India's 175GW renewable energy target increases difficulty

    According to data shared by the Indian Ministry of New Energy and Renewable Energy (MNRE) and the Standing Committee on Energy of the Parliament, in order to achieve the goal of 175 gigawatts (GW) of Solar Energy Photovoltaic renewable energy capacity, India needs 2.6 trillion yuan from now to the end of December 2022 Rupee investment.

    This means that the country must increase its annual expenditure on renewable energy projects to approximately 1.3 trillion rupees in the two calendar years of 2021 and 2022. However, this is a far cry from the average annual investment of Rs 823 billion that has been completed in the past five years.

    At present, India’s installed renewable energy capacity is 87 GW, and the capacity being implemented is about 30 GW. In other words, India needs 58 GW to complete the above goal.

    According to the report, “the capital requirement for 58 GW capacity is approximately 2.6 trillion rupees, which is calculated at a cost of 45 million rupees per megawatt. In the next two to three years, debt financing will require 1.827 trillion rupees, and equity financing will be Rs 7,830 crore.” However, it added that the cost of wind and solar technology is expected to be further reduced in the future.

    According to statistics, from the 2010-11 fiscal year to the 2019-20 fiscal year, India's renewable energy sector received foreign direct investment FDI totaling 8.407 billion U.S. dollars. Among them, in the 2018-2019 fiscal year, renewable energy FDI reached 1.446 billion U.S. dollars, the highest in this decade, followed by the 2019-20 fiscal year, which received FDI 1.393 billion U.S. dollars.

    In addition, renewable energy sources that received more than US$1 billion in FDI in the fiscal year include the 2012-13 fiscal year, which received an investment of 1.1 billion US dollars, and the 2017-18 fiscal year, which received an investment of 1.2 billion US dollars.

    According to the report, the Indian Renewable Energy Development Agency (IREDA) is the only public sector financial institution that provides financing for renewable energy projects and must be prepared to take on additional responsibilities and provide funding for the installation of renewable energy projects.

    It said: “Therefore, the committee recommends that the ministry mobilize more long-term financing and concessional loans through multilateral and bilateral agencies as much as possible.”

    According to the report, as of June 2020, out of 87 GW of installed renewable energy projects, IREDA has provided 229 projects with loans of Rs 25,92.26 crore, totaling 11,830.69 MW.