Pdfs 1696407568-Renewable Energy in India 2023 Report Quarterly Update 1

For Internal Use of GAIL.
Renewable Energy in
India 2023
Quarterly Update 1
July 2023
1
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2
Contents
Brief Summary and Insights 4
1 State of the Sector 7
2 Policy and Regulatory Highlights 21
3 Tender Results and Project Announcements 29
4 Recent Developments in Emerging Areas 45
5 Financial Highlights 62
6 Cost and Tariff Analysis 66
7 Challenges and Outlook 72
List of Acronyms

3
Brief Summary and Insights

4

State of the Sector
• The government's aim is to achieve 500 GW of installed electricity capacity from non-fossil sources by 2030.
• As of May 2023, India installed 173.61 GW of renewables including 67.8 GW solar power capacity, 46.8 GW hydro, 43.1 GW wind and 10.8
GW bio power. Total renewable energy capacity (excluding hydro power) is 126.76 GW.
• The Indian solar power segment has grown rapidly over the past few years to cross 67 GW of total installations as of May 2023, much
more than any other clean power source.
• The top five states in terms of installed renewable capacity which account for more than 70 per cent of the country’s installed renewable
energy capacity include: Rajasthan, Gujarat, Tamil Nadu, Karnataka and Maharashtra.
Policy and Regulatory Highlights

• In April 2023, Ministry of New and Renewable Energy (MNRE) issued the Renewable Energy Implementing Agency (REIAs)-wise bidding
calendar for the financial year 2023-24. The REIAs comprise of SECI, NTPC, NHPC and SJVN and are requested to coordinate with other
REIAs for floating of tenders and opening of bids to avoid concurrent bids.
• In May 2023, Central Electricity Authority (CEA) notified the National Electricity Plan (NEP) (Vol-I Generation) for the period of 2022-32.
The plan document includes the review of the last five years (2017 to 2022), a detailed plan for the next five years (2022-27) and the
prospective plan for the other next five years (2027-32).
• In June 2023, MNRE issued a document describing incentive programmes for the domestic production of electrolysers and green
hydrogen, with a total financial investment of 174.9 billion.
Tender Results and Project Announcements

• India Infrastructure Research has tracked 9,400 MW of utility-scale ground-mounted solar capacity that was auctioned between June 2022
and July 2023. The lowest utility-scale ground-mounted solar tariff was quoted by Aditya Birla and Hinduja Renewables in GUVNL’s 500
MW solar auction (Phase XIV).
• India Infrastructure Research has tracked 1,650 MW of wind capacity that was auctioned between July 2022 and June 2023. The lowest
wind tariff was quoted by GSECL in GUVNL’s 500 MW wind auction (Phase III).
• India Infrastructure Research has tracked 3,335 MW of solar-wind hybrid capacity that was auctioned between June 2022 and July 2023.
The lowest solar-wind hybrid tariff discovered from June 2022 – July 2023 was Rs 3 per kWh.

5

Recent Developments in Emerging Areas
• According to a notification published by the MoP, offshore wind power projects commissioned on or before December 31, 2032 will be
exempt from ISTS charges for a period of 25 years from the date of commissioning. Offshore wind projects commissioned after January 1,
2033 will be subject to graded ISTS charges.
• To encourage the establishment of pump storage plants (PSP), MoP notified that the criteria for obtaining a complete waiver of ISTS
charges for PSP projects is now linked to the date of award rather than the date of commissioning.
• A notification released in May 2023 allows a complete waiver of ISTS charges for a period of 25 years from the date of commissioning of
the project for green hydrogen or green ammonia production units commissioned on or before December 31, 2030. Further, incentives
have been announced for green hydrogen and electrolyser production.
Financial Highlights
• India Infrastructure Research has tracked the key mergers & acquisitions, equity deals, debt financings, and green bonds from February
2023 onwards. Avaada’s recent financing round was the biggest deal of this period.
Cost and Tariff Analysis

• According to PwC, the landed cost of solar module assembled in India considering imported cells is $39 cents per W. Meanwhile, the
landed cost of solar module directly imported is $42.7 cents per W. According to IRENA, the onshore wind weighted-average total installed
costs in India have fallen from $3,760 per kWh in 1990 to $926 per kWh in 2021.
• According to Central Electricity Authority (CEA), the capital cost for wind projects will grow at a CAGR of 2.64 per cent till 2031-32 to reach
Rs 77.9 million per MW. Over the same period, the capital cost of solar projects will grow at a CAGR of 1.72 per cent reaching Rs 53.3
million per MW.
Challenges and Outlook

• According to the recently released Central Electricity Authority’s National Electricity Plan (NEP), India’s total installed power capacity
would reach 900,422 MW by the end of 2031-32.
• With 507,411 MW of installations, renewables would comprise roughly 56% of this capacity with 364,566 MW of solar PV, 121,895 MW of
wind, 15,500 MW of biomass and 5,450 MW of small hydro deployments.
• India Infrastructure Research has projected that solar, wind and biopower will grow at a CAGR of 29%, 14% and 5% respectively between
2022-2027. The growth rates will reduce from there on and solar, wind and biopower will grow at a CAGR of 14%, 11% and 4%
respectively between 2027-2032.

6
State of the Sector

❖ Market Size and Growth
❖ Segment-Wise Growth Trends
❖ Share in Capacity Mix
❖ Share in Generation Mix
❖ Energy Generation Trends
❖ State-Wise Deployments Renewable
❖ Energy Trading
❖ Growth Drivers

7
State of the Sector
Market Size and Growth
• India is the world’s third-largest producer of renewable energy, with 42 per cent of its installed energy capacity sourced
from renewable energy sources (including large hydro). The total power capacity has reached 417.67 GW as of May 2023.
• As of May 2023, India installed 173.61 GW of renewables including 67.8 GW solar power capacity, 46.8 GW hydro, 43.1 GW
wind and 10.8 GW bio power. Total renewable energy capacity (excluding hydro power) is 126.77 GW.
• The government's aim is to achieve 500 GW of installed electricity capacity from non-fossil sources by 2030.
Total installed renewable capacity (GW) growth trends

140
125.16 126.77
120 • According to Invest

106.37
India, low-carbon and
100 92.97 green technologies
86.75
could create a market
80 75.05
worth up to $80 billion
62.84 in India by 2030.
60
50.01 • At present, $196.98
billion worth of projects
40 are underway in India,
led by solar segment.
20
0
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2022-23 (as of
May 2023)
Source: CEA

8
State of the Sector
Segment-Wise Growth Trends
Total installed capacity (GW) of wind and solar power for the last 5 years
• The Indian solar power segment
has grown rapidly over the past
few years to cross 67 GW of total
installations as of May 2023,
much more than any other clean
66.78 67.82
power source.
• This trend is set to continue with

48.50
a strong government impetus to
increasing solar power uptake as
42.63 43.20
40.03 it will be a major contributor to
37.50 37.4038.60
35.10 33.70 achieving India’s target of 500 GW
of non-fossil fuel power by 2030.
25.20
• The total installed wind capacity
as of May 2023 is roughly 43 GW.
• The wind segment has not grown

at pace with the solar segment
2018-19 2019-20 2020-21 2021-22 2022-23 2022-23 (as of
due to challenges in terms of cost
May 2023) escalation, delays in completing
power purchase and power sale
agreements and competition from
Solar Wind
cheaper alternatives.
Source: CEA

9
State of the Sector
Segment-Wise Growth Trends
Renewable energy hybrids Off-grid renewables Bioenergy Small hydro
• Over the past year, the • Off grid solutions can • 10.8 GW installed as of • 4.94 GW installed as of
wind-solar hybrid space play an integral role in May 2023 in the May 2023 in the small
has witnessed meeting India’s ambitious bioenergy segment. hydro space.
tremendous growth with clean energy targets.
the introduction of new • Although India has • Since June 2022, there
projects, tenders and • The segment, however, achieved its modest has been no significant
partnerships and the has not taken off at a target of 10 GW for 2022, capacity addition in small
rising focus on RTC power large scale yet. the growth in this hydro segment and the
supply. segment has been segment has seen slow
• Projects that have come relatively slow. growth overall.
• Recent tariffs discovered up are small in size and
under hybrid project scattered. • Bioenergy has diverse • The segment faces
auctions have been social benefits for several challenges:
highly competitive with farmers, the rural financial constraints on
present solar tariffs. economy, as well as for project approval, land
mitigating air pollution, acquisition, resistance by
• Hybrid tariffs are also so it is expected to grow local populations, and
much lower than wind at a faster pace if the geological and
tariffs making them right incentives are put in environmental concerns,
attractive to investors. place over the coming and lack of policy
years. impetus relative to other
segments.

10
State of the Sector
Share in Capacity Mix
Source-wise installed power capacity (MW) (as of May 2023)

• Renewable energy capacity
Diesel, Gas, 24,824, 6%
additions have continued to
Nuclear, 6,780, 2% Lignite, 6,620, 2% grow over the years even as
589,
Biopower, 10,804, 0% conventional power capacity
3% additions, including thermal
and hydro, have declined.
Small hydro,
4,944, 1%
• Between April 2022 to March
Hydro, 46,850, 2023, for instance, only 660
11%
Coal, 205,236, 49% MW of coal and 120 MW of
Wind, 43,199, 10% hydro power capacities have
been added against an
Solar , 67,821, 16% impressive 12,226 MW of
renewable energy capacity
added.
• The majority of the

renewable energy additions
have been contributed by
solar power.
• India’s total installed power generation capacity reached 417.66 GW as of May 2023.
• 205,236 MW coal-based power contributes to 49% of the total installed capacity followed by solar power with 67,821 MW
and 16% share in the capacity mix.
Source: CEA

11
State of the Sector
Share in Generation Mix
India’s changing energy mix
Energy mix in 2014-15 Energy mix in 2022-23

Between 2014-15 and
Hydro Nuclear Others
12% 3% 2%
2022-23, share of thermal
in total generation mix has Solar Hydro Nuclear Others
6% 10% 3% 1%
Wind decreased by 5% while that
3% of wind and solar has
increased. Wind
5%
Thermal
Thermal
80%
75%
• Coal-based power has the highest share in India’s energy mix followed by hydro, solar and wind.
• Since 2014-15, the share of thermal based power has been reducing, while the share of solar power has risen
tremendously.
• Nuclear based power capacity has remained stable, while the share of hydro has reduced due to increasing impetus on
solar and wind energy and other emerging clean energy sources.
Source: CEA

12
State of the Sector
Energy Generation Trends
Annual renewable energy generation (MU) trends
• Renewable energy generation

reached 203,552 MU in FY 2022-
23 vis-à-vis 170,912 MU in the 203,552
previous financial year.
• The energy generation from
renewables has seen a significant 170,912
rise from 2014 levels.

