India to add 16 GW of renewable energy capacity in FY23: ICRA

10 GW renewable capacity will be added in 2022 itself, according to Bridge to India.

According to PTI, India is expected to add an estimated 16 GW of renewable energy in FY23, according to rating agency ICRA. The country also has a strong pipeline of 55 GW clean energy projects.

The outlook for capacity addition “remains positive,” according to ICRA, thanks to a vast project pipeline and “very competitive tariffs offered by these projects.” It predicts 16 GW capacity increase in FY23, compared to 12.5 GW in FY22 and 7.4 GW in FY21.

It believes that agreements made at the last COP26 summit, such as raising non-fossil fuel power capacity to 500 GW and achieving half of the world’s energy needs with renewables by 2030, will boost the renewable energy sector’s prospects.

It also stated that capacity addition made a “solid rebound” between April and November 2021 (FY22), adding 8.2 GW versus 3.4 GW the previous year.

Solar Energy Corporation of India (SECI) has made significant success in signing power purchase agreements (PPAs) in the last six months, followed by wind and hybrid.

Execution headwinds and supply chain challenges for acquiring modules and wind turbine generators are among the near-term challenges.

The average price of imported solar PV modules (Mono PERC) has climbed by over 35% in the last year, placing increasing pressure on capital expenses for solar power plants, according to ICRA. Aside from that, the Goods and Services Tax (GST) rate for solar power equipment was raised.

Meanwhile, according to a Bridge to India report, India will add 10 GW of renewable capacity this year (2022). According to The Economic Times, this is down 10% year on year.

If the basic customs duty (BCD) is introduced as scheduled in April 2022, it expects rooftop and open access solar projects to suffer a “immediate blow.” The Union Budget 2022 is likely to make the final pronouncement on BCD.

On the plus side, it noted that the Budget’s clarity on BCD and the expansion of the production-linked incentive (PLI) scheme to include bidders will help to stimulate domestic manufacturing.