Wind and solar power tariffs either reaching a comparable level with domestic coal-based generation or even going lower is contributing to the rising share of renewables in the country, according to Moody’s Investors Service new report, ‘Infrastructure and Project Finance-India: Transition to low-carbon energy mix is work in progress’.
- Moody’s Investors Service in a new report on India called ‘Infrastructure and Project Finance-India: Transition to low-carbon energy mix is work in progress’ says India is taking positive steps to align its power generation mix with NDC submitted under Paris Climate Agreement
- Renewable energy share in the country’s electricity mix is likely to increase to around 18% in 2022, from the current 7.8%, as share of fossil-fuel based generation drops
- Large companies are also gearing towards more energy-efficiency operations and source more renewable energy, which will help the growth of renewables here
- The administration needs to be mindful of the challenges going ahead, that include weak off-taker credit quality and a regulatory environment that is still developing; it also points out at the need to improve transmission infrastructure for efficient evacuation of the expanding renewable energy share in the national grid
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India is taking positive steps to align its power generation mix with its National Determined Contribution (NDC) pledged under the Paris Climate Agreement, according to credit ratings agency Moody’s Investors Service. In its report ‘Infrastructure and Project Finance-India: Transition to low-carbon energy mix is work in progress’, the agency says that the country has had the largest share of new renewable energy capacity additions for power generation in the last two years, at around 60%. This it compares to coal-fired generation capacity that has slowed down sharply.
By 2022, when India aims to have 175 GW of installed renewable energy capacity with 100 GW coming from solar, renewable energy’s share in the total energy mix is expected to be around 18%, increasing from 7.8% at the end of March 2018. Fossil-fuel based power generation capacity will witness a fall to 50% to 55% from the current 67%. Partly, it will be due to wind and solar power tariffs either achieving parity or being lower than domestic coal-based generation, said Moody’s Vice President and Senior Analyst, Abhishek Tyagi.
Large companies like NTPC Limited and Tata Power Company Limited have announced plans to make their operations more energy-efficient and source more renewable energy, pointed out Tyagi. Through its corporate plan for 2032, NTPC is targeting 32 GW of installed renewable energy capacity (see NTPC Aims At 32 GW Renewables Capacity).
But he also said that the sector faces challenges, some of which include weak off-taker credit quality and a regulatory environment that is still developing. The report also talks about the need for the country to focus on improving its transmission infrastructure for efficiency evacuation and inter-regional transmission of electricity, in the light of expanding share of renewables.
The report is available to subscribers on Moody’s website.