147,248
• The renewable energy generation 138,337
is being led by solar energy. 126,759
• 102,014 MU of solar energy was
generated between April 2022 and 101,839
March 2023, showing a 38.8 per
81,548
cent rise from the previous year.
65,781
• The YoY growth in generation is 61,719
less significant for wind energy
with only a 4.6 per cent YoY
growth between April 2022 and
March 2023 from the previous
year period.
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Source: CEA

13
State of the Sector
State-Wise Deployments
Source-wise renewable energy installations (MW) in top 12 states
as of May 2023
• The top 10 states make
State Wind Solar Biopower Small Hydro Total more than 90 per cent of
the total installed
Rajasthan 5,193 17,176 125 24 22,518 renewable energy capacity
in India.
Gujarat 10,416 9,681 111 92 20,300
Tamil Nadu 10,125 6,833 1,043 123 18,124 • 49 per cent of the new
solar capacity (all India)
Karnataka 5,303 8,483 1,902 1,281 16,969 was being built in
Rajasthan and 63 per cent
Maharashtra 5,026 4,725 2,641 381 12,773 of the new wind capacity
(all India) was being
Andhra Pradesh 4,097 4,534 566 163 9,360
installed in Gujarat in the
Madhya Pradesh 2,844 2,840 135 124 5,943 first 8 months of 2022.
Telangana 128 4,666 220 91 5,105 • In March 2022, Rajasthan

surpassed Gujarat in terms
Uttar Pradesh - 2,520 2,217 49 4,786 of renewable energy
Punjab - 1,177 525 176 1,878 installations.
Haryana - 1,029 259 73 1,361
Chhattisgarh - 950 275 76 1,301
Kerala 62 802 2 266 1,132
Source: MNRE

14
State of the Sector
State-Wise Deployments
State-wise installed renewable energy capacity

(as of May 2023)
• The top five states in terms of installed renewable capacity
which account for more than 70 per cent of the country’s
installed renewable energy capacity include
Jammu and Kashmir: 246
➢ Rajasthan
➢ Gujarat
Himachal Pradesh: 1,068
➢ Tamil Nadu
Punjab: 1,878
➢ Karnataka Uttarakhand: 934
➢ Maharashtra Haryana: 1,362 Delhi: 302
Uttar Pradesh:
Rajasthan: 22,518 4,786 Bihar: 399
Jharkhand: 126
Gujarat: 20,299
Madhya West Bengal: 636
Pradesh:
North-East (Manipur, Assam, Meghalaya, Tripura, Mizoram, Chhattisgarh:1,301
5,943
Nagaland, Sikkim and Arunachal Pradesh): 610 Odisha: 634
Maharashtra: 12,773
Others (Andaman & Nicobar, Puducherry, Dadra & Nagar Haveli, Telangana: 5,105
Goa, Chandigarh, Daman & Diu and Lakshadweep): 211
Karnataka: 16,969 Andhra Pradesh:
9,360
Note:
All capacities are in MW and data given is as of Tamil Nadu: 18,174
May 2023. Kerala: 1,134
The top 5 states have been highlighted in grey.
Source: MNRE

15
State of the Sector
Energy Trading
• The short-term green power trading market has evolved significantly.

• Cumulatively for 2021-22, the green market on the IEX achieved 4,854 MU volume seeing 517% YoY growth.
• On August 21, 2020, the IEX commenced trading in the Green Term Ahead Marker (G-TAM), while PXIL launched the GTAM
on its platform on March 24, 2021.
• During 2022-23, an aggregate volume of 1,392 MU was transacted on the IEX in the GTAM.
Monthly volumes and prices of electricity traded through G-TAM on IEX

200 11.41 12
(April 2022 - May 2023)
180
10
160
8.13 8.22
140
8
8.21
120 6.22
6.15
5.78 5.66 5.54 6.48
100 5.45 5.43 6
6.15 5.5
80
4
60
40
2
20
121 148 173 142 117 129 110 66 137 61 91 97 121 158
0 0
Apr-23
Apr-22
Jul-22
Jun-22
May-22
Nov-22
May-23
Aug-22
Dec-22
Sep-22
Jan-23
Feb-23
Mar-23
Oct-22
Volume (MU) Price (Rs per unit)

Source: Power exchanges; India Infrastructure Research

16
State of the Sector
Energy Trading
• Between April 2022 to March 2023, the G-DAM segment achieved 3,814 MUs volume on IEX.
• Between April 2022 to March 2023, 5.96 million RECs equivalent to 5,965 MUs were achieved at IEX. For 2021-22, the REC
market at IEX achieved 6.078 million RECs equivalent to 6,078 MU.
Monthly volumes and prices of electricity traded through Volume of RECs (millions) traded between April 2022-May
G-DAM (April 2022 - May 2023) 2023
200 11.41 12
180
Volume
10
160 Volume
8.13 8.22
140
6.48 8 0.851 0.869
8.21
120 6.15 6.22
5.78 5.66 5.54 5.5 0.673
100 5.43 6
6.15 0.588
5.45
80 0.487
4 0.374
60
0.475
0.249 0.395
40 0.358 0.372
2 0.275
20 0.199 0.142
121
148
173
142
117
129
110
137
121
158
66
61
91
97
0 0
Jul-22
Apr-22
May-22
Jun-22
Nov-22
Apr-23
May-23
Jan-23
Aug-22
Sep-22
Dec-22
Feb-23
Mar-23
Oct-22
Jul-22
May-22
Jun-22
Apr-22
Apr-23
May-23
Aug-22
Nov-22
Dec-22
Oct-22
Sep-22
Jan-23
Feb-23
Mar-23
Volume (MU) Price (Rs per unit)
Source: Power exchanges; India Infrastructure Research

17
State of the Sector
Growth Drivers
There are a number of growth drivers that are boosting India’s renewable energy capacity and taking the country closer to its
impressive targets of 500 GW of clean energy by 2030.
• India has set a target to reduce the carbon intensity of the nation’s economy by less than 45 per
Ambitious targets cent by the end 2030.
• It aims to achieve 50 per cent cumulative electric power installed by 2030 from renewables, and
achieve net-zero carbon emissions by 2070.
• The cost of renewables is increasingly becoming competitive to fossil fuel based power,
Cost- sometimes being less costly.
competitiveness • India has some of the lowest renewable generation costs, with both solar PV and onshore wind
being among the cheapest in the world.
• Successive waves of the Covid pandemic, followed by the Russia-Ukraine conflict and the ensuing
energy crisis have rekindled nations’ attention on ensuring self-sufficiency, diversification and
Energy security security in future energy supplies through reduced dependence on fossil fuel imports.
• A rapid transition to clean energy sources and a reduction in the dependence on imported fossil
fuels have become key.
• Over the past few years, the government has consistently rolled out new policies and programmes
in favour of green energy. Upfront subsidies are already offered for segments like rooftop solar
Policy impetus and solar pumps. Budget 2023 provides a large outlay of Rs 350 billion for energy transition and
zero emission target by 2070.
• Further, provisions like must-run status, waiver of transmission charges, bankable power purchase
contracts and timely regulatory intervention are giving a boost to the sector.
Source: India Infrastructure Research

18
State of the Sector
Growth Drivers
• India’s solar power potential is the largest among all renewables at 749 GWp providing ample
opportunity for development and expansion.
• Solar power is very versatile and can be installed on ground, rooftops, water bodies, and even
over vegetation, providing a strong case for its continued growth.
Enormous
• At present, only a fraction of the country’s wind potential has been tapped. The commercially
potential
exploitable potential of wind energy in India is estimated to be more than 200 GW.
• The country also has the potential to become a green hydrogen hub provided a conducive
manufacturing is set up in established over the coming years.
• India’s renewable energy market has become a global investment hotspot with the sector
witnessing the entry of large players like power utilities, investors, multilateral development
Growing market banks, developers, and suppliers both at domestic and international level.
ecosystem • Even public sector companies are now prompted to adopt green energy. On the consumer side,
apart from utilities, more C&I players, institutions, and even residential consumers are now
increasingly switching to green energy solutions.
Low-carbon • The Indian government plans to position India as an export hub for green hydrogen and
products electrolysers.
exports • Developing low-carbon products with embedded hydrogen such as green steel and green
ammonia for exports will be a key driver for growth of green hydrogen.

19
State of the Sector
Growth Drivers
• Like many large global markets, mergers and acquisitions (M&A) have been popular in India’s
renewable energy financing landscape, and this trend has continued year on year.
Wave of M&A • The growing wave of M&A will help strengthen the sector through knowledge sharing as well as
activity risk sharing among the companies.
• Growing consolidation suggests that India’s renewables market is maturing with high investor
interest.
• The government has been taking extensive measures to promote local manufacturing across
different clean energy verticals.
• A BCD of 25 per cent and 40 per cent has been imposed on solar cell and module imports
Boost to domestic
respectively, applicable from April 2022 onwards. An Approved List of Models and Manufacturers
manufacturing
(ALMM) has also been issued.
• Production-linked incentive scheme has been launched for solar and battery manufacturing.
• There are plans to introduce incentives for electrolyser manufacturing as well.
• The government has been supporting various research initiatives in the sector.
• A budget of Rs 400 million has been earmarked for R&D initiatives in hydrogen.
R&D initiatives
• Moreover, innovations in battery manufacturing, cell material and solar components are also
rapidly being developed.

20
Policy and Regulatory Highlights (From April to

June 2023)
❖ Central Level
❖ State Level

21
Central Level
In the past three months, April to June 2023, a host of policy interventions were made at the central and state levels to
improve stakeholder confidence and fasten the pace of renewable energy development in the country. Some of these are
highlighted below:
Bidding ● In April 2023, Ministry of New and Renewable Energy (MNRE) issued the Renewable Energy
trajectory for Implementing Agency (REIAs)-wise bidding calendar for the financial year 2023-24. The REIAs
renewable comprise of SECI, NTPC, NHPC and SJVN and are requested to coordinate with other REIAs for
energy projects floating of tenders and opening of bids to avoid concurrent bids.
● As per the issued order, the bidding capacity allocated to SECI, NTPC, NHPC, and SJVN are 15 GW,
15 GW, 10 GW and 10 GW respectively.
● In the same month, MNRE notified that the bids for renewable energy capacity of 50 GW per
annum, with at least 10 GW per annum of wind energy capacity, are to be issued each year from
financial year 2023 to 24 to financial 2027-28.
● Bids are to be floated in accordance with relevant Standard Bidding Guidelines issued by the
government.
● In June 2023, MoP issued guidelines for a tariff-based competitive bidding process to procure firm
Guidelines for and dispatchable power from grid-connected renewable energy projects with energy storage
competitive devices.
bidding of ● The aim of the guidelines is to ensure consistent and predictable supply of renewable energy to
renewable distribution firms while addressing intermittent nature of renewable energy and transmission
energy with system under-utilisation.
energy storage ● The guidelines emphasise the need of encouraging competition, transparency, and standardised
procurement to minimise power procurement costs, increase renewable energy capacity and meet
renewable purchase and storage power responsibilities.
● The recommendations emphasise the need for generators to produce firm and dispatchable
renewable energy in accordance with the demand profile described in the request for selection
with consequences for non-compliance.

22
Central Level
National
Electricity Plan ● In May 2023, Central Electricity Authority (CEA) notified the National Electricity Plan (NEP) (Vol-I
Generation) for the period of 2022-32. The plan document includes the review of the last five
years (2017 to 2022), a detailed plan for the next five years (2022-27) and the prospective plan
for the other next five years (2027-32).
● Based on generation planning studies carried out under the purview of preparation of NEP for
2022-27, the likely installed capacity for the period 2026-27 and 2031-32 are as follows:
Capacity (in MW) 2026-27 2031-32

Conventional 273,038 304,147
Renewable 336,553 596,275
Battery energy storage system 8,680 47,244
• NEP envisages that the share of non-fossil based capacity is likely to increase to 57.4% by the end of
2026-27 and is likely to further increase to 68.4% by the end of 2031-32 from around 42.5% as of
April 2023.
• The average emission factor is expected to reduce to 0.548 kg carbon dioxide per kWh net in 2026-
27 and to 0.430 kg carbon dioxide per kWh net by the end of 2031-32.
• The domestic coal requirement has been estimated to be 866.4 million tonnes for 2026-27 and
1025.8 million tonnes for 2031-32 and an estimated requirement of 28.9 MT of coal imports for the
plants designed to run on imported coal.

