New Delhi
8 April 2023
India's plans to significantly increase renewable capacity auctions will put "a lot of pressure" on the industry to scale up quickly, according to the CEO of one of the largest clean energy providers. India will begin auctioning off 50 gigatonnes of solar and wind power capacity per year until 2028, more than doubling the current rate. The proposal outlined by India's renewable energy ministry was welcomed by Sumant Sinha, CEO of ReNew. However, he noted that renewable energy companies were already overburdened in order to keep up with existing work.
More bidding will "put a lot of pressure on people like us because we need to raise capital, have equipment, be able to execute on the ground, and hire people," he said in an interview with the Financial Times. "None of that is easy." The planned increase comes as India races to meet its ambitious goal of installing 500 gigatonnes of clean energy capacity by 2030 in order to meet 50% of the country's electricity needs from renewable sources. "This is the first step in making the seriousness of their 500 GW target more credible and real," Sinha said.
"We can do it, but we'll need some time to ramp up." ReNew has completed approximately 8 GW of capacity and has committed to constructing nearly 6 GW more over the next two years. "There is no shortage of market opportunity," Sinha said. "Rather than anything else, it has always been a question of how much we can execute."
India still gets the majority of its power from coal and other fossil fuels, and the International Energy Agency predicts that the country's energy demand will be among the fastest-growing in the world until 2030. While Prime Minister Narendra Modi's government hopes that clean energy sources will meet a large portion of this demand, the country has so far struggled to meet its targets, falling short of a plan to install 175 GW by last year. According to a memo from the renewable energy ministry, the government intends to auction at least 15 GW by June of this year, followed by 10 GW to 15 GW for the remaining three quarters of the year. "Because it's a fairly short-term target, we'll have a pretty good sense of whether they're heading in the right direction or not," Sinha explained.
ReNew is expanding into new markets, and it recently received $180 million in government subsidies as part of a programme to promote domestic manufacturing of solar cells, wafers, and modules. Tata Power and Adani Green, both part of the Adani Group conglomerate, are also investing billions in renewable energy alongside ReNew. Adani plans to reach 25 GW by 2025. However, the group's expansion plans have been hampered after fraud allegations by US short seller Hindenburg Research triggered a market rout earlier this year, wiping up to $145 billion off the value of its listed companies, including Adani Green. Adani categorically denies the allegations. While Adani has stated that it is committed to aggressive investment in renewables and other areas, some analysts have questioned the company's ability to keep up. Without Adani, Sinha believes India will struggle to maintain its current rate of renewable energy growth. "From a capacity addition standpoint, they are one of the larger players, with significant plans to add more capacity," he explained. "If that is delayed, it will undoubtedly have an impact on capacity addition in the country as a whole."
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