India’s renewable energy boom shows no signs of slowing down. In the first five months of the financial year—from April to August—developers added a whopping 27 gigawatts (GW) of gross renewable capacity, according to a fresh HSBC report released Thursday.
Out of that, 20 GW went live by the end of August. Even better, another massive 142 GW sits in various stages of construction, data from the Central Electricity Authority shows. This surge in solar power and other green projects in India is fueling hopes for a cleaner energy future.
Experts say things could speed up even more as interstate transmission lines come online. Plus, recent mergers and acquisitions in the sector, along with potential stock listings by renewable developers, should pour fresh capital into speeding up these projects.
“Innovative tenders are driving down costs for energy storage, making renewable power even more appealing,” the report notes. Take solar power paired with energy storage systems (ESS): Their prices have hit all-time lows. In a recent auction, developers bid tariffs as low as 2.7 to 2.76 rupees per kilowatt-hour (kWh). Under these deals, they’ll supply power for two hours during evening peaks, store energy for two hours in the morning, and deliver standard solar output during daylight hours.
Sure, these rock-bottom rates have some worried about developer profits. But the report points out perks like lower infrastructure costs, easier land deals, and free power earnings during peak morning hours should help them hit solid returns anyway.
Looking ahead, the renewable energy sector in India might see fewer new auctions as authorities focus on sorting out old ones. Over the past two years, the country has held auctions for more than 90 GW of capacity, but many lack signed power purchase agreements (PPAs). This uncertainty is shaking investor confidence and clouding the value of those initial award letters.
India has already scrapped 11.4 GW worth of tenders due to weak bids or sky-high prices—moves that could clear the deck for canceling more outdated ones and rebuilding trust.
On the demand side, India’s overall power needs remain soft for now, with just a 3% year-on-year bump in September. But the HSBC report highlights a bright spot: This month’s demand already tops September 2023 levels, when growth hit 11.5%.
With forecasts for a harsh winter, milder weather patterns shifting, and factories ramping up, power demand could surge starting late October or early November, the report predicts. That boost would give renewable energy developers in India even more momentum to meet the growing appetite for clean, reliable electricity.
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