rooftop solar is also expected to register another year of fantastic growth.”

The renewable energy sector in India had a sobering year in 2018 with the number of new projects slowing down and investors finding that the sector was generating lower power and financial returns than they had expected, Mint had reported in November.

But the tide is about to turn. In fact, the recent report estimates that 2019 will, for the first time, cross the 10,000MW of generation capacity in utility scale solar, that is, large solar farms. More than 75% of new capacity is expected to come up in Rajasthan (over 2,000MW), Andhra Pradesh (1,950MW), Tamil Nadu (1,872MW) and Karnataka (1,555 MW). More than 30 developers are expected to commission utility scale solar projects in 2019, with Azure Power and ACME Solar leading the pack, while Ayana Renewable Power Pvt. Ltd, Raasi Green Earth Energy Pvt. Ltd, Asian Fab Tec Ltd, Think Energy Partners (TEP) and Technique Solar Ltd are expected to commission their first ever projects in India.

Floating solar is expected to make major strides as well in 2019. Recent tender results indicate a sharp dip in tariff premium over ground-mounted plants, while the falling cost and constraints in land and transmission capacity will force policymakers to prioritise floating solar. “We expect a surge in floating solar tenders with an aggregate issuance of up to 5GW. Our estimates include 83MW of floating solar capacity addition (33MW, NTPC Kerala tender and 50MW, SECI Uttar Pradesh tender).”

Rooftop solar capacity addition in 2019 is expected at 2,368 gigawatts (GW), 49% higher than in 2018, while about 290MW will come from off-grid capacity, mostly from solar pump installations. The report estimates that the new year will also witness greater adoption of new technologies such as mono-type modules, micro inverters and storage, with the likely announcement of a national storage mission.

For wind energy, the report expects that projects will be commissioned by Adani, Orange Renewable, Engie, Sembcorp Industries Ltd and Torrent Power Ltd. The sector will add about 2,300MW capacity in 2019, up 18% over the previous year, all of which will come up in Tamil Nadu and Gujarat.

The report, however, warns against overt exuberance by the government in announcing new renewable energy projects. In December 2018, the ministry of new and renewable energy had announced that it plans to issue 80GW (60GW solar and 20GW wind) of tenders by March 2020. “We believe that such large issuance is implausible and not consistent with the overall power demand-supply situation, or actual land and transmission infrastructure available. A pressure to issue more tenders would see a recurrence of problems witnessed last year—lack of planning, poor tender design, arbitrary tariff ceilings—resulting in under subscription and cancellations.”

Tariffs in the renewable energy sector will also remain the same, within the current ₹ 2.50-3.00/kWh range, depending on project location and offtake risk profile, given no major change in input costs, the report added.

Overall, the sector is bound to continue its struggles with GST, safeguard duty, funding availability and transmission connectivity, Vinay Rustagi, managing director, Bridge to India, said in a note.

With the general elections around the corner, “politics is likely to dominate over reforms and the swift resolution of sector problems is unlikely,” Rustagi said. “On the plus side, we don’t expect any retreat in the push for RE, irrespective of who comes to power.”

The Indian government has set an ambitious target of generating 100GW of solar power by 2022 from the existing installed capacity of 21.65GW. However, the likelihood of achieving the target has repeatedly been questioned by industry insiders.


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