India expected to add 121 GW renewable capacity next five years: IEA

New Delhi:The International Energy agency (IEA) on Wednesday said India is expected to add 121 GW of renewable capacity over the next five years (2021-2026), an 86 percent increase on existing capacity.

A report titled , “Renewable- 2021 Analysis and forecast to 2026” released by the agency said that,  it will make India a third-largest growth market globally after China and the United States.

“Solar PV leads this deployment (74 percent ), followed by onshore wind (16 percent ) and hydropower” said the report.

The report also talked about the Covid -19 pandemic, which has reduced mobility and supply chain up to a 44% drop in renewable installations in 2020.

It said that during the same period, Indian government maintained its firm support for renewables by contracting a record level of solar and wind capacity to reach its ambitious renewable capacity target for 2022 (175 GW), which excludes large hydropower.

“During COP-26, India announced new 2030 targets of 500 GW of total non-fossil capacity and 50% renewable electricity generation share (more than double the 22% share in 2020), as well as net zero emissions by 2070. These further confirm the country’s commitment to energy transitions,” report said.

Fatih Birol, Executive Director of the IEA said India, the world’s third-biggest emitter, also experienced strong growth in renewable energy capacity in the past year, but its target – set out at Cop26 – of reaching net zero by 2070 is also regarded as too weak by many.

“The growth of renewables in India is outstanding, supporting the government’s newly announced goal of reaching 500GW of renewable power capacity by 2030 and highlighting India’s broader potential to accelerate its clean energy transition” he said.

Report also talked about, the financial health of (DISCOMSs), and said their financial conditions leading to delays in signing PPAs with auction winners and putting some projects at risk of delay and cancellation.

The agency said, the Indian government announced a new stimulus programme (USD 41 billion over the next five years) to support the DISCOMs in the installation of smart and prepaid meters to reduce losses and decrease their revenue gap.

The report also mentioned that the rising solar PV equipment costs are putting additional stress on developers.

“Equipment cost inflation may lead to project delays and cancellations. Cost increases and trade policy are also putting upward pressure on solar PV pricing over the forecast period,” it said.

From April 2022 the duty on modules imported from large manufacturing countries, including China, will increase from 14% to 40%. “As imports cover 80 % of India’s annual capacity additions, local content requirements and trade policy are expected to lead to higher prices in the short term while India increases its manufacturing capabilities” the report said.