23
Central Level
Day-Ahead ● In April 2023, MoP finalised a revised structure of Day-Ahead National level Merit Order
National level Despatch Mechanism to lower the overall cost of electricity generation, which will translate into
Merit Order lower electricity prices for consumers.
Dispatch ● As per the revised mechanism, the Merit Order would be finalised a day in advance as against 1.5
Mechanism hours in the existing system.
● This will result in better planning for generating units and cost optimisation.
● Moreover, the revised mechanism will also enlarge the scope of present mechanism by including
all the regional entity thermal power plants and subsequently all the intra-state thermal
generators.
● In June 2023, MoP introduced two changes to the prevailing power tariff system, through an
amendment to the Electricity (Rights of Consumers) Rules, 2020. The changes include
ToD tariff and introduction of Time of Day (ToD) tariff, and rationalisation of smart metering provisions.
smart metering
rules ● Under the ToD tariff system, tariffs during solar hours of the day shall be 10%-20% less than the
normal tariff, while the tariff during peak hours will be 10 to 20 percent higher. ToD tariff would
be applicable for commercial and industrial (C&I) consumers having maximum demand of 10 KW
and above, from April 1, 2024 and for all other consumers except agricultural consumers, latest
from April 1, 2025.
● MoP has also simplified the rules for smart metering. To avoid inconvenience to the consumers,
the existing penalties for increase in consumer’s demand beyond the maximum sanctioned load /
demand have been reduced. As per the amendment in metering provision, post installation of a
smart meter, no penal charges will be imposed on a consumer based on maximum demand
recorded by the smart meter for the period before installation date.

24
Central Level
MAHIR Mission
● In June 2023, MoP and the MNRE jointly launched a National Mission to quickly identify
emerging technologies in the power sector and develop them indigenously, at scale, for
deployment within and outside India.
● The National Mission, titled “Mission on Advanced and High-Impact Research (MAHIR)” aims to
facilitate indigenous research, development and demonstration of the latest and emerging
technologies in the power sector.
● By identifying emerging technologies and taking them to the implementation stage, the Mission
seeks to leverage them for future economic growth.
● Planned for an initial period of five years from 2023-24 to 2027-28, the Mission will follow the
technology life cycle approach of Idea to Product.
Green Port ● In May 2023, the Ministry of Ports, Shipping, and Waterways launched ‘Harit Sagar’ – the Green
Guidelines Port Guidelines. Harit Sagar Guidelines 2023 envisions ecosystem dynamics in port development,
operation, and maintenance while adhering to the principle of ‘working with nature’ and limiting
influence on biotic components of the harbour ecosystem.
● The guidelines emphasise the use of clean energy in port operations, as well as the development
of port capabilities for storing, processing greener fuels such as green hydrogen, green ammonia,
green methanol and ethanol amongst others.
● These guidelines provide a framework for major ports to develop a comprehensive action plan
for achieving targeted outcomes in terms of quantified carbon emission reductions over defined
timeframes, through focused implementation and close monitoring of green initiatives, and to
achieve Sustainable Development Goals.

25
Central Level
Scheme for ● In June 2023, MNRE issued a document describing incentive programmes for the domestic
electrolysers and production of electrolysers and green hydrogen, with a total financial investment of 174.9
green hydrogen billion.
production ● The framework paper outlines two incentive programme components. Component I focuses on
providing electrolyser manufacturing incentives, with a Rs 44.4 billion financial outlay, and
Component II aims to boost Green Hydrogen generation, with a Rs 130.5 billion financial outlay.
● MNRE will carry out the programmes through the Solar Energy Corporation of India (SECI) as
part of the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme between
2025-26 and 2029-30.
● The first is a competitive selection procedure for bidding on the least incentive demanded for
electrolyser manufacturing over three years, and the second is where the implementing agency
will aggregate demand and call for bids for purchase of green hydrogen and its derivatives at
the lowest cost.
● To monitor and facilitate programme implementation, a Programme Monitoring Committee
has been formed, which will be led by the MNRE Secretary and will include officials from the
ministry, SECI, and specialists from other organisations.
● In June 2023, MoP announced that it had decided to benchmark the prices of biomass pellets
Biomass co-firing used for co-firing in thermal power plants (TPPs).
policy
● The benchmarked price shall take into account the business viability, impact on electricity tariff
and efficient and faster pellet procurement by power utilities. Price benchmarking of pellets will
enable the TPPs as well as pellet vendors to establish a sustainable supply mechanism for co-
firing of pellets.
● The benchmarked price as finalised by the committee under CEA, will be effective from January
1, 2024.

26
Central Level
Carbon Credit • In June 2023, MoP notified the Carbon Credit Trading Scheme, 2023. According to the
Trading Scheme, notification, the central government will constitute the national steering committee for the Indian
2023 carbon market.
• The Grid Controller of India Limited shall be the registry for the Indian carbon market
• The Central Electricity Regulatory Commission (CERC) will be the regulator to Indian carbon
market.
• CERC will regulate matters relating to trading of carbon credit certificates, safeguard interest of
both sellers and buyers, provide market oversights, take necessary preventive and corrective
actions to prevent frauds.
● In May 2023, MoP issued an amendment to the Green Energy Open Access Rules, 2023. As per
the latest amendment, the eligibility for availing green energy open access has been further
reduced from contracted demand or sanctioned load of 1 MW to 100 kW or more, either through
a single connection or multiple connections totaling 100 kW or more within the same electricity
division of a distribution licensee.
Green energy
open access ● For captive consumers availing power through green energy open access, there is no limit on the
supply of power.
● In May 2023, MoP issued a letter urging all state electricity regulatory commissions to take
appropriate action for determination of green tariff, implement the green open access rules
notified by the central government and align open access regulations in accordance with the
notified rules.
● For incentivising use of renewable energy, MoP clarified that in no case the green tariff should be
higher than the sum of average power purchase cost of renewable energy, surcharge at the rate
of 20 per cent of average cost of supply, and a reasonable margin of Rs0.25.

27
State Level
States Notifications
● In May 2023,Gujarat’s state revenue department published its policy for allocating government
wastelands to enterprises that want to manufacture green hydrogen, or hydrogen produced using
renewable energy.
● The Gujarat government has inked memorandums of understanding (MoUs) with five major
Gujarat corporations for the allocation of large tracts of government land for future green hydrogen projects.
Such enterprises will be leased government wasteland for 40 years. The state will also provide them
with the same incentives as other renewable energy projects such as wind, solar, and wind-solar hybrid.
● According to the notification, the enterprises will have to pay Rs 15,000 per hectare in annual rent, with
a 15 per cent rise every three years.
● In June 2023,the Government of Andhra Pradesh announced the launch of its “Green Hydrogen and
Green Ammonia Policy 2023”. The policy aims to achieve a five-year production capacity of 0.5 million
tonnes per year (MTPA) of green hydrogen and 2 MTPA of green ammonia.
● The policy will be in effect for five years or until a new policy is issued.
● The New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP) will serve as
Andhra the policy’s nodal agency.
Pradesh ● The state will manufacture green hydrogen or green ammonia through open access from renewable
energy plants, whether co-located or not through a captive route from renewable energy installations.
● Developers will be reimbursed 100 per cent of the net State Goods and Services Tax (SGST) on green
hydrogen and green ammonia sales for the first five years after the project’s completion.
● Renewable energy used to produce green hydrogen/green ammonia will be exempt from electricity duty
for five years, beginning with the project’s commercial operation date.

28
Tender Results and Project Announcements

❖ Solar Power
• Ground-Mounted Solar
• Rooftop Solar
• Floating Solar
❖ Wind Power
❖ Solar-Wind Hybrids and Round-the-Clock Power

29
Tender Results

30
Tender Results and Project
For Internal Use of GAIL. Announcements
Solar Power
India Infrastructure Research has tracked 9,400 MW of utility-scale ground-mounted solar capacity that was auctioned
between June 2022 and July 2023.
Utility- scale ground-mounted solar capacities auctioned between June 2022 – July 2023
Capacity Tariff Result

Name of the auction Winners
(MW) (Rs/kWh) Month
Aditya Birla 300 2.30

Hinduja Renewables 120 2.30
GUVNL’s 500 MW solar auction SJVN Limited 80 2.31 June 2022
(SJVN Limited won 80 MW out of the 200
MW capacity bid)
SJVN Green Energy 200 2.90

Juniper Green Energy 150 2.90
MSEDCL’s 500 MW solar auction
Tata Power Renewable Energy 75 2.91 August
(Phase VII)
Sukhbir Agro Energy 50 2.91 2022
Avaada Energy 25 2.91
(Avaada won 25 MW out of the 300 MW
capacity bid)
MSEDCL’s 500 MW solar auction NTPC Renewable Energy 200 2.82 September
(Phase VIII) Avaada Energy 300 2.83 2022

31
Solar Power
Utility- scale ground-mounted solar capacities auctioned between June 2022 - July 2023

(MW) (Rs/kWh) Month
Solarcraft Power India 2 (Bluepine Energy)

Solairedirect Energy (Engie) 120 2.49
GUVNL’s 750 MW solar auction Tata Power Renewable Energy 200 2.50 September
(Tranche XVI) Utkrrisht Solar Energy (UPC Renewables) 300 2.65 2022
(UPC Renewables won 130 MW out of the 130 2.66
280 MW capacity bid)
SolarArise 100 2.90

December
MSEDCL’s 500 MW solar auction Tata Power Renewable Energy 200 2.97
2022
(Tata Power won 200 MW out of the 300
MW capacity bid)
Sprng Energy 200 2.51

GUVNL’s 500 MW solar auction Ib vogt 130 2.52
January 2023
(Phase XVIII) Hinduja Renewables 120 2.52
Solarcraft Power India 9 (Bluepine Energy) 50 2.52
RECPDCL’s 1.25 GW ISTS- Solairedirect Energy (ENGIE) 300 2.55

connected solar auction (Tranche - ReNew 400 2.55 April 2023
1) NTPC Renewable 550 2.56

32
Solar Power

(MW) (Rs/kWh) Month
RECPDCL’s 500 MW ISTS- ReNew 200 2.69

April 2023
connected solar auction Avaada Energy 300 2.70
MSEDCL’s 500 MW solar auction SAEL Industries 100 2.87

April 2023
(Tranche – X) Avaada Energy 400 2.88
ReNew 200 2.71

GUVNL’s 500 MW solar auction Mahindra Susten 100 2.74
April 2023
(Phase – XIX) Solarcraft Power 60 2.74
Mahindra Susten 200 2.61

Sunfree Energy (Sukhbir Agro) 200 2.61
Solarcraft (Bluepine Energy) 150 2.61
RUVNL’s 1 GW solar auction Jakson 100 2.61 May 2023
Shiva Corporation 50 2.61

33
Solar Power

(MW) (Rs/kWh) Month
NHPC Limited 200 2.73

GUVNL’s 600 MW solar auction
SJVN Green Energy 200 2.88 May 2023
(Phase – XVII)
NTPC Renewable Energy 200 2.89
Mahindra Susten 200 2.61

Sunfree Energy (Sukhbir Agro) 200 2.61
Solarcraft (Bluepine Energy) 150 2.61
RUVNL’s 1 GW solar auction Jakson 100 2.61 May 2023
Shiva Corporation 50 2.61
KPI Green Energy 100 2.70

GUVNL’s 800 MW solar auction
SAEL Industries 400 2.71 July 2023
(Tranche – XX)
NLC India 300 2.71
The lowest utility-scale ground-mounted solar tariff discovered from June 2022–July 2023 was Rs 2.30 per kWh in Gujarat’s
June 2022 auction and the highest utility-scale ground-mounted solar tariff discovered from June 2022–July 2023 was Rs 2.97
per kWh in Maharashtra’s December 2022 auction.

