Renewables to witness above 4 lakh Cr investment till March 2025: ICRA

Capacity addition expected to improve to about 11-12 GW in FY2022 aided by large project backlog

ICRA Ratings has said that it expects the incremental bidding activity for renewable energy (RE) projects to gradually shift over the medium term from standalone wind or solar bids to hybrid projects blended with other sources for round the clock (RTC) and peak supply. This is given the competitive tariffs discovered and the fact that hybrid projects enable efficient grid integration of renewables. Further, the bid out pipeline for the awarded projects as on date remains strong at about 50 GW and this in turn, is expected to result into a recovery in capacity addition to about 11-12 GW in FY2022.

Commenting on these trends, Girishkumar Kadam, Sector Head & Vice President – Corporate ratings, ICRA, says, “The RE sector has witnessed aggregate project awards of ~78 GW under the tariff-based competitive bidding route across wind, solar and hybrid projects so far. Within this, the solar power segment has occupied a dominant share of 79 percent in the bid-out projects, while wind and hybrid share stood at 16 percent and 5 percent respectively. The COVID-19 pandemic induced lockdown restrictions slowed down the RE capacity addition to 2.2 GW in H1 FY2021 against more than 4 GW reported in H1 FY2020. Nonetheless, the execution is expected to improve in the second half of the FY2021.With the easing of supply chain challenges, the capacity addition for the full year of FY2021 is expected to be about 7.5 – 8.0 GW comprising 5.5-6.0 GW from solar and 1.5 to 2.0 GW from wind.”

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