Renewable energy sector in India to fall short of capacity targets for 2022

06 June 2018

According to a new report from renewable energy consultancy Bridge to India, the wind and solar energy sectors in India are unlikely to meet the capacity targets set for them by the government by 2022. Solar power is expected to meet just short of 70% of its target and wind energy will fall just short of 90%.

In line with the global effort to transition to clean energy – particularly since the Paris Agreement – the Indian government has set highly ambitious targets for its renewable energy sector in recent years. With respect to solar energy, in particular, the country has made significant progress, having achieved its initial target (20 gigawatts) for 2022 by as early as March this year.

As a result, the government re-established its goals for March 2022, setting its solar power target at a highly ambitious 100 GW, combined with a wind energy target of 60 GW and a biomass and small hydro target of 15 GW.

Efforts towards achieving the goal have been supported by the business environment in India, which includes major corporations such as Hero Future Energies, Aditya Birla Group, Sembcorp, Trina Solar, Scheider Electric and a number of others. Advisory firms such as Accenture, Deloitte, and BCG also ramped up their energy expertise after the new targets were set, hoping to capitalise on the anticipated demand for project support.

Total expected capacity addition by March 2022

However, according to a new report from consulting firm Bridge to India, the new targets are perhaps a bit too ambitious, in light of India’s budget and infrastructure constraints. Established in 2008, Bridge to India is a strategy advisory firm, with the specific objective of helping incorporate the international best practices in clean energy into business operations.

As per the firm’s analysis – which is based off responses from a roughly equal mix of Indian and international executives – India is likely to fall just short of the targets for both the wind and the solar energy segments. In terms of solar energy, most executives expect India to achieve a total capacity of 66 GW by March 2022, which is 66% of its 100 GW target.

One factor that is anticipated to act as a barrier to the development of the overall solar power capacity is the poor performance of the rooftop solar power generation segment. Rooftop solar plants often require large and costly storage units, which are difficult to install due to a lack of knowhow alongside other regulatory barriers.

Renewable energy industry outlook India

As a result, rooftop units are expected to add only 10 GW in capacity by 2022, significantly short of the 40 GW that is expected of the segment and representing a 25% achievement of the target. In terms of wind energy capacity, most executives expect an addition of 52 GW, which represents and 87% achievement of the 60 GW target for 2022.

Nevertheless, given the fact that the targets have been revised upwards, and that the government is demonstrating intent to develop the renewable energy sector, most executives in the sector are positive about its outlook. Of the executives surveyed, 52% said that they were optimistic, 15% said they were very optimistic, and 3% stated that they were extremely optimistic.

Commenting on the findings, Vinay Rustagi, Managing Director at Bridge to India said, “While there are challenges, the government seems to be committed to the sector and moving rapidly to find solutions. The tender pipeline has been very active and the M&A activity has also been robust. That is why people feel that there is business growth and there is an opportunity for them to create value.“


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KPMG organises TV panel discussion on the EV scenario in India

05 February 2019

Global professional services firm KPMG is playing its part in the debate around electric vehicles (EV) currently prevalent in the Indian market. The consulting firm has collaborated with CNBC TV18 to organise a panel discussion on the topic, titled ‘Energy in new age mobility.’

Ahead of the budget speech due in a few weeks, a number of government targets are being examined in terms of the progress being made therein. The electrification of India’s private transport sector is high on the list of these targets, given the government’s ambitious goal of achieving 100% electrification by 2030.

Experts have anticipated substantial tax cuts on the import of un-assembled EVs in the budget in order to accelerate progress towards these goals, while simultaneously boosting the ‘Make in India’ goals. Nevertheless, the actual level of electrification by 2030 is anticipated to reach between 30% and 40%.

Big Four accounting and advisory firm KPMG has organised a TV panel discussion to raise awareness around the varying opinions on the issue amongst the various stakeholders involved. The discussion was organised in collaboration with CNBC TV18, and covered various aspects including infrastructure for EVs and the costs of batteries and other implements.

KPMG organises TV panel discussion on the EV scenario in India

KPMG has previously offered its insights on the issue, placing the lack of adequate infrastructure and the costs of manufacturing as the most prominent barriers to electrification. Participants in the discussion saw greater investment as the best solution to this scenario.

Managing Director of Hero Eco Naveen Munjal said, “The whole supply chain in India has to be created and that goes right from the chargers, the batteries, etc., Everything has to be created. You have to invest and the market will follow. The battery prices are slated to come down to where we are in next 10 years.”

Representation for the government came in the form of advisor to the NITI Aayog Anil Srivastava, who indicated that the organisation had elaborate designs in place to develop the necessary infrastructure and predicted that the country would be manufacturing as many as 35 million EVs by 2030.

Partner & Lead of KPMG India’s Alternate Energies Practice Santosh Kamath said, “We need to address two things, first is the range anxiety problems, which means charging infrastructure. Second is to create a bit more of consumer awareness and we need to think of a non-fiscal incentives also, green number plates, ease of registration, and so on.”