34
Solar Power
India Infrastructure Research has tracked 426.9 MW of floating solar capacity that was auctioned between June 2022 and July
2023.
Floating solar capacities auctioned between June 2022-July 2023
Tariff Result
Name of the auction Winners Capacity (MW)
(Rs/kWh) Month
MSPGCL’s 105 MW grid-connected October

SJVN Limited 105 3.93
floating solar auction 2022
NTPC Renewable Energy 90 3.69

RUMSL’s 300 MW floating solar November
capacity (Phase II) 2022
Hinduja Renewables 80 3.70
SJVN’s 15 MW floating solar Not

Hartek Solar 15 March 2023
auction mentioned
BPCL’s 6.9 MW floating solar Not

ILIOS Power 6.9 June 2023
auction mentioned
● RUMSL leads in the floating solar space with 300 MW of auctions between June 2022 and July 2023, followed by MSPGCL
with 105 MW, SJVN with 15 MW and BPCL with 6.9 MW.
● The lowest tariff discovered from June 2022–July 2023 was Rs 3.70 per kWh in RUMSL’s November 2022 auction.

35
Solar Power
● The lowest utility-scale ground-mounted solar tariff was quoted by Aditya Birla and Hinduja Renewables in GUVNL’s 500
MW solar auction (Phase XIV).
● The lowest floating solar tariff was quoted by NTPC Renewable Energy in RUMSL’s 300 MW floating solar auction
(Phase II)
Lowest tariffs (Rs per kWh) discovered in recent solar power auctions
Floating solar
5
3.93 3.69 Utility-scale
4 ground-
2.90 2.82 2.90 2.87 2.71 2.73 mounted solar
2.51 2.55 2.69 2.61 2.70
Rs/kWh
3 2.49
2.30
2
0
MSPGCL - 105 MW (Oct 2022)
GUVNL XVII - 600 MW (May

RECPDCL - 500 MW (April 2023)
MSEDCL - 500 MW (April 2023)

RUMSL II (Omkareshwar) - 300
GUVNL - 800 MW (July 2023)

GUVNL XVI - 750 MW (Sep 2022)
RECPDCL - 1,250 MW (April

MSEDCL IX - 500 MW (Dec 2022)
GUVNL XIV - 500 MW (Jun 2022)
RUVNL - 1,000 MW (May 2023)

MSEDCL VII - 500 MW (Aug
MSEDCL VIII - 500 MW (Sep
GUVNL XVIII - 500 MW (Jan
GUVNL XIX - 500 MW (April

MW (Nov 2022)
2022)
2023)
2023)
2023)
2022)
2023)

36
Wind Power
India Infrastructure Research has tracked 1,650 MW of wind capacity that was auctioned between July 2022 and June 2023.

(MW) (Rs/kWh) Month
Raipur Renewables (EDF Renewables) 30 2.98
Juniper Green Energy 40 3.04
ACME Pokhran Solar 50 3.26
Gujarat State Electricity Corporation 70 2.84
GUVNL’s 500 MW wind July 2022
TEQ Green Power XII (O2 Power) 70 3.17
auction (Phase III)
Solarcraft Power India 3 (BluPine Energy) 100 3.05
Project XII Renewable Power (Ayana) 140 3.27
(Ayana won 140 MW out of the 200 MW capacity bid)
SECI’s 1.2 GW ISTS- SJVN Limited 100 2.90
December
connected wind Scatec India II BV 300 2.95
2022
auction (Tranche XIII) O2 Power 200 2.95
Lowest tariffs (Rs per kWh) discovered in recent wind power auctions
4
3.11
Rs/kWh
2.89 2.84 2.9

3 The lowest wind tariff was quoted by
GSECL in GUVNL’s 500 MW wind auction
2 (Phase III).
MW (Apr 2022)
MW (Dec 2022)
GUVNL III - 500
SECI XII - 1,200
SECI XIII - 1,200

MW (Jul 2022)
REMCL - 50
MW (May
2022)

37
Solar-Wind Hybrids
India Infrastructure Research has tracked 3,335 MW of solar-wind hybrid capacity that was auctioned between June 2022 and
July 2023.
Solar-wind hybrid capacities auctioned between June 2022 - July 2023

Name of the auction Winners Capacity (MW) Tariff (Rs/kWh) Result Month
Sprng Ojas
160 3.03
Tata Power Renewable Energy
200 3.03
RUMSL’s 750 wind-solar ReNew Power Solar September
300 3.03
hybrid auction TEQ Green Power (O2 Power) 2022
90 3.04
(O2 Power won 90 MW out of the 150
MW capacity bid)
TPDDL 255 MW wind-solar December
Tata Power Renewable Energy 255 3
hybrid auction 2022
Sprng Akshaya Urja 100 3.99
REMC’s 1 GW wind-solar NTPC Renewables 500 4.10
April 2023
hybrid auction Project Nine Renewable (Ayana Power) 300 4.10
TEQ Green Power XIII (O2 Power) 60 4.27
Amp Energy 100 4.64
SECI’s 1.2 GW wind-solar ReNew 600 4.69
April 2023
hybrid auction (Tranche – VI) Hero Future Energies 120 4.72
ACME Solar 380 4.73
CESC’s 150 MW wind solar
Amp Energy India 150 3.07 May 2023
hybrid auction
SECI leads in the solar-wind hybrid space with 1,200 MW capacity, followed by REMC with 1,000 MW, RUMSL with 75 MW,
TPDDL with 225 MW and CESC with 150 MW.

38
Solar-Wind Hybrids
Lowest tariffs (Rs per kWh) discovered in solar-wind hybrid power auctions
5
4.64
3.99
4
3.03 3 3.07
3
Rs/kWh
0
RUMSL - 750 MW (Sep 2022) TPDDL - 255 MW (Dec 2022) REMC - 1,000 MW (April 2023) SECI- 1,200 MW (April 2023) CESC - 150 MW (May 2023)
• The lowest solar-wind hybrid tariff discovered from June 2022 – July 2023 was Rs 3 per kWh.
• The lowest hybrid tariff was quoted by Tata Power Renewable Energy in TPDDL’s 255 MW wind-solar hybrid auction .

39
Project Announcements (From April to June

2023)

40
Solar Power
India Infrastructure Research has tracked 8,619.14 MW of solar tenders that were floated between April 2023 and July 2023.
Project Type Tender Agency Capacity (MW) Location Announcement Month

Utility-scale solar MSEDCL 225 April 2023
Floating solar NHPC Limited 300 Angul, Odisha April 2023
Uttar Pradesh and
Utility-scale solar HPCL 5 and 6 April 2023
Haryana
Utility-scale solar NLC India 200 Pan India April 2023
Utility-scale solar NTPC Limited 300 Gujarat April 2023
Rooftop solar Indian Railways 1 Nagpur, Maharashtra April 2023
Utility-scale solar MSEDCL 88 Nagpur, Maharashtra April 2023
Ground mounted solar SECI 300 Ramagiri, Andhra Pradesh April 2023
Ground-mounted solar MSEDCL 615 Across Maharashtra April 2023
Utility-scale solar MAHAGENCO 62 Akola, Maharashtra April 2023
Utility-scale solar POWERGRID 85 Ujjain, Madhya Pradesh April 2023
Kochuveli,
Utility-scale solar ANERT 2 April 2023
Thiruvananthapuram
Utility-scale solar HPPC 500 Haryana April 2023
Utility-scale solar UPNEDA 150 Uttar Pradesh April 2023
Rooftop solar MMRDA 7.1 Mumbai, Maharashtra April 2023

41
Solar Power
Rooftop solar ANERT 1.25 Thiruvananthapuram May 2023
Utility-scale solar JDVVNL 32.76 Jodhpur, Rajasthan May 2023
Rooftop and ground
PEDA 7 Punjab May 2023
mounted solar
Utility-scale solar JDVVNL 452 Jodhpur, Rajasthan May 2023
Rooftop solar TNPL 2.2 Tamil Nadu May 2023
Utility-scale solar JVVNL 347 Jaipur, Rajasthan May 2023
Ground-mounted solar HPCL 9.2 Delhi May 2023
Utility-scale solar HPPCL 3 Kullu, Himachal Pradesh May 2023
Ground-mounted solar BPCL 7.56 Chandrapur, Maharashtra May 2023
Agriculture Department
Ground-mounted solar of Ratnagiri Zilla 1 Golap, Maharashtra May 2023
Parishad
Utility-scale solar HPPCL 12 Kangra, Himachal Pradesh May 2023
800 MW with
Utility-scale solar GUVNL greenshoe option of Gujarat May 2023
additional 800 MW
Rooftop solar ANERT 1 Thiruvananthapuram May 2023
Sealdah Division of
Rooftop solar 1 Not mentioned May 2023
Eastern Railways
Utility-scale solar HPCL 3.6 Karnataka May 2023

42
Solar Power
South Easter Odisha, Jharkhand, West
Rooftop solar 13.54 May 2023
Railways Bengal
Utility-scale solar HPPCL 5 Una, Himachal Pradesh May 2023
Rooftop solar UPNEDA 12 Uttar Pradesh June 2023
Ground-mounted solar HPPCL 5 Jhansi, Uttar Pradesh June 2023
Utility-scale solar UPNEDA 5 Mau, Uttar Pradesh June 2023
Utility-scale solar NVVN 1.5 IIM Bodh Gaya, Bihar June 2023
Ground-mounted solar INKEL 2.7 Kerala June 2023
Military Engineer
Utility-scale solar 1 Uttar Pradesh June 2023
Services
Utility-scale solar AVVNL 72.33 Ajmer, Rajasthan June 2023
Mahasamruddhi
Utility-scale solar 4 Buldhana, Maharashtra June 2023
Renewable Energy
100 MW with 120 MWh of
Ground-mounted solar SECI Chhattisgarh June 2023
BESS
Floating solar SECI 100 Jharkhand June 2023
Rooftop solar BSNL 10 Across India June 2023
Utility-scale solar JDVVNL 531.12 Jodhpur, Rajasthan June 2023
Utility-scale solar JVVNL 4.24 Jaipur, Rajasthan June 2023
West Central
Rooftop solar 1.65 Jabalpur, Madhya Pradesh June 2023
Railways
Utility-scale solar AVVNL 82.94 Ajmer, Rajasthan June 2023
Utility-scale solar NVVN 6 Telangana June 2023

43
Other Project Announcements

Solar power

Utility-scale solar GAIL India 10 Guna, Madhya Pradesh June 2023
Utility-scale solar NHPC 3,000 Across India June 2023
Utility-scale solar IOCL 2.25 Jabalpur, Madhya Pradesh July 2023
Utility-scale solar JDVVNL 55.72 Jodhpur, Rajasthan July 2023
Utility-scale solar JDVVNL 64.48 Jodhpur, Rajasthan July 2023
Wind power
India Infrastructure Research has tracked 4-5 MW of wind tenders that were floated between April 2023 and June 2023.
Tender Agency Capacity (MW) Location Announcement Month

