Environmental Goals Present Clear Test for PM Modi

Renewables outpaced thermal capacity addition as international investors rushed in and tariffs tumbled. Uncertainty is growing over whether New Delhi can achieve its target of 225GW of installed clean energy capacity by March 2022.

December 19, 2019. By Hemant Arora

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Prime Minister Narendra Modi joined the office in 2014 and he had set clean energy targets to steer India, the world’s third-largest emitter of greenhouse gases, away from coal, as per the reports. The drive got initial success, with India boasting 80 gigawatts of renewable energy capacity representing 22 per cent of total installed capacity after Mr Modi’s first term, up from 35GW five years previously.

Renewables outpaced thermal capacity addition as international investors rushed in and tariffs tumbled. Uncertainty is growing over whether New Delhi can achieve its target of 225GW of installed clean energy capacity by March 2022.

According to Vinay Rustagi, managing director of Bridge to India, a renewables consultancy, “India’s renewable capacity goals are simply too ambitious.” “The power demand is slowing down and the utilities are reluctant to sign new power purchase agreements even when renewables provide the cheapest power.”

According to Crisil, the Indian arm of rating agency Standard & Poor’s, India’s installed capacity in renewable energy will increase 40GW to 120GW by 2022 as a result of “policy uncertainty and tariff glitches”, “There is a slowdown that is evident from the past few auctions. There has been less participation,” as per Vivek Sharma, senior director at Crisil’s Infrastructure advisory unit, referring to competitive wind and solar tenders that companies bid on.

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