Green Power Takes Over: Renewables Dominate India's New Electricity Generation

In a significant shift towards sustainable energy, renewable sources played a dominant role in India's power landscape during the fiscal year 2023-24, contributing more than 70 per cent of the 26 GW of new power generated nationwide.

According to a report by the Council on Energy, Environment and Water Centre for Energy Finance (CEEW-CEF), India's total installed energy capacity has now reached 442 GW. Renewable energy constitutes approximately 33 per cent (144 GW) of this capacity, with hydro contributing 11 per cent (47 GW).

Of notable significance is the fact that the share of coal in India's total installed capacity dropped below the 50 per cent mark for the first time, underlining the growing prominence of renewables in the country's energy mix.

Solar energy emerged as a frontrunner in India's renewable energy landscape, with solar installations, including both grid-scale and rooftop setups, dominating the capacity addition. Solar accounted for approximately 81 per cent (15 GW) of the total renewable energy addition in FY24, as per the Economic Times report.

Furthermore, wind capacity witnessed a substantial increase, nearly doubling from 2.3 GW in FY23 to 3.3 GW in FY24. Additionally, nuclear capacity, adding 1.4 GW, marked its first addition since FY17.

In line with India's ambitious renewable energy targets, RE auctions reached record levels, with approximately 41 GW of auctioned capacity in FY24. The report also highlighted the conclusion of eight auctions featuring energy storage components, indicative of a growing inclination towards innovative power procurement methods.

Gagan Sidhu, Director of CEEW-CEF, noted, "Around 95 per cent of India's targeted 50 GW annual RE bidding trajectory was met in FY24. Bids of 47.5 GW issued are approximately three times the RE capacity added annually in recent years."

The report also emphasised a surge in peak power demand, reaching a new high of 240 GW in FY24. Contributing factors included a burgeoning economy and weather anomalies such as below-average rainfall and elevated temperatures.

Riddhi Mukherjee, Research Analyst at CEEW-CEF, highlighted policy shifts in the renewable energy sector, including the introduction of initiatives like PM Surya Ghar: Muft Bijli Yojana aimed at bolstering rooftop solar installations in residential segments, potentially adding 30 GW of capacity.

Additionally, amendments to the electricity rules of 2022 by the Ministry of Power, mandating the sale of un-requisitioned surplus power on exchanges, are expected to enhance supply-side liquidity and foster competitive prices on power exchanges, as per the report.