BEL 4-5 Karanataka April 2023
Solar-wind hybrid
India Infrastructure Research has tracked 225 MW of solar-wind hybrid tenders that were floated between April 2023 and July
2023.
Project type Tender Agency Capacity (MW) Location Announcement Month

Wind-solar hybrid Tata Power 225 Not mentioned June 2023

44

❖ Offshore Wind
• Offshore Wind Growth Timeline
• Offshore Wind Bidding Trajectory
• Offshore Wind ISTS Waiver
❖ Energy Storage
• Government Focus and Policies
• Recent Projects and Auction Results (April to June 2023)
❖ Green Hydrogen
• National Green Hydrogen Mission
• Incentive Scheme for Electrolyser Manufacturing
• Incentive Scheme for Green Hydrogen Production
• ISTS Waiver on Green Hydrogen/Ammonia Projects
• State Level Policies (April to June 2023)
• PSU and Private Sector Projects (April to June 2023)

45
Offshore Wind

46
Offshore Wind
• Offshore wind power has witnessed a lot of discussion over the past few years but has seen little on-ground action.
• These projects have higher plant load factors and are more efficient compared to onshore projects. Commercially available
offshore wind turbines normally range from 8 MW to 14 MW against just 3-4 MW for onshore wind turbines. Moreover, as
offshore wind projects are deployed in the sea, they are free from land acquisition challenges.
• However, offshore wind projects come with their own challenges, including significantly high project costs and long
gestation periods, as well as logistics, power evacuation, construction and operation and maintenance (O&M) issues at sea.
• According to the Global Wind Energy Council, India can emerge as a key market in the offshore wind energy space,
especially with the recent focus on developing the country’s capabilities in this area.
• As the offshore wind segment is at a nascent stage in India, various studies have been carried out or are under way to
determine the potential for offshore wind development in India. Based on preliminary assessment data from studies done
by the National Institute of Wind Energy (NIWE) in collaboration with various multilateral agencies, eight zones have been
identified in both Gujarat and Tamil Nadu for offshore wind exploration and development.
• Surrounded by water on three sides, India has a long coastline of about 7,600 km, making it a good candidate for
offshore wind energy deployment. The government has set a target for deploying 30 GW of offshore wind capacity by
2030.
MNRE’s draft tender for offshore wind
• In November 2022, the Ministry of New and Renewable Energy (MNRE) released a tender to lease sea-bed blocks off the
coast of Tamil Nadu for surveying and developing offshore wind energy projects.
• According to the official document, developers will be chosen through an international competitive bidding process. The
offshore wind power developer will also be responsible for grid connectivity and long-term open access to the grid. The
energy produced will be consumed in captive mode and sold to third parties under an open access framework or sold
through power exchange. The NIWE or its designated agency will issue a letter of consent to the selected developer after
obtaining the necessary clearances.

47
Offshore Wind Growth Timeline

Time period Outcome
2010-2015 • Gujarat and Tamil Nadu have an estimated

1. The National Institute of Wind Energy launched two offshore wind potential of 71 GW.
projects, Facilitating Offshore Wind in India and the • Light detection and ranging (LiDAR) systems
First Offshore Wind Project in India (FOWPI) to were deployed at a potential site 25 km off the
estimate India’s offshore wind potential. port of Pipavav in Gujarat and 5 additional LiDAR
2. MNRE notified National Offshore Wind Energy Policy systems are planned in the future
in 2015. • Offshore wind target was set at 5 GW by 2022
and 30 GW by 2030.
2015-2020
1. The outcome of FOWPI was a 1 GW tender plan in • The project garnered interest from about 35
Gujarat and a further 1 GW in Tamil Nadu. major players both at national and global level
2. In 2018, EoIs were invited for the first offshore wind but no tender was not finalized.
project at the Gulf of Khambhat in Gujarat. • This is possibly because the offshore wind
3. Guidelines for Offshore Wind Power Assessment segment is competing with cheaper land-based
Studies and Surveys and draft offshore wind lease renewables that have recorded record low tariffs
rules were launched. in the past year.
2020 onwards
• Offshore wind presents a great opportunity but
1. In November 2020, MNRE notified that India is
needs to overcome the challenges of finance
looking for structures of PPAs and offshore wind
and minimise off-taker risks.
auctions.
• Going forward, it is important to renew investor
2. In 2022, offshore wind bidding trajectory was released
confidence, reduce costs, and reduce offtaker
and a draft tender to lease sea-bed blocks off the
risk by combining the technical progress for
coast of Tamil Nadu for offshore wind was also
offshore wind with a stable policy framework.
launched.

48
Offshore Wind Bidding Trajectory

As per the central government’s bidding trajectory for offshore wind energy projects, 37 GW of wind energy projects are
planned to be bid out by 2029-30.
• A project capacity of 4 GW per year for a period of three years will be bid out, starting with the financial year (2022-23), for
development off the coast of Tamil Nadu and Gujarat. The power from these projects will be eligible for open access/captive
consumption/bilateral third-party sale/merchant sale.
• Subsequently, a project capacity of 5 GW will be bid out every year for a period of five years, that is, up to 2029-30.
• The MNRE has released a strategy paper outlining development models for the establishment of offshore wind energy
projects and the details of the models are in the following table:
Model Features
Under the first model, which will be followed for demarcated offshore wind zones where the MNRE/NIWE has carried
Model 1 out detailed studies, the MNRE (or its designated agency) will enter into a lease agreement for a 30-year period with
the successful bidders.
Under the second model applicable to offshore wind sites identified by the NIWE for which detailed surveys have not
yet been carried out, the developer may select a wind site within the identified zone and carry out the required
Model 2(a)
surveys. The MNRE, through its implementing agencies, will issue bids for the procurement of 2 GW of offshore wind
power capacity tentatively in financial year 2024-25.
The benefits of this model are provision of the power evacuation infrastructure from the offshore pooling delivery
Model 2 (B) point, waiver of transmission charges, renewable energy credits with multipliers, carbon credit benefits, etc. as
determined by the Government of India or the state government from time to time.
NIWE will identify from time-to-time large offshore wind zones with in the exclusive economic zone, but not covered
Model 3 under the other two models. The proposed offshore wind sites within these zones would be allocated for a fixed
period on a lease basis through single-stage two-envelope bidding.

49
Offshore Wind ISTS Waiver
• In May 2023, the Ministry of Power (MoP) announced a waiver of inter-state transmission charges (ISTS) for offshore wind
projects.
• This decision was made to facilitate broader implementation of offshore wind energy projects and to provide visibility and
confidence in the sector.
• According to a notification published by the MoP, offshore wind power projects commissioned on or before December 31,
2032 will be exempt from ISTS charges for a period of 25 years from the date of commissioning. Offshore wind projects
commissioned after January 1, 2033 will be subject to graded ISTS charges.
• Previously, all wind energy projects were granted a waiver until June 30, 2025. Offshore wind would now be treated
independently, with waivers provided up to December 31, 2032, followed by graded transmission charges.
• However, this is applicable only for transmission charges not losses.
SNo Period of commissioning of offshore wind energy projects Applicable ISTS charges
1 January 1, 2033 to December 31, 2033 25% of the applicable ISTS charges
4 After December 31, 2035 100% of the applicable ISTS charges

50
Energy Storage

51
Energy Storage
• Energy storage plays an important role in maintaining the dynamic system of balancing energy supply and demand, and
contributing towards a more flexible and reliable grid system.
• Given the intermittent nature of renewable energy, energy storage systems (ESS) are rapidly becoming vital for larger uptake
of renewable energy.
• These can improve the power quality, reduce peak demand, increase the capacity of distribution and transmission grids,
avoid deviation penalties, and increase the overall flexibility of the system.
• Renewable energy developers and utilities are currently the key adopters of energy storage and are announcing many
projects in this space.
• The key drivers for growth of ESS are green mobility initiatives; supportive government policies; climate commitments;
consumer electronics demand; and overall power grid decarbonisation efforts.
Recent trends Market outlook
• Pumped storage projects (PSP) and battery energy storage systems • The current installed PSP capacity in the
(BESS) are currently the most popular energy storage technologies. country is 4.7 GW which is expected to
PSP is more mature than BESS, and thus, India has witnessed a increase of 18.8 GW by 2031-32.
renewed interest in this space. • As per NITI Aayog’s report, India’s battery
• Meanwhile, there has been a slew of project announcements in BESS storage capacity is expected to reach 600
space as well either on standalone basis or integrated with GWh by the end of 2030.
renewables. • Annual demand for batteries increased at a
• Other large-scale storage technologies that use gravity-based, green compound annual growth rate (CAGR) of 25
hydrogen and any other non-electrochemical energy storage per cent between 2010 and 2020 and is
technologies are still being explored and are in early demonstration expected to quadruple to 3,100 GWh per year
stages. by 2030.
• Presently, BESS based on lithium-ion chemistries are more cost-
effective.

52
Government Focus and Policies

• ESS is a critical part of the power sector value chain as significant additions are expected to come from wind and solar
energy sources that are highly intermittent in nature.
• The government is therefore working on policies and regulations to promote ESS uptake on a large scale and the past few
months have witnessed a slew of policy interventions in this space.
Union Budget 2023-24 provisions Guidelines for Procurement and

Energy Storage Obligation (ESO)
BESS with capacity of 4,000 MWh will Utilisation of BESS
be supported with viability gap funding. India has added energy storage
obligation to its renewable energy MoP has notified the guidelines for
A detailed framework for pumped purchase scheme. procurement and utilisation of BESS as
storage projects (PSP) will also be part of generation, transmission, and
formulated. The prescribed ESO is 1 per cent in distribution assets, along with ancillary
2023-24 and will increase up to 4 per services. Bidding guidelines have also
Viability gap funding support for PSP cent in 2029-30.
projects been notified
Waiver of ISTS Charges Inclusion of PSP under Renewables

Guidelines for competitive bidding of
Inter-state transmission charges have Large pumped hydro energy storage renewable energy with energy storage
been waived off on hydro pumped systems over 25 MW are included in the
The aim of the guidelines is to ensure a
storage projects and BESS projects, RPO. A complete waiver of ISTS charges
consistent and predictable supply of
commissioned up to June 30, 2025. for PSP projects is now linked to the
renewable energy to distribution firms
These charges will be available to each date of award rather than the date of
while addressing intermittent nature of
individual user of such a project if at commissioning. This will be applicable
renewable energy and transmission
least 51% of the energy used to charge to projects where construction work is
system under utilisation.
the storage system is renewable energy. granted on or before June 30, 2025.

