India’s Renewable Energy Rise

India’s renewable energy sector has witnessed exponential growth and strategic transformation, making it globally competitive and investment-attractive.

Renewable Energy Expansion and India's Energy Transition Goals

1. Introduction: India’s Green Energy Push

• India has set ambitious renewable energy targets, aiming for 500 GW of non-fossil fuel capacity by 2030.
• The renewable energy sector, especially solar, has witnessed exponential growth in the last decade.

2. Transformation of the Renewable Sector

• Cost Decline and Tariff Competitiveness
  • Solar tariffs dropped from ?10-18/unit (2010) to under ?2.5/unit by 2019.
  • Improved economies of scale, competitive bidding, and foreign investments contributed.
• Investor Confidence and FDI Inflows
  • From $2.1 billion (2008) to over $12 billion (2022).
  • Clean energy projects now attract global funds similar to IPL franchise-level valuations.
• Role of Government Reforms
  • Solar parks, transparent bidding processes, and policy clarity enabled market creation.
  • Shift from subsidy-based incentives to market-driven models.

3. Structural Achievements & Policy Milestones

• Institutional Support and Policy Measures
  • National Solar Mission (2010), Ujjwala, and Saubhagya schemes promoted electricity access and clean energy.
  • Renewable Energy Investment Promotion Board and Viability Gap Funding.
• Market Instruments and New Models
  • Renewable Energy Certificates (RECs), Green Energy Open Access Rules.
  • Public-private partnerships, hybrid energy parks, and grid-scale battery storage promoted.

4. Challenges and Emerging Issues

• Grid Integration and Transmission Bottlenecks
  • Interstate transmission constraints lead to curtailment of RE.
  • Need for green corridors and storage solutions.
• Policy Uncertainty and Financial Health of DISCOMs
  • Delayed payments, Power Purchase Agreement (PPA) renegotiations discourage private players.
  • DISCOM financial restructuring is vital.
• Land Acquisition and Environmental Clearance
  • Solar and wind parks often face delays due to land and forest clearances.

Way forward:

• Institutional Reforms: Establish robust dispute resolution and payment mechanisms for private investors.
• Financial Instruments: Promote green bonds, blended finance, and sovereign guarantees.
• Decentralised RE Models: Push for rooftop solar, peer-to-peer trading, and rural microgrids.
• Skilling and R&D: Invest in solar-wind hybrid tech, storage solutions, and hydrogen R&D.
• Global Collaboration: Leverage International Solar Alliance (ISA) and partnerships for tech and finance.