New Delhi: In October, India reached an important milestone in its green energy ambitions: an installed renewable energy capacity of 203.18 GW.
With that, India crossed the 200 GW mark, achieving more than 40% of its targetted 500 GW of non-fossil power generation capacity and net zero carbon emissions by 2070. In the 12 months to October, the country installed 24.2 GW of renewable energy capacity.
“2024 has been a good year from an energy transition perspective for India, with the government and industry working in tandem,” said Ashwin Jacob, partner and energy, resources and industrial industry leader, at Deloitte India. “Key highlights include solar capacity growth of 30% over 2023, (and) increased policy and budget allocations to drive grid-connected solar plants and kick-start rooftop solar.”
Among those policy initiatives was the launch of the PM Surya Ghar: Muft Bijli Yojana, a renewed rooftop solar scheme to encourage the installation of solar panels on the roofs of 10 million households across the country.
The Union cabinet approved the PM Surya Ghar scheme on 29 February, with an outlay of ₹75,021 crore for implementation through 2026-27. According to data from the ministry of new and renewable energy, 685,763 rooftop solar power installations have been completed so far.
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The Union government has announced several other measures to boost energy transition, including the much-awaited viability gap funding for offshore wind energy projects, which the Union cabinet approved in June with a total outlay of ₹7,453 crore. Tenders have already been rolled out for offshore wind projects, both with and without VGF support.
The renewable energy sector attracts over $25 billion in annual investments, said Srivatsan Iyer, global chief executive of Hero Future Energies, a part of the Hero Group.
“The commercial and industrial segment is rapidly expanding with more businesses integrating renewable energy into their operations to meet sustainability commitments and reduce energy costs. This growth is reflected in the increasing adoption of corporate power purchase agreements (PPAs), which are expected to surpass 8 GW annually by 2025,” Iyer said.
However, the signing of PPAs for utility-scale projects has not been as robust as required. The parliamentary committee on estimates, in its latest report, stressed upon the ministry of new and renewable energy to come up with a single-window system and develop standardized PPA templates to set definite timelines for all required approvals.
In September, Mint reported that about 30 GW of solar power projects are yet to take off due to delays in signing power purchase agreements and power supply agreements.
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Green IPOs and nuclear energy
India’s green energy sector is leading a shift in the economy, said Manoj Bansal, partner at Grant Thornton Bharat, adding that emerging areas like green hydrogen, energy storage, and carbon capture are attracting significant investments.
“Favourable policies, international commitments, and decarbonization efforts strengthen this momentum. The outlook is promising, with public and private investments expected to surge,” Bansal said. “Sectors like electric mobility and bio-energy are set to play a crucial role in sustainable growth.”
The significance of green energy in the economy can be gauged from the initial public offerings of green power companies that hit the market this year, including ACME Solar Holdings Ltd, Waaree Energies Ltd and state-owned NTPC Green Energy Ltd (NGEL).
Other state-run energy companies or their green energy arms, including Solar Energy Corporation of India, SJVN Green Energy Ltd, and NLC India Renewables Ltd (NLCIRL), are also planning to go public shortly.
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Nuclear power has been another key area of focus this year.
The Union government announced a ₹1 trillion funding commitment for research and development in this space in its interim budget in February. In July, presenting her full budget for FY25, Union finance minister Nirmala Sitharaman said that in addition to supporting R&D for small modular reactors, the government would partner with the private sector to develop SMRs, paving the way for private entities to enter the strategic nuclear power space.
Several companies, including state-run Nuclear Power Corporation of India Ltd (NPCIL), NTPC and Tata Power Ltd, are looking to expand their footprint in the nuclear power space.
Of the government’s total target of 500 GW of non-fossil energy capacity by 2030, 20 GW is expected to come from nuclear sources. Currently, India nuclear power generation capacity stands at 7.48 GW.
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Green hydrogen and recycling batteries
“Energy transition is a global megatrend and India will see significant investments in the sector. Given the early successes that the country has witnessed in the space, the political will, and with large parts of the value chain already established, the sector will see an investment of over $300 billion in the next 8-10 years,” said Srishti Ahuja, investment banking partner (infra), EY India. “We will see momentum building further in areas like electric mobility, battery storage, green ammonia and biofuels.”
Earlier this year, the government awarded tenders under the ₹17,490-crore Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme to boost production of green hydrogen and electrolyzers in India.
Although the green hydrogen space is yet to take off in the country several companies including Sembcorp Industries Ltd, ReNew Power and Avaada Group have signed offtake agreements for green ammonia, a derivative of green hydrogen.
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Battery energy storage is another space that has scaled up this year amid falling battery prices globally and the growing need to store renewable power.
“Most of the solar tenders came up with energy storage as an option in India,” pointed out Debi Prasad Dash, president of the India Energy Storage Alliance (IESA). “Most solar tenders began incorporating energy storage as an option, leading to over 16 gigawatt-hours of hybrid tenders at competitive prices below ₹2-3.”
India’s cumulative battery energy storage potential will be 240 gigawatt-hours by 2032, he added. “We believe that over the next seven years, India will become a market leader in this sector, alongside the US, Australia, Europe, and China.”
With the growing demand for batteries, another space gaining traction is battery recycling.
India’s current demand for 15 gigawatt-hour lithium-ion batteries is met entirely through imports, said Manikumar Uppala, co-founder of Metastable Materials, a battery recycling company. India will need to increase its recycling capacity multiple times to recycle batteries, he said, adding that this, however, presents both a huge opportunity and a challenge.
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