53
Recent Projects and Auction Results (April to June 2023)

Auctions and projects for energy storage projects are on the rise as the country continues to expand its green energy portfolio.
NTPC Renewable Energy requested proposals for 9,000 MWh interstate transmission system (ISTS)-connected
April 2023 energy storage facilities with a minimum capacity of 1,500 MW to be placed anywhere in India. NTPC Renewable
Energy seeks to use the energy storage facility to supplement its wind and solar generation with renewable RTC
(round-the-clock)/peak electricity.
Rewa Ultra Mega Solar Limited issued a request for proposals to allot sites for a total of 13.8 GW of pumped hydro
May 2023 storage development in Madhya Pradesh. According to a notification, there are a total of 12 sites available for the
construction of pumped hydro storage capacities ranging from capacities between 600 MW to 2 GW.
• SJVN Limited issued an invitation for bids to select renewable energy developers for the supply of 1,500 MW
of power from ISTS-connected renewable energy projects with energy storage capacities throughout India. The
winning bidder and SJVN will sign a PPA that will last for 25 years.
• The Central Electricity Authority (CEA) accorded concurrence to Upper Sileru pumped storage project (PSP) in
June 2023 record time of 70 days against the stipulated timeline of 90 days. The 1,350 MW PSP project is being
developed at Sileru, Alluri Sitharama Raju district of Andhra Pradesh by Andhra Pradesh Power Generation
Corporation Limited.
• NHPC Limited signed a MoU with GRIDCO Odisha, Government of Odisha, for development of PSPs and
renewable energy in Odisha. The MoU envisages setting up self-identified pumped storage projects of at least
2,000 MW and renewable energy projects of at least 1,000 MW in the state.

54
Green Hydrogen

55
National Green Hydrogen Mission

On January 4, 2023, the union cabinet gave approval to the National Green Hydrogen Mission. Following are the highlights of the
National Green Hydrogen Mission:
● The mission strategy comprises interventions for:
➢ Demand creation by making green hydrogen produced in India competitive for exports and through domestic
consumption.
➢ Addressing supply side constraints through an incentive framework.
➢ Building an enabling ecosystem to support scaling and development.
● The mission will build capabilities to produce at least 5 million metric tonne (MMT) of green hydrogen per annum by 2030,
with potential to reach 10 MMT per annum with growth of export markets.
● To promote green hydrogen development in the country, two financial incentives are being planned under the Strategic
Interventions for Green Hydrogen Transition Programme (SIGHT) programme for domestic manufacturing of electrolysers
and production of green hydrogen.
● The initial outlay for the mission will be Rs 197.44 billion, including an outlay of Rs 174.9 billion for the SIGHT programme,
Rs 14.66 billion for pilot projects, Rs 4 billion for R&D, and Rs 3.88 billion towards other mission components.
The mission is proposed to be implemented in a phased manner. The two phases are:
Phase I (2022-23 to 2025-26) Phase II (2026-27 to 2029-30)
This will focus on green hydrogen deployment in sectors that are In this phase, green hydrogen projects will be taken up in the
already using fossil fuel-based hydrogen. Further, the steel, mobility and shipping sectors. Their potential will be
formulation of regulations and standards will commence in this explored across railways and aviation as well. Further, R&D
phase. There will be an adequate focus on increasing domestic initiatives will continue to increase green hydrogen penetration
electrolyser manufacturing capacity on the supply side. across various sectors for the decarbonisation of the economy.

56
Incentive Scheme for Electrolyser Manufacturing

On June 28, 2023, MNRE released its scheme guidelines for implementation of "Strategic Interventions for Green Hydrogen Transition (SIGHT)
Programme - Component I: Incentive Scheme for Electrolyser Manufacturing“. These incentives are intended to promote quick scale-up,
technological advancement, and cost reduction for electroloysers in India. The financial outlay for the scheme is Rs 44.4 billion. The programme
will be implemented from 2025-26 to 2029-30.
Scheme Layout
Objectives of Scheme • The scheme would give funding for electrolyser manufacturing in the form of ‘Rs per kW’
Increasing capacity • According to manufacturing capability, the base incentive will begin at Rs.4,440/kW in the
Lower levelised cost
for indigenous first year and subsequently decrease on an annual basis.
of green hydrogen
electrolyser
production • The incentives suggested under this programme will be available for 5 years from the start
manufacturing of electrolyser manufacturing.
Year of Sales Year 1 Year 2 Year 3 Year 4 Year 5
Product performance
Increasing the
and quality which
domestic value Base incentive available (Rs 4,440 3,700 2,960 2,220 1,480
are globally
addition per kW)
competitive
MNRE will solicit proposals for competitive selection through the Solar Energy Corporation of
Supporting existing India (SECI). Bidders will be expected to provide the following information:
and emerging
technologies • Annual manufacturing capacity for which an incentive is being sought.
• Committed Specific Energy Consumption (SEC) of the electrolyser produced each year over
five-year period.
• Committed Local Value Addition (LVA) on an annual basis for 5 years.
MNRE will implement the scheme through SECI as the 'Implementing Agency'. SECI will be responsible for secretarial, management, and
implementation assistance, as well as other duties as allocated by MNRE from time to time.
Bids in the first tranche of 1,500 MW will be called in two separate buckets. Bucket 1 comprises capacity of 1,200 MW for electrolyser
manufacturing based on any stack technology. Bucket 2 comprises capacity for 300 MW for electrolyser manufacturing capacity based on
indigenously developed technology.
Source: Ministry of New and Renewable Energy; Incentive scheme document

57
Incentive Scheme for Green Hydrogen Production

On June 28,2023, MNRE notified its scheme guidelines for implementation of "Strategic Interventions for Green Hydrogen Transition (SIGHT)
Programme - Component II: Incentive Scheme for Green Hydrogen Production (under Mode 1)" of the National Green Hydrogen Mission. The
scheme has a budget outlay of Rs 130.5 billion and will be implemented from 2025-26 to 2029-30.
Guiding principles under scheme Capacities for bidding under Tranche 1

Technology Biomass based
Agnostic Pathways pathways
• A direct incentive in terms of ‘Rs per kg’ of green hydrogen
(Bucket I) (Bucket II)
production will be paid under the scheme for a period of three years
from the date of beginning of green hydrogen production. Total capacity 410,000 MT per 40,000 MT per
• Beneficiaries of the scheme will be chosen through a competitive available for the annum of green annum of green
process. bidding hydrogen hydrogen
Eligibility for incentives Incentives capping
Incentives capped
To be qualified for the scheme's incentives, the bidder must ensure green Year
(in Rs per kg)
hydrogen production in compliance with the comprehensive
requirements outlined in the "National Green Hydrogen Standard" as
Rs 50 per kg First year of production
notified by the MNRE.
In circumstances where the end-product is a green hydrogen derivative, Rs 40 per kg Second year of production
such as green ammonia, the incentive would be dependent on the
amount of green hydrogen (in kg) used to make the given amount of the Rs 30 per kg Third year of production
derivative.
MNRE will implement the scheme through SECI as the 'Implementing Agency'. SECI will be responsible for secretarial, management, and
implementation assistance, as well as other duties as allocated by MNRE from time to time.
A Scheme Monitoring Committee (SMC) under the chairmanship of Secretary MNRE, comprising representatives from MNRE, SECI and experts
from other organisations shall periodically review the status of implementation and performance of green hydrogen manufacturing capacities
under the scheme.
Source: Ministry of New and Renewable Energy; Nation Green Hydrogen Mission document

58
ISTS Waiver on Green Hydrogen/Ammonia Projects

• The green hydrogen policy that was notified in February 2022 provided a waiver of ISTS charges for a period of 25 years to the
manufacturers of green hydrogen and green ammonia for the projects commissioned before June 30, 2025.
• The latest notification released in May 2023 allows a complete waiver of ISTS charges for a period of 25 years from the date of
commissioning of the project for green hydrogen or green ammonia production units commissioned on or before December 31,
2030. Thus, the new notification extends the waiver applicability by five and a half years for green hydrogen projects.
• Green hydrogen/green ammonia plants commissioned on or before December 31, 2030, and which use renewable energy from
solar, wind, large hydropower plants commissioned after March 8, 2019, or energy storage systems (ESS) or any hybrid
combination of the aforementioned technologies, shall be exempt from ISTS charges for a period of 25 years.
• Drawee entities, including green hydrogen/green ammonia plants and distribution companies that contract energy (or capacity)
from an ESS project will be exempted from ISTS charges if they draw a minimum of 51% of the annual energy contracted with or
consumed from ESS as renewable energy.
• The waiver shall be allowed only for ISTS charges but not for ISTS losses. Graded ISTS charges for green hydrogen projects are
meant to address the expected challenges related to cost and offtake on a long-term basis and provide a filip to these emerging
areas
The of opportunity.
mission is proposed to be implemented in a phased manner. The two phases are:
Period of commissioning of green hydrogen/ green ammonia plants Applicable ISTS charges
January 1, 2031 0 to December 31, 2031 25% of the applicable ISTS charges
January 1, 2032 to December 31, 2032 50% of the applicable ISTS charges
January 1, 2033 to December 31, 2033 75% of the applicable ISTS charges
After December 31, 2033 100% of the applicable ISTS charges

59
State Level Policies
State Key features
• In June 2023, the Government of Andhra Pradesh announced the launch of its “Green Hydrogen and Green
Ammonia Policy 2023”. The policy aims to achieve a five-year production capacity of 0.5 million tonnes per
year (MTPA) of green hydrogen and 2 MTPA of green ammonia.
• The policy will be in effect for five years or until a new policy is issued. The programme will also stimulate
Andhra Pradesh
the establishment of green hydrogen and green ammonia-related equipment manufacturing plants, which
would help create 12,000 jobs each MTPA of green hydrogen produced.
• The New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP) will serve as the
policy’s nodal agency.
• Kerala Draft Green Hydrogen Policy, 2023 has introduced several features to incentivise the uptake of green
hydrogen including features such as open access, exemption from different charges, RPO compliance,
creation of land bank amongst many others.
• In February 2023, the Kerala government announced a Rs 2 billion scheme to develop green hydrogen hubs
in Trivandrum and Kochi. This scheme has been announced for viability gap funding, grant, and equity
support to establish green hydrogen hubs over the next two years. The state has envisaged proposal to
Kerala establish Kochi Green Hydrogen Hub by India Hydrogen Alliance.
• In April 2023, the Department of Science and Technology, Ministry of Science and Technology, invited
proposals to set up hydrogen valleys under Mission Innovation scheme to demonstrate how the entire
value chain of hydrogen. Kerala aspires to develop two green hydrogen valleys in Kochi and Thiruvanan-
thapuram.
• The state is also actively exploring partnership with Hamburg Port Authority to set up a hydrogen hub at
Kochi. Additionally, the state is exploring possibility of using peat gas for conversion to grey hydrogen or
power generation with carbon capture technology.

60
PSU and Private Sector Projects

Month Project(s)
• Jakson Green announced that it is building a green hydrogen fueling station in Badarpur, New Delhi for a
major Indian power firm. The green hydrogen fueling station entails the construction of a specialised and
dedicated facility that will generate, compress, store, and dispense green hydrogen using green energy
provided on-site by a hybrid renewable energy plant.
• GH2 Solar, a subsidiary of Uneecops Technologies Limited announced that it received a ‘letter of award’ for
April 2023
the establishment of a green hydrogen-based microgrid in Leh district in Ladakh. The project will be
established at a very high altitude of 3,200 metres.
• Bharat Heavy Electricals Limited announced its venture in the green hydrogen segment. The company intends
to hire a business consultant to help it capitalise on possible prospects in electrolyser production and the
green hydrogen value chain.
• ACME Group and Indraprastha Gas Limited (IGL), city gas distribution company signed a memorandum of
understanding (MoU) to jointly explore the potential business opportunities of green hydrogen. ACME and IGL
will work jointly to promote the adoption by the customers and create demand for green hydrogen in the
country.
May 2023
• NTPC Green Energy Limited signed a memorandum of understanding with HPCL Mittal Energy Limited (HMEL).
The MoU envisages collaboration in the field of renewable energy through sourcing of 250 MW round the
clock renewable energy to meet the power requirements of HMEL. It further aims to explore opportunities in
the green hydrogen business and its derivatives like green ammonia and green methanol.
• NHPC Limited issued a request for proposals to establish a pilot project for a green hydrogen-based mobility
station in Kargil, Ladakh, to operate two hydrogen fuel cell-based buses throughout the area.
June 2023 • Larsen & Toubro’s (L&T) Power Transmission and Distribution Business has accomplished significant milestones
for the power elements and grid packages of a green hydrogen plant, which is being developed by NEOM
Green Hydrogen Company.

