Prime Minister Narendra Modi is on a visit to the US where he will also interact with CEOs of leading energy companies. Narendra Modi aims at enhancing India-US energy partnership with this meet. He added that energy has emerged as a new area of mutually beneficial cooperation and is fast becoming an important facet of the bilateral relationship. As the Modi-led government has set an ambitious target to have 175 GW of renewable energy capacity by 2022, including 100 GW solar and 60 GW of wind energy, India still uses thermal sources such as coal, lignite, and diesel to meet 63 per cent of its total energy requirements.
On the other side, the total installed capacity of solar power has not even reached half of the government's target. The total solar installed capacity in India was 30 GW, as in August 2019, according to the Central Electricity Authority. Similarly, the installed capacity of wind power was 36.6 GW and hydro was 45.4 GW. Altogether, the installed capacity of clean energy in India is around 132 MW, where hydropower forms the largest portion.
What's holding back India to aggressively move to clean energy?
Steep fall in renewable energy tariffs in India has added pressure on margins of Solar and Wind developers. This coupled with the delay in payments by distribution companies to them has worsened the situation of renewable energy developers in India. "Payments with many distribution companies is pending not for 3 to 4 months but for more than 9 months in some cases. This has resulted in the loss of confidence of financial institution for Indian Solar and Wind Projects Financing," said Sushil Sarawgi, Director, Kor Energy India Pvt Ltd. He added that the target to achieve 100GW by 2022 doesn’t seem realistic until the current bottlenecks in the policy at both Central and State levels are addressed. At the national level, the implementation of Safeguard duty has not done much good for the industry and the implementation of CAPEX subsidies schemes need to be improved.