India’s renewable energy plan of 175 GW by FY22-end faces multiple risks

Synopsis: 

India is now chasing its target of 450 GW of renewable power by 2030. However, several issues, including delays in the signing of power sales agreement (PSAs) stand in the way of realising the immediate target of 175 GW by the financial year 2021-22 (FY22) end.

According to a 2020 report of the Central Electricity Authority, around 16 GW of solar and wind energy capacity awarded across the country, do not have power purchase agreements (PPAs) or PSAs. It is because states are reluctant to buy renewable energy.

Reason for delay in renewable energy projects:

According to industry data, 20 GW of solar and wind power projects have been auctioned in the past three years, but barely 20 percent have been commissioned. The reasons for delay are,

• Three major issues that converge and hamper large renewable projects are land acquisition, transmission system, and regulatory delays.
• The cost of renewable energy projects is also a cause of concern. For instance, the Andhra Pradesh government in 2019, canceled all renewable energy projects, citing high rates.
• The financial distress of power distribution firms: It is a major reason for the delay in confirming contracts and the release of payments to operating units. For instance, Discoms’ overdue amounts towards renewable projects stand at Rs 11,368 crore as of May.
• The disconnect between Center and State: The Centre awards mega-project capacities, but state governments do not have a land allotment/approval process. For example,
  • In 2018, Gujarat refused to allot land to solar and wind projects that central agencies had awarded to private companies. It also said the land would only be allotted to those projects that would sell power to Gujarat
• The pandemic-induced lockdowns have delayed the projects further.

Indian solar industry is ready to balance biodiversity and ecology while achieving RE targets. But it is the challenges that are hurting India’s improvements.