The share of renewables in India’s energy mix dipped to 10.7 % in the second quarter of the current fiscal year from 11.4% in the same period a year ago, according to the Council for Energy Environment and Water’s quarterly handbook Centre for Energy Finance.
The outcome is surprising as the share of renewable energy in most countries have been growing, especially after the outbreak of the pandemic. However, an unseasonable and sharp reduction in wind speeds in resource-rich states (Gujarat, Rajasthan, and Tamil Nadu), led to a 41% reduction in wind generation in July year-on-year.
Typically, the second quarter records the highest wind energy generation every year.
The report also highlighted that 3.2 Gigawatts of renewables were auctioned in the second quarter (excluding 8 GW sanctioned as part of a manufacturing-linked upsizing of a solar auction from an earlier quarter) as compared to 4.4 GW a year ago.
Further, auctions for vanilla renewable energy projects gave way to auctions for blended generation mixes in the last quarter.Auctioning blended solar and wind projects is aimed at improving the transmission infrastructure utilisation with higher capacity utilisation.
During the period, market concentration or the share of top five developers in the total project capacity sanctioned, increased to 84 % compared to 81% in the previous quarter. Their share is expected to remain high going forward.
Total renewable energy capacity additions slowed down in the second quarter, partly owing to supply chain disruptions due to COVID-19, which impacted grid-scale capacity additions.
In contrast, rooftop solar picked up with 399 Megawatts capacity addition in the second quarter compared with 188 Megawatts in the same period a year ago. Gujarat, Rajasthan, and Tamil Nadu led the growth in rooftop solar installations.
Coal capacity addition subdued
Meanwhile, coal capacity addition remained subdued with net addition of 550 MW during the quarter, which is approximately a third of renewable energy additions.
“Among renewables, grid-scale and rooftop solar continued to dominate capacity additions in the quarter, accounting for a nearly 60 per cent share. A five-month extension granted by the Ministry of New and Renewable Energy for grid-scale project commissioning could result in a noticeable uptick in renewable energy capacity additions as the lockdown eases further,” said Nikhil Sharma, associate at the CEEW Centre for Energy Finance (CEEW-CEF).
Meanwhile, electricity prices rose following a demand recovery as a nationwide lockdown was eased. The short-term electricity prices (in both day-ahead and real-time spot markets) saw an increase to 2.53 rupees/kilowatt hour (kWH)and 2.42 rupees/kilowatt hour in the second quarter from 2.35 rupees/kWh and 2.22 rupees/kWh in the first quarter respectively.
However, the state of financial health of power distribution companies remained a worry. They owed 1.4 trillion rupees in overdues to power producers as of September, representing an increase of 50 % compared to September last year.
However, the pace of increase in overdues has dropped significantly, increasing only 5 %per cent over the quarter, compared to a 30% spike during the first quarter.
A special financial package announced by the government under the Aatma Nirbhar Bharat Abhiyaan (Self-Reliant India) could help discoms in clearing their dues to power producers, the report said.