Renewable Energy January 2021 For updated information, please visit www.ibef.org Table of Contents Executive Summary 3 Advantage India 4 Market Overview and Trends 6 Strategies Adopted 12 Growth Drivers 14 Opportunities 20 Key Industry Contacts 24 Appendix 26 2 Executive summary Immense growth Ambitious targets • In 2018, the Government of India potential has set an ambitious target of • India has low conventional energy achieving 227 GW of renewable resources compared to its required energy capacity by 2022 and 275 energy needs driven by huge population GW by 2027. These include adding and rapidly increasing economy. But 114 GW of solar capacity, 67 GW of India can harness the huge potential of wind power and 31 GW of floating solar energy as it receives sunshine solar and offshore wind capacity by most of the year. It also has vast 2022. potential in hydro power sector which is • Government plans to establish being explored across states in the renewable energy capacity of 500 northeast. GW by 2030. • As of November 2020, India had 90.39 GW of renewable energy capacity, including 36.91 GW from solar and Increasing 38.43 GW from wind power. • India is the only country, among the investment G20 countries, which is on track to achieve its targets under the Paris • The renewable energy space in Agreement. India has become highly attractive • India plans to add 30 GW of renewable for investors and received FDI energy capacity along the desert on its inflows of US$ 9.68 billion between western borders of Gujarat and April 2000 and September 2020. Rajasthan. • More than US$ 42 billion has been invested in India’s renewable energy sector since 2014. • India ranked seventh on the EY Renewable Energy Country Attractive Index 2020. Source: EY Recai (November 2018) , Central Electricity Authority, MNRE, DPIIT, Livemint, IWTMA 3 Advantage India 4 Advantage India 1 Robust Demand 4 Increasing Investment ► Indias ha a relatively low per ► Non -conventional energy capita energy and electricity received FDI inflows of US$ 9.68 consumption. Per capita billion between April 2000 and electricity consumption in India September 2020. reached 1,181 units in 2018-19. ► With Government’s ambitious green energy targets, the sector ► As the economy grows, the has become quite attractive for electricity consumption is both foreign and domestic projected to reach 15,280 TWh in 1 4 investors. 2,040 from the 4,926 TWh in ► By 2028, India can see 2012. Most of the demand will investment worth US$ 500 billion come from real estate and in renewable energy. transport sectors. ADVANTAGE INDIA 2 Competitive Advantage 2 3 3 Policy Support ► Indias wa ranked fifth in wind power, ► The Indian Government aims to fifth in solar power and fourth in achieve 227 GW of renewable renewable power installed capacity, energy by 2022. as of 2019. ► Government plans to establish ► India ranked seventh on the EY renewable energy capacity of Renewable Energy Country 500 GW by 2030. Attractive Index 2020. ► PLI -scheme worth Rs. 4,500 ► Power generation from solar and crore (US$ 610.23 million) for wind projects are likely to be cost- high-efficiency solar PV modules competitive relative to thermal manufacturing over a five-year power generation in India in 2025- period. 2030. Note: TWh - Terawatt Hour, PLI - Production-Linked Incentive Source: Central Electricity Authority, Ministry of New and Renewable Energy, Mercom India, EY, News sources, BloombergNEF 5 Market Overview and Trends MARKET OVERVIEW 6 Renewable Energy Sources Renewable Energy Sources (RES) Other forms of Hydro Energy renewable energy Small Hydro Power Wind Power Bio-Power Solar Power (Projects ≤ 25 MW) Urban & Industrial Biomass Power Waste Power Source: Central Electricity Authority (CEA) 7 Generation capacity has increased at a healthy pace… (1/2) Installed Renewable Energy1 Capacity2 (GW) Installed Renewable1 Capacity2 Breakup – November 2020 100 CAGR 17.33% 90 Wind Power 90.4 80 87.0 5% 70 77.6 11% Solar Power 60 69.0 50 57.2 43% 40 45.9 Bio-Power 30 20 41% 10 Small Hydro 0 FY16 FY17 FY18 FY19 FY20 FY21* . The International Energy Agency’s World Energy Outlook projects a growth of renewable energy supply to 4,550 GW in 2040 on a global basis. Installed renewable power generation capacity has increased at a fast pace over the past few years, posting a CAGR of 17.33% between FY16- FY20. India had 87 GW renewable energy capacity in FY20. As of November 30, 2020, installed renewable energy capacity stood at 90.39 GW, of which solar and wind comprised 36.91 GW and 38.43 GW, respectively. Biomass and small hydro power constituted 10.14 GW and 4.74 GW, respectively. According to the year-end review (2020) by the Ministry of New and