India may miss its renewable energy target of 175 GW by end 2022: BloombergNEF

With the pandemic halting work and initiatives hitting logistics snags, India may miss its goal of accelerating renewable power capability to 175 gigawatts (GW) by the end of 2022. Solar and wind alone account for 160 GW and the nation may fall 36 per cent short of that figure, estimates BloombergNEF (New Energy Finance).

The potentially disappointing numbers offer insights into problems facing India on its journey to decarbonization. Domestic power suppliers, which control nearly 90 percent of electricity transactions, are struggling to stem losses and shrink a pile of debt. That crimps their ability to buy enough power to service customers, resulting in delayed payments to power producers and stifling growth across the industry.

Financial distress in state retailers is a major problem why this year’s target seems out of reach. Many projects auctioned by the government have struggled to find buyers. About a quarter of wind projects awarded in auctions so far have failed to take off due to problems related to distribution utilities, according to BloombergNEF.

India is seeking to revamp its fossil fuels-driven economy by expanding renewable energy and embracing new technologies like green hydrogen and green ammonia. Some parts of the country have been driven to extremes in the quest to provide affordable energy to citizens.

In 2019, Andhra Pradesh for instance had decided that it was paying too high a price for clean energy. After years of litigation, the local high court recently ruled in favour of the power developers. The state’s decision was a setback for investors, though it has helped restore faith that they’re shielded from retroactive tariff changes, said Shantanu Jaiswal, the head of BNEF in India.

India had 152.9 GW of renewable power capacity at the end of February, including 46.5 gigawatts from large hydroelectric plants, according to the power minister, R.K. Singh. He said another 72.6 gigawatts were at different phases of implementation. Still, that doesn’t change the distance India needs to cover, especially if it wants to meet another goal of 500 GW of non-fossil power generation by the end of the decade. Prime Minister Narendra Modi set that stretch target at the COP26 climate summit in Glasgow, U.K., in November 2021.

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