India sets ambitious yearly targets for central PSUs to reach 500GW green power capacity

India has set an ambitious target of having 500 GW of renewable energy capacity by 2030, for which the government will award 50 GW of renewable energy projects every year starting FY 2024.

Chasing an ambitious target of having 500 gigawatts (GW) of renewable energy (RE) capacity by 2030, the government has released a detailed agency-wise break-up on inviting bids for RE projects totalling 50 GW for 2023-24.

India's current total renewable energy capacity, excluding large hydro and nuclear plants, reached 125 GW (125,159.81 MW) in March 2023, the latest monthly report by the Central Electricity Authority (CEA) showed. At present, RE has a share of 26.53 percent of the total installed generation capacity in the country.

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As per the latest trajectory released by the Ministry of New and Renewable Energy (MNRE) on April 25, tenders will be floated for 15 GW each in the current quarter (Q1 - April-June 2023) and the second quarter of FY 2024 (July-September 2023). In the third (October-December 2023) and fourth quarter (January-March 2024), bids would be invited for 10 GW each.

The MNRE has appointed NTPC Ltd, Solar Energy Corporation Of India (SECI) Ltd., NHPC Ltd and SJVN Ltd as the renewable energy implementing agencies (REIAs) for floating the tenders and opening of bids. As per the trajectory, SECI and NTPC will have to invite bids for 15 GW each of RE projects, while NHPC and SJVN will have to do 10 GW each in the ongoing financial year.

The REIAs would be permitted to bring out the bids with or without storage for solar, wind, solar-wind hybrid, round-the-clock (RTC) RE power and so on.

On April 3, Moneycontrol reported about the government's plan to add 50 GW each year till 2030. “Bids for RE capacity of 50 GW per annum, with at least 10 GW per annum of wind energy capacity, are to be issued each year from financial Year (FY) 2023-24 to FY 2027-28,” according to the memorandum issued by the MNRE on March 31.

Union minister for power and renewable energy, RK Singh, said, "We are committed to achieve the target 500 GW by 2030 and the bidding trajectory will provide a further stimulus towards this. The structured bidding trajectory will provide sufficient time to the RE developers to plan their finances, develop their business plans and manage the supply chain more efficiently. This is a golden opportunity of industry to invest in this sector,” he said on April 5 while formally announcing the 50 GW per year trajectory.

BS Bhalla, secretary, MNRE said the bidding trajectory will also enable the power procurers, including the distribution companies, to manage their RE procurement plans effectively. “The bid trajectory will also provide a fillip to the RE manufacturing industry in the country by indicating the demand that would be created for their equipment,” he said.

The decision of the government to add 50 GW of RE capacity each year from hereon is significant as well as challenging because until now, the country has managed to add only a maximum of about 15 GW annually.

As of now, nearly 82.62 GW  is under implementation and 40.89 GW under tendering process, as per government data. MNRE officials told Moneycontrol that the bids for these RE capacity additions will be over and above the RE capacities that are coming up under the government's rooftop solar and PM-KUSUM schemes.

India's electricity demand is growing at 6 percent annually. However, if we only look at last year, the demand increased by almost 10 per cent, as per government data.

Union Finance Minister Nirmala Sitharaman on February 1 said “green growth” will be one of the seven priority sectors (“Saptarishi”) of the Union Budget 2023. In her Budget speech, she explained that the “green growth” priority sector will include multiple programmes on green fuel, green energy, green farming, green mobility, green buildings and green equipment. This will also include policies for efficient use of energy across various sectors, Sitharaman said in her Budget speech this year.