India might achieve only about 76% of the target 175 GW (GigaWatts) of renewable power generation capacity by 2022 as it faces several challenges, according to a report by an energy consultancy agency.
Earlier this year, the Ministry of Renewable Energy announced its target to install 175 GW of renewable energy capacity by the year 2022. This target includes 100 GW from solar power, 60 GW from wind power, 10 GW from bio-power and 5 GW from small hydro-power.
Even with significant cost declines, the consultancy firm expects only about 76% of the target to be met by 2022 and would still consider this to be an achievement.
In an official press statement, the Ministry announced a short-term offshore wind energy target of 5GW by 2022 and a medium-term target of 30W by 2030. Increasing electricity consumption and surging awareness towards the environment are together helping the country towards optimal utilisation of green energy resources, specifically solar energy.
Although the power segment in India is undergoing radical change on account of the government’s move towards power generation through renewable energy resources, there is still a lot of progress to be made.
However, the Government is still committed to and will work towards achieving the renewable energy target. The Government has been quick to address several industry setbacks and to reduce project risks, therefore, renewable prices remain competitive.
The consultancy firm said that combined wind and solar capacity have almost doubled from 2014 levels to 61 GW this year. It expects non-hydro renewables to make up 13% of power generation by 2023.
Over the next few years, capital costs are expected to decline by 23% for wind energy and 31% for solar energy. This trend will only continue as new emerging technologies replace old ones.
The report said that improving grid flexibility through storage and flexible power generation will be extremely crucial to achieve high levels of renewable penetration. It added that economic competitiveness, technological maturity, and financially healthy off-takers will provide a solid base for renewable capacity growth to cater to electricity demand growth.
A solar analyst at the agency noted that by 2040, India is expected to increase its renewable capacity by around seven times to 384 GW. This share will be driven by several sub-segments, which include offshore wind, hybrid projects, floating solar, and distributed solar. The 384 GW of non-hydro renewables will contribute 20% of generation share by 2040.
Coal energy is a key energy resource. Over the next few months, India’s spot market prices, for both coal and power, are expected to remain steady as continuous industrial production growth is pushing demand, while supply remains tight.
The firm’s principal coal analyst said that growth in domestic coal production and dispatches can only partially meet the growing demand for coal that has led to an increase in import dependency.