India’s renewable energy (RE) capacity addition is expected to improve to 10.5 gigawatt (GW) to 11 GW in financial year 2021-22 (FY22) led by a strong project pipeline of about 38 GW, according to ratings agency ICRA.
It added that apart from this, over 20 GW RE projects were under the tendering phase from various nodal agencies, providing visibility for capacity addition over the medium-term.
“The RE sector is expected to witness investments of Rs 3.5 trillion over the next four years, increasing the share of RE capacity to 34 per cent of the overall installed capacity by March 2025 from 25 per cent as of March 2021 led by the solar power segment,” said Girishkumar Kadam, senior vice-president and co-group head – corporate ratings, ICRA.
He, however, added that the delays in signing of PPAs and PSAs and cancellation of bids remained a key challenge.
“Given the expected rise in solar bid tariffs in the upcoming auctions amid the rise in module prices and imposition of basic customs duty from April 2022, progress is expected in signing of PPAs and PSAs for the earlier awarded tenders by the central intermediate procurers,” said Kadam.
There was a slowdown in RE capacity addition to 7.4 GW in FY21 from 8.7 GW in FY20 amid the execution headwinds due to Covid-19.