The renewable power sector will be the fastest
growing sector in India, driven by solar and wind energy, though
thermal power will continue to dominate, according
to GlobalData,
a leading data and analytics company.
GlobalData’s latest report,
‘India
Power Market Outlook to 2030, Update 2018 – Market Trends,
Regulations, and Competitive
Landscape’, reveals that
though installed non-hydro renewable power capacity and
generation levels are expected to race ahead at high compound
annual growth rates (CAGRs) of 12% and 13.2%, respectively during
the forecast period (2018–2030), this will not be enough to
dislodge thermal power’s dominance which is still expected to
account for nearly half of the capacity mix in
2030.
Chiradeep Chatterjee, Power Industry Analyst
at GlobalData,
comments: “During the forecast period, the cumulative installed
capacity is expected to grow at a CAGR of 5%. Nuclear power
installed capacity is expected to show a greater growth rate than
the historical period, at 9.7%, closely preceded by renewable
power capacity at 12%. Thermal and hydropower capacities are
expected to show growth rates of 2.1% and 3.4% respectively,
during this period.”
Non-hydro renewables are expected to contribute to
nearly 40% of the installed capacity and a little over 14% of
generation in 2030.
Thermal power will still be expected to contribute to
around 48% of the installed capacity in 2030, with coal
contributing to nearly 85% of the installed thermal capacity –
similar to the scenario in 2017.
However, coal’s contribution to the total installed
capacity is expected to decline from 57.9% in 2017 to around 40%
in 2030, primarily due to an increase in contributions from wind,
which is expected to increase from 8.6% to 14.9%, and solar PV
whose share is expected to increase from 5.6% to 20.8% during the
same period.
The high projections for wind and solar power
particularly are attributed to the high potential for these
energy sources in India, as well as the declining prices of raw
materials, which are in turn leading to a dramatic fall in
tariffs for these energy sources.
In 2016, the lowest tariff discovered in solar PV
auctions was $0.065/kWh, which fell to as low as $0.038/kWh in
2017. In wind auctions, the first of which was held in February
2017, the lowest tariff value recorded was $0.051/kWh and this
declined to $0.038/kWh in an auction held in September
2018.
Chatterjee concludes: “A significant challenge is the
continuing absence of any autonomy for the transmission and
distribution (T&D) sectors. Indian power distribution
companies (discoms) are government-owned and function
irrespective of commercial considerations, making the sector
dependent on subsidies. Outages have become commonplace in many
parts of the country.”