Renewable Energy, another 49.59 GW of renewable energy capacity is under installation and an additional 27.41 GW of capacity has been tendered. This puts the total capacity of renewable energy projects (already commissioned or in the pipeline) at ~167 GW. Notes: GW- Gigawatt, 1Large Hydro power projects not included as they are not included in renewable energy targets of GOI, 2grid interactive capacity, *- Until November 2020 Source: Central Electricity Authority (CEA), International Renewable Energy Agency (IRENA), MNRE 8 Generation capacity has increased at a healthy pace…(2/2) . Power generation from renewable energy sources (excluding large Electricity Generation from RES* (billion units) hydro) in India reached record 127.01 billion units in FY20. The country ranks fifth worldwide in terms of the total installed wind power capacity. 140 . The Government of India is aiming to achieve 227 GW of renewable energy capacity by 2022, much ahead of its target 175 GW as per the Paris Agreement. 120 . Government plans to establish renewable energy capacity of 500 127.01 126.76 GW by 2030. 100 . Solar installation in India is expected to increase 360% by 2020. Off -grid renewable power capacity has also increased. 101.84 80 . In 2019, India installed 7.3 GW of solar power across the country, 81.51 establishing its position as the third-largest solar market in the world. 60 65.78 40 20 0 FY16 FY17 FY18 FY19 FY20 Note: RES - Renewable Energy Source, *Large Hydro power projects not included, SPV - Solar Photovoltaic System, MWeq - Megawatt Equivalent Source: CEA, Make in India, MNRE, Mercom India 9 Solar power generation growth likely to outweigh other sources by 2022 . Dues to it favourable location in the solar belt (400 S to 400 N), India is one of the best recipients Top 10 state-wise solar installations in of solar energy with abundant availability. India (November 2020) . Growth in solar power installed capacity is expected to surpass the installed capacity of wind State Capacity (MW) power, reaching 114 GW by 2022. A total of 38 solar parks, with >25 GW of combined capacity, were approved in India until September 2020. Karnataka 7,315.87 . India stands 5th among countries with a maximum installed capacity of solar rooftop installations. Maharashtra, Tamil Nadu and Gujarat account for more than two-thirds of the solar rooftop installations in India and have an installed capacity of ~217 MW as of March 2020. Rajasthan 5,383.68 . The biggest solar project financed in India is the 709 MW NLC Tangedco PV plant - which is coming up at a cost of about US$ 500 million. Tamil Nadu 4,258.63 . Adani Group aims to become the world’s largest solar power company by 2025 and the biggest renewable energy firm by 2030. Telangana 3,932.90 . In June 2020, Adani Green Energy won a major tender to set up 8 GW of manufacturing-linked solar energy project with an investment of Rs. 45,000 crore (US$ 6.38 billion). Andhra Pradesh 3,744.13 . In November 2020, SunSource Energy announced that it will develop a 4 MW grid-connected floating solar PV power project, along with a 2 MW Battery Energy Storage System in Andaman Gujarat 3,638.21 and Nicobar Islands, which was won in a tender bid with the Solar Energy Corporation of India. In November 2020, Ladakh got the largest solar power project set-up under the central Madhya Pradesh 2,438.43 government’s 'Make In India' initiative at Leh Indian Air Force Station with a capacity of 1.5 MW. In December 2020, the solar power tariff dropped to an all-time low of Rs. 1.99 per unit in an Maharashtra 1,894.74 auction of projects of 500 MW capacity by the Gujarat Urja Vikas Nigam Ltd. (GUVNL). The world's largest floating 600 MW solar energy project will be constructed at the Omkareshwar Uttar Pradesh 1,216.60 Dam in the Khandwa district of Madhya Pradesh at the estimated cost of Rs. 3,000 crore. The project is expected to begin power generation by FY23. Punjab 947.10 Source: CEA, Make in India, India Solar Handbook 2017, MNRE, Mercom India, Bloomberg NEF, Solar Energy Corporation of India, News Article 10 Growth in hydro power . India has overtaken Japan, becoming the nation with the fifth-largest Installed Hydro Capacity hydropower production capacity in the world with a total installed base at over 50 GW, and is only behind Canada, US, Brazil and China according to International Hydropower Association (IHA). 50.0 . India has the hydro power potential of around 145 GW, of which 45 GW is 45.0 already been utilised. 45.3 45.4 45.7 . Hydro power projects in India are classified into conventional hydro 40.0 projects and small hydro electric projects. Small hydel projects are included in the Government’s renewable energy sources (RES) targets.