Renewable capacity addition likely at 8 GW this fiscal: ICRA

Cumulative RE capacity estimated at 120-125 GW by December 2022 aided by strong project pipeline in utility solar and wind segment.

The capacity addition in the renewable energy (RE) sector is expected to remain subdued at about 8.0 GW in FY2021 given the continued execution challenges amid COVID-19, because of disruption of supply chain as well as labour availability issues, according to a report by credit ratings agency ICRA.

This has added to the woes of the sector which continues to remain plagued by issues such as delays in land acquisition and receipt of evacuation approvals, regulatory delays in tariff adoption and obtaining financial closure in a tight financing environment.Nonetheless,the overall medium to long term investment outlook for the renewable energy sector remains strong supported by highly competitive tariffs, policy support and new schemes such as peak supply, round-the clock supply and RE plus thermal blending, which mitigates the risk of intermittent RE supply to some extent.

Sabyasachi Majumdar, Group Head &Senior Vice President – Corporate ratings, ICRA, says, “The renewable energy-based capacity is likely toreach 120-125 GW by December-2022, with the solar capacity constituting 50 percent of the overall capacity followed by 38 percent from wind power segment and the balance from other sources.While this is lower than the capacity target of 175 GW set by the Government of India (GoI), the incremental capacity addition is estimated to be healthy at 33-38 GW with investment outlay of more than Rs. 2 lakh crore over the next two and half years.”

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