61
❖ Current Funding Sources
❖ Mergers & Acquisitions and Equity Deals
❖ Debt Financing
❖ Green Bonds
❖ IPOs

62
Current Funding Sources
Most of the debt financing in the

Equity financing is one
renewable sector has taken place
of the preferred routes
in the form of loans. These loans
for raising capital for
are provided by banks,
companies in the
international financial companies,
renewable energy
multilateral financial entities as
sector. It has now grown
Renewable well as non-banking financial
to be the leading mode Sector institutions.
of investment. Financing
Equity
Debt Financing
Financing
External Domestic
Private Equity IPO Project Equity Commercial Commercial
Borrowings Borrowings
Multilateral Loans by Non- Loans by

Green Bonds Development Banking and Banking Domestic
Finance Financial Financial Commercial
Institutions Companies Banks

63
Mergers & Acquisitions and Equity Deals

India Infrastructure Research has tracked the key mergers and acquisitions in the renewable energy sector since February
2023.
Acquirer/Investor Target Company Deal Size
Brookfield Renewables, Global Power Synergy Public Co Avaada Group $1.3 billion
Climate Investment Fund (managed by Norfund) and KLP Enel Green Power’s 168 MW wind plant NOK 317 million
Sumitomo Mitsui Banking Corporation, Intermediate
Amp Energy India $250 million
Capital Group, and Asian Infrastructure Investment Bank
Brookfield Renewable CleanMax Enviro Energy Solutions $360 million
Sequoia Capital India and Aavishkaar Capital Newtrace $5.65 million
NA Solar Ladder Rs 110 million
Parishi Diamond Group and others Navitas Solar $5 million
KKR Serentica Renewables $250 million
DLF Cyber City Developers Suncloud Solar Rs 84.1 million
TPG Rise Climate, Hanover Technology Investment
Management, Energy Transition Ventures and Fenice Ohmium International $250 million
Investment Group
JSW Energy Mytrah Energy Rs 101.5 billion
The GIC sovereign wealth fund of Singapore, Abu Dhabi
Greenko Energy Holdings $700 million
Investment Authority, and Orix Corporation of Japan
Alchemie Ventures Prozeal Infra $4 million
IndiGrid Virescent Renewable Energy Trust Rs 40 billion

64
Debt Financings, Green Bonds and IPOs/Rights issues

Following is the list of key debt financings, green bonds and IPOs/rights issues in the Indian renewable energy space from
February 2023 onwards.
Debt financings
Borrower Lender Deal Size
Power Finance Corporation Japan Bank for International Corporation $2.6 billion
Vibrant Energy Power Finance Corporation Rs 22 billion
SJVN Japan Bank for International Corporation Rs 9.2 billion
Aerem Avaana Capital, Blume ventures $1.5 million
Green bonds
Issuing Company Amount
REC Limited $750 million
Diamond II Limited (wholly-owned subsidiary of ReNew Energy Global Plc) $400 million
Tata Cleantech Capital $50 million (sustainability-linked bond)
Indore Municipal Corporation Rs 3 billion
IPOs and rights issue

Company Amount
IND Renewable Energy Limited’s rights issue Rs 260 million
Adani Enterprises’ Further Public Offering AED 1.4 billion

65

❖ Equipment Price Trends: Solar
❖ Equipment Price Trends: Wind
❖ Impact on Project Costs
❖ Recent Tariff Trends
❖ Tariff Outlook

66
Equipment Price Trends: Solar
• The solar module prices saw an upward trend due to commodity price hike (especially polysilicon, glass and metals),
demand-supply mismatch, increase in GST, disruptions in China due to lockdowns and power shortage, supply chain
disruptions due to Russia-Ukraine conflict and impact of basic custom duties (BCD) and Approved List of Models and
Manufacturers (ALMM).
• The prices are expected to decrease as some of these key issues get solved.
Solar module price trend

According to PwC, the landed cost of
35
32 solar modules assembled in India
30.4 considering imported cells is $39
28.8
30 cents per W. This includes cell price at
24.6 China port ($16 cents per W), shipping
23.7
25 22.9 22.2 ($1 cent per W), BCD and taxes ($4.8
cents per W), balance of material ($9
cents per W), profit margin ($4.5
$ cents/Wp
20
cents per W), and GST ($3.7 cents per
15 W) as of end 2022.
Meanwhile, the landed cost of solar
10 modules directly imported is $42.7
cents per W. This includes module
5
price at China port ($25 cents per W),
shipping ($1.5 cents per W), BCD and
taxes ($11.7 cents per W) and GST
0
2022 2023 2024 2025 2026 2027 2028 2029 2030 ($4.6 cents per W) as of end 2022.
Source: Vaibhav Singh, Director, Energy PwC; India Infrastructure Research

67
Equipment Price Trends: Wind
• According to IRENA, the onshore wind weighted-average total installed costs in India have fallen from $3,760 per kWh in
1990 to $926 per kWh in 2021.
• Meanwhile, the weighted average LCOE of commissioned onshore wind projects in India has reduced from $0.2374 per kWh
in 1990 to $0.0299 per kWh in 2021.
Wind turbine cost components as of 2022 ($/kW)
Residual
Legal and financial, 78.9 (suppliers/other), 62.1
Distribution,
27.7
Margin, 50.0
Installation, R&D, 24.6

Materials, 406.2 Labour, 170.0 60.0 Depreciation, 46.6 Energy, 6.0
Materials followed by labour contribute the largest share of wind turbine cost.
Source: IRENA, India Infrastructure Research

68
Impact on Project Costs
• The National Electricity Plan 2023 (Volume 1, Generation) projects capital cost of solar power and wind power projects to
reach Rs 53.3 million per MW and Rs 77.9 million per MW by 2031-32 respectively.
• The capital cost for wind projects will grow at a CAGR of 2.64 per cent till 2031-32.
• Over the same period, the capital cost of solar projects will grow at a CAGR of 1.72 per cent.
Capital cost for solar and wind projects

90
75.9 77.9
80 72.1 74
68.4 70.2
64.9 66.6
70 63.2
61.6
60
Rs million per MW
51.9 53.3
48.4 49.1 49.8 50.5
45.7 46.4 47.1 47.7
50
40
30
20
10
0
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Capital cost solar Capital cost wind
Source: CEA, India Infrastructure Research

69
Recent Tariff Trends

• In the wind segment, (between July 2022 to June 2023) the lowest tariff of Rs 2.84 per kWh was discovered in GUVNL
(tranche III) 500 MW tender in July 2022. No wind auction has taken place in the past three months.
• Meanwhile, in the solar segment lowest tariff of Rs 2.49 per kWh was achieved in GUVNL (tranche XVI) 750 MW tender in
September 2022. In the past three months (April 20230, May 2023 and June 2023), the lowest discovered solar tariffs have
ranged between Rs 2.51 per kWh (GUVNL XVIII 500 MW tender) to Rs 2.87 per kWh (MSEDCL 500 MW tender).
Solar and wind tariff trends (Rs per kWh)
3.93
3.69
2.84 2.90 2.82 2.90 2.90 2.87 2.73

2.55 2.69 2.71 2.61 2.70
2.49 2.51
MSEDCL IX 500 MW Solar
GUVNL XIX 500 MW Solar

RECPDCL 500 MW Solar
MSEDCL 500 MW Solar

GUVNL III 500 MW Wind
GUVNL 800 MW Solar

MSPGCL 105 MW Solar
RUMSL II (Omkareshwar) 300 MW
RUVNL 1,000 MW Solar

GUVNL XVIII 500 MW Solar
MSEDCL VII 500 MW Solar
MSEDCL VIII 500 MW Solar
GUVNL XVII 600 MW Solar

GUVNL XVI 750 MW Solar
RECPDCL 1,250 MW Solar

SECI XIII 1,200 MW Wind
Solar
July 2022 August September 2022 October November December 2022 January April 2023 May 2023 July 2023
2022 2022 2022 2023

70
Tariff Outlook
The tariff outlook for the solar segment is impacted by uncertainties surrounding imposition of basic custom duties on
solar cells (25 per cent) and modules (40 per cent). As the existing capacity is inadequate to fulfil the demand, the hike
in BCD may push up the cost of solar manufacturing thus leading to increased tariff.
Another parameter which impacts tariff outlook in the solar space is uncertainty surrounding ALMM which
mandates use of solar modules by only select manufacturers for government tendered, open access and net-
metered rooftop solar projects. This impacted solar tariffs as mostly domestically manufactured expensive solar
modules could be used. Now, the government has lifted the ALMM mandate for projects commissioned by
March 2024.
The GST on renewable energy equipment has increased from 5 per cent to 12 per cent, making the new
effective rate approximately 14 per cent.
In the wind energy space, the bidding process has changed from reverse auctions to closed bidding. In
closed bidding, the bidder who offers the lowest (L1) tariff will win the project if the technical criteria are
met. In contrast, in reverse auctions, bidders would continue quoting lower competitive tariffs after the
opening of bids. This change in the bidding process is expected to stop aggressive bidding by developers and
lead to higher tariffs.
In India, high taxes on petrol and diesel have resulted in increased logistics cost for renewable energy projects.
In general, freight charges have increased across the world due to high oil prices.
The geopolitical disruptions had severely impacted the outlook of renewable energy prices in India. Due to lockdowns
and power shortages manufacturing was affected, leading to increased equipment prices. Supply chain disruptions
were also caused by the Russia-Ukraine conflict. These disruptions had increased the solar module price by 8-9 per
cent. Overall, these disruptions, hiked the commodity price for polysilicon, glass, copper, silver and aluminum.

71

❖ Key Challenges and Solutions
❖ Capacity Projections
• Short-Term Outlook (till 2032)
• Long-Term Outlook (2032 and beyond)
❖ Investment Outlook

72
Key Challenges and Solutions

Global economic landscape Complicated approvals and permits
- The successive waves of the pandemic followed - Various approvals are required for development
by the Russia-Ukraine conflict and ensuing of renewable energy projects which are often
energy crisis has created a global economic long and complicated. Multi-agency permits are
slowdown. often required from pre-tendering stage to post-
- Inflation is on the rise while global markets construction stages, and a single-window
continue to be volatile. This global turmoil is clearance is often lacking.
expected to impact renewable energy - Tenders are often postponed and there are
development in terms of access to finance, delays in sanctioning capacity. Further, significant
supply chains issues, and higher project costs. time is taken in tariff approval.
Contract sanctity
Financing Constraints
- Payment defaults and delays from discoms has
been a pain point for developers. Payment - It is challenging to secure long-term lending for
security mechanisms have been unsuccessful in large renewable projects in the current
resolving these issues. economic climate due to the insufficiency of
capital and liquidity in banks and NBFCs.
- There have been instances of contract
renegotiation as well which hampers investor - Continued high interest rates impact cost of
confidence. capital and project development.

