Key Takeaways
- India’s renewable energy share in the overall power generation mix is projected to stabilize at nearly 21% by FY25.
- Overall energy demand in India is expected to grow by 5-5.5% year-on-year in FY25, with new capacity additions primarily coming from renewables.
- To meet energy transition goals, India needs to add 50 GW of renewable energy capacity annually until 2030, supported by a robust project pipeline.
Stable Renewable Energy Projections for India
India’s renewable energy share, including large hydro, is expected to maintain a stable position at approximately 21% within the energy mix by FY25, according to a report by India Ratings and Research (Ind-Ra). The remaining energy capacity will primarily be derived from thermal sources.
As per the latest official data, India’s total power generation capacity reached 462 GW by December 2024, of which renewables, including hydro, account for 209.444 GW. Ind-Ra also predicts a year-on-year growth of 5-5.5% in energy requirements during FY25, driven mainly by an expected increase of 30-35 GW in new capacity, with a significant portion of that growth coming from renewable sources.
The agency affirmed a stable rating outlook for both solar and wind projects into FY26, attributing this stability to the historical performance data, consistent financial returns from counterparties, and sound internal liquidity conditions. The addition of renewable energy capacity is anticipated to gain momentum, bolstered by a substantial project pipeline, predominantly in solar energy, which is expected to elevate the renewable share in the generation mix to 35-40% by the year 2030.
Bharath Kumar Reddy, Associate Director of Infrastructure at Ind-Ra, emphasized the pressing need for round-the-clock energy solutions to address the intermittency of renewable resources. This has led to rising interest in hybrid, storage, and round-the-clock renewable tenders. The government’s strong commitment to renewable energy and favorable input prices provide an optimistic outlook for maintaining a robust pipeline of projects currently under construction.
Analyst Vinitha Arunachalam highlighted that, to achieve set energy transition goals, India must add 50 GW of renewable capacity each year until 2030. With a promising project pipeline of 174 GW as of September 2024 and ongoing healthy tendering activities, successful implementation will be crucial in meeting these ambitious targets.
In summary, India’s renewable energy initiative shows significant potential for growth, fueled by government support and a comprehensive pipeline of projects. However, addressing stability and reliability through innovative bidding strategies and consistent capacity additions will be essential for achieving long-term sustainability in the energy sector.
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