Renewable Energy (RE) dominated capacity addition in the fiscal year 2020-21 (FY21), accounting for 7.7 gigawatts (GW), or approximately 64%, of the 12.1 GW installed, according to a latest report by CEEW-CEF (CEEW Centre for Energy Finance) as released by Gagan Sidhu director, CEEW-CEF.
However, the report found that coal capacity additions decreased by just 6% in FY21 compared to the previous fiscal year.
“Until February 2021, rooftop solar added 1.8 GW of energy, owing to favourable policies in states such as Gujarat. Solar power additions totaled 5.5 GW in FY21, including grid-scale projects, according to a study by CEEW Centre for Energy Finance (CEEW-CEF).
It added that the imposition of basic customs duties on solar cells and modules resulted in an 11 percent increase in auction tariffs in the fourth quarter (Q4) of FY21. Though tariffs discovered in Gujarat’s solar auctions increased from an all-time low of Rs 1.99 per unit in December 2020 to Rs 2.20 per unit in March 2021.
In April 2022, a simple customs duty of 45 percent on solar panels and 20% on solar cells will take effect.
“Despite supply chain disruptions caused by the COVID-19 pandemic, India’s renewable energy market, especially solar, demonstrated resilience in FY21… India must now promote the growth of its renewable energy sector by subsidising credit enhancement for ventures, expanding the corporate bond market, and increasing power market liquidity,” said Gagan Sidhu, director, CEEW-CEF.
Additionally, the study stated that amid pandemic constraints, overall power production increased by 1.3 percent in FY21, owing to a post-lockdown jump in electricity demand. Although the share of renewable energy in the energy mix increased to 10% from 9.4% in FY20.
On the discom payables front, the report noted that funds disbursed under a government liquidity injection scheme helped discoms reduce their debt to power generators by 32% in Q4. In March 2020, dues decreased from Rs 1.09 lakh crore to Rs 0.97 lakh crore.