73

Supply chain constraints
Challenging land acquisition process - India’s solar segment is severely dependent on
- Land acquisition and transfer of land takes import of critical equipment like modules and
significant time and thereby leads to delays in inverters.
project implementation, and even stalling of - While, steps are being taken to improve
projects in some cases. domestic manufacturing under the Make in India
- This single factor has been responsible for initiative, this scale-up will require significant
delaying many solar parks and wind projects. time and till then India's import dependence will
remain high.
Lack of policy clarity

Grid concerns
- There is a significant mismatch in policy
formulation at the central level and its actual - There is a mismatch in the construction timelines
ground-level implementation at state level. between transmission and renewable power
projects as the latter have a very short gestation
- India’s renewable energy segment witnesses period which leads to project delays.
rapidly changing policies with high variability across
states especially in terms of open access, import - Instances of grid curtailment have adversely
duties and tax regulations which lowers industry affected the credit profile of wind and solar power
confidence. projects.

74

In order to reach the 500 GW non-fossil fuel power target by 2030, the country’s renewable energy sector requires urgent
policy and regulatory interventions from the policy makers, regulators and the industry to address some of these challenges.
The sector has suffered due to policy uncertainties like confusion regarding GST, safeguard duties on
Policy certainty imports, and frequently changing open access regulations. This has impacted both developers’ and
investors’ confidence in the segment. Renewable power projects are long-term infrastructure projects
that require policy uncertainty as they have significant investments and many stakeholders involved.
Streamlining of policies and regulations across states with actual implementation on ground-level is
Easy approvals necessary which needs to be regularly monitored and accounted for. Bureaucratic hurdles need to be
addressed and approval processes made less complicated and quick with single window clearances.
Unambiguous and clearly planned policies are required with strong incentives and local demand to
Boost to domestic support domestic manufacturers. Restrictions, if imposed, should be done in a phased manner so as to
manufacturing not impact capacity additions.
There have been instances of tariff renegotiation by states like Andhra Pradesh and Uttar Pradesh, which
Ensuring contract puts millions of dollars of investments at risk and impacts developers’ confidence in this segment.
sanctity Moreover, discoms do not pay developers for power procurement on time. Thus, strict penalties and
compliance mechanisms need to be put in place.
Access to land and The rate at which capacity build-up will happen will depend on how quickly land and grid are made
grid available. Clear plans like the recently issued CEA’s transmission roadmap as well as sanctioned renewable
energy parks will help in ensuring that these challenges are taken care of, and project delays are avoided.

75
Capacity Projections – Short Term Outlook
• According to the recently released Central Electricity Authority’s National Electricity Plan (NEP), India’s total installed power
capacity would reach 900,422 MW by the end of 2031-32.
• With 507,411 MW of installations, renewables would comprise roughly 56% of this capacity with 364,566 MW of solar PV,
121,895 MW of wind, 15,500 MW of biomass and 5,450 MW of small hydro deployments.
Projected power capacity (in MW) mix by the end of 2031-32
Biomass Nuclear Gas Hydropower Pumped storage

Source 2031-32 2% 2% 3% 7% 3%
Small hydro
Hydropower 62,178 1%
Pumped storage 26,686 Wind
13%
Small hydro 5,450 Coal and lignite
29%
Solar PV 364,566
Solar PV
Wind 121,895 40%
Biomass 15,500
Nuclear 19,680
Coal and lignite 259,643
Wind power will have the
Gas 24,824 Solar power is projected to
second largest share
have the largest share (40%)
(13%) amongst
Total 900,422 amongst all power sources,
renewables followed by
even coal.
biomass and small hydro.
Note: This capacity mix does not include
Source: CEA 47,244 MW/236,220 MWh of battery
storage capacity.

76
Capacity Projections – Short Term Outlook
• Based on capacity estimations provided in NEP for 2026-27 and 2031-32, India Infrastructure Research has projected that solar, wind
and biopower will grow at a CAGR of 29%, 14% and 5% respectively between 2022-2027.
• The growth rates will reduce from there on and solar, wind and biopower will grow at a CAGR of 14%, 11% and 4% respectively
between 2027-2032.
• Meanwhile, small hydro capacity is projected to increase marginally throughout this time period.
Projected capacity of solar, wind and biomass up to 2031-32
364,566
400,000
318,508
278,269
350,000
243,114
300,000
212,400
185,566
250,000 143,726
MW
200,000
121,895
111,320
109,984
99,237
89,540
86,220
150,000
80,790
72,896
63,748
66,780
55,747
48,751
42,633
100,000
15,500
14,964
14,447
13,948
13,465
13,000
12,412
11,850
11,314
10,802
50,000
0
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
(March 2023)
Solar Wind Biopower
Source: CEA

77
Capacity Projections – Long Term Outlook
Considering the similar growth rate as that for 2027-2032 for solar and wind power installations, India Infrastructure Research
projects solar and wind power deployments to reach 3,038 GW and 865 GW by 2049-50 respectively.
Solar and wind power projected capacity (GW) up to 2050 from various Solar and wind power projected capacity (GW)
studies summarised by IEEFA and India Infrastructure Research up to 2050 by India Infrastructure Research
Report Solar Wind 3,500
3,038
CEA1 732 329 3,000
IEA Stated Policy Scenario2 1,033 298

2,500
IEA Sustainable
1,176 476
Development Scenario2 2,000
GW
IEA India Vision Case2 1,135 393 1,500
TERI/Shell3 2,300 1,680 935

1,000 865
CEEW4 2,985 1,001

500 365
291
Note: 122
1 Government of India, Ministry of Power, Central Electricity Authority. Report on 0
Optimal Generation Capacity Mix for 2029-30. January 2020. 2031-32 2039-40 2049-50
2 IEA. India Energy Outlook 2021. February 2021.
3 TERI and Shell. INDIA: Transforming to a Net-Zero Emissions Energy System. 2021
4 CEEW. Investment Sizing India’s 2070 Net-Zero Target. November 2021 Page 11 Solar Wind
Source: IEEFA; India Infrastructure Research

78
Investment Outlook
• According to the NEP, Rs 10,493 billion and Rs 15,477 billion of total funds are required for renewable energy projects
between 2022-2027 and 2027-2032 respectively. This includes solar, wind, offshore wind, biomass, small hydro power,
pumped storage and battery storage projects.
• Solar power segment, which is expected to witness maximum capacity additions in the renewables space, has the highest
projected funds requirement followed by wind power.
Projected funds requirements for renewable power projects up to 2031-32

9,000
7,968
8,000
6,810
7,000
6,000
Rs billion
5,000
4,000 3,309
2,926
3,000 2,309
2,000
542 752 566
1,000 274 247
0 231 19 17
0
Wind Offshore wind Biomass Solar Pumped storage Battery storage Small hydro power
2022-2027 2027-2032
Note: The total fund requirement for various sources has been arrived based on estimated standard cost per MW for the year 2021-22 with annual escalation at 3%. For
instance, for 2022-23, cost per MW for various sources has been considered as Rs 51.3 million for pumped storage, Rs 45.7 million for solar, Rs 61.6 million for wind, Rs 92.4
million for biomass and Rs 77.8 million for battery storage for 4-hours and Rs 106.8 million for battery storage for 6-hours. For offshore wind, cost per MW considered for
2027-28 is Rs 194.1 million.
Source: CEA

79
List of Acronyms

80
List of Acronyms
List of Acronyms
Acronym Expansion
AC Alternating Current
AP Andhra Pradesh
APGECL Andhra Pradesh Green Energy Corporation Limited
BOS Balance of System
BCD Basic Customs Duty
BOO Build, Own and Operate
CUF Capacity Utilisation Factor
CEA Central Electricity Authotrity
CERC Central Electricity Regulatory Commission
CPSU Central Public Sector Undertaking
CTU Central Transmission Utility
C&I Commercial and Industrial
CAGR Compound Annual Growth Rate
DC Direct Current
DISCOM Distribution Company
EPC Engineering, Procurement, Construction
GST Goods and Services Tax
GEC Green Energy Corridor
GSECL Gujarat State Electricity Corporation Limited
IREDA Indian Renewable Energy Development Agency
IEEFA Institute for Energy Economics and Financial Analysis
ISTS Inter-State Transmission System

81
List of Acronyms
List of Acronyms
Acronym Expansion
IRR Internal Rate of Return
IEA International Energy Agency
IRENA International Renewable Energy Agency
KERC Karnataka Electricity Regulatory Commission
KSEB Kerala State Electricity Board
LOA Letter of Award
LiDAR Light Detection and Ranging
MP Madhya Pradesh
MPPGCL Madhya Pradesh Power Generating Company Limited
MSEDCL Maharashtra State Electricity Distribution Company Limited
MAHAGENCO Maharashtra State Power Generation Company Limited
MoU Memorandum of Understanding
MNRE Ministry of New and Renewable Energy
MoP Ministry of Power
MSKVY Mukhyamantri Saur Krishi Vahini Yojana
NHPC National Hydro Power Corporation
NCR National Capital Region
NIWE National Institute of Wind Energy
O&M Operations and Maintenance
PV Photovoltaic
PFC Power Finance Corporation
PPA Power Purchase Agreement

82
List of Acronyms
List of Acronyms
Acronym Expansion
PM-KUSUM Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan
PLI Production-Linked Incentive
RE Renewable Energy
RPO Renewable Purchase Obligation
RfS Request for Selection
R&D Research and Development
RTC Round-The-Clock
REC Rural Electrification Corporation
SECI Solar Energy Corporation of India
SPV Special Purpose Vehicle
STU State Transmission Utility
TANGEDCO Tamil Nadu Generation and Distribution Corporation Limited
UP Uttar Pradesh

83
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Pdfs 1696407568-Renewable Energy in India 2023 Report Quarterly Update 1

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© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Brief Summary and Insights 4

1 State of the Sector 7

2 Policy and Regulatory Highlights 21

3 Tender Results and Project Announcements 29

4 Recent Developments in Emerging Areas 45

6 Cost and Tariff Analysis 66

7 Challenges and Outlook 72

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Brief Summary and Insights

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Brief Summary and Insights

Policy and Regulatory Highlights

Tender Results and Project Announcements

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Brief Summary and Insights

Cost and Tariff Analysis

Challenges and Outlook

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

State of the Sector

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Market Size and Growth

Total installed renewable capacity (GW) growth trends

120 • According to Invest

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Segment-Wise Growth Trends

• This trend is set to continue with

• The wind segment has not grown

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Segment-Wise Growth Trends

Renewable energy hybrids Off-grid renewables Bioenergy Small hydro

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Share in Capacity Mix

Source-wise installed power capacity (MW) (as of May 2023)

• The majority of the

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Share in Generation Mix

India’s changing energy mix

Energy mix in 2014-15 Energy mix in 2022-23

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Energy Generation Trends

Annual renewable energy generation (MU) trends

• Renewable energy generation

rise from 2014 levels.

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Telangana 128 4,666 220 91 5,105 • In March 2022, Rajasthan

Haryana - 1,029 259 73 1,361

Chhattisgarh - 950 275 76 1,301

Kerala 62 802 2 266 1,132

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

State-wise installed renewable energy capacity

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

• The short-term green power trading market has evolved significantly.

Monthly volumes and prices of electricity traded through G-TAM on IEX

Volume (MU) Price (Rs per unit)

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Source: Power exchanges; India Infrastructure Research

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com

Source: India Infrastructure Research

© India Infrastructure Research | July 2023 | www.indiainfrastructure.com