ICRA Limited forecasts India’s combined renewable energy capacity to expand to 250 GW by March 2026
It attributes the basis of this projection to over 80 GW of large project pipeline
Favorable solar PV cell and module prices will also contribute to this increase
Nevertheless, land acquisition and transmission connectivity may lead to delays
Spurred by a large renewable energy project pipeline of more than 80 GW and favorable solar PV cell and module prices, India’s renewable energy capacity addition will improve to a combined 250 GW by March 2026, says credit rating agency ICRA Limited.
At the end of September 2024, the country’s cumulative renewable energy capacity totaled 201 GW, says ICRA. Recently, the Central Electricity Authority (CEA) reported the renewable energy cumulative capacity to have reached 203.18 GW as of October 2024, having gone up by 15% year-on-year (YoY). Solar PV’s share was 92.12 GW (see India’s Cumulative Solar PV Capacity Exceeds 92 GW).
According to ICRA, renewable energy capacity addition in India is likely to increase from 19 GW in FY 2024 to exceed 26 GW in FY 2025, further scaling up to 32 GW in FY 2026 with the solar power segment driving the speed. This increase will also be due to the waiver on Inter-State Transmission System (ISTS) charges coming to an end in June 2025.
ICRA’s Senior Vice President & Co-Group Head—Corporate Ratings, Girish Kumar Kadam, sees both rooftop and commercial and industrial (C&I) segments as contributing to this growth apart from the utility segment.
“Nevertheless, challenges remain on the execution front with respect to delays in land acquisition and transmission connectivity, which, if sustained, could hamper the sector’s prospects,” points out Kadam.
Over the next 5 years, ICRA forecasts the share of renewable energy plus large hydro in the country’s electricity generation to improve from 21% in FY2024 to over 35% in FY2030. This will require 50 GW of energy storage capacity by 2030 by its estimation to be met by a mix of battery energy storage systems (BESS) and pumped storage hydro projects (PSP).
Along with storage, the growing share of round-the-clock (RTC) and firm and dispatchable supply (FDRE) renewable energy projects will also provide flexibility and deal with intermittency risks.
The country’s central nodal agencies and the railways have completed auctions for close to 14 GW of RTC/FDRE projects for competitive tariffs in the range of INR 4.0 to INR 5.0 ($0.047 to $0.059)/unit against more than INR 6.0 ($0.071)/unit for coal-based projects, as determined in recent medium-term bids.