Renewable Energy Industry in India

Indian renewable energy sector is the fourth most attractive renewable energy market in the world.

Installed renewable power generation capacity has gained pace over the past few years, posting a CAGR of 17.33% between FY16-20. With the increased support of Government and improved economics, the sector has become attractive from investors perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role. The government is aiming to achieve 227 GW of renewable energy capacity (including 114 GW of solar capacity addition and 67 GW of wind power capacity) by 2022, more than its 175 GW target as per the Paris Agreement. The government plans to establish renewable energy capacity of 523 GW (including 73 GW from Hydro) by 2030.

As of February 2021, installed renewable energy capacity stood at 94.43 GW. The country is targeting about 450 Gigawatt (GW) of installed renewable energy capacity by 2030 – about 280 GW (over 60%) is expected from solar.

From April 2015 to February 2021, India has added 117.9 GW of power generation capacity, including 64.5 GW of conventional source and 53.4 GW from renewable sources.

By December 2019, 15,100 megawatts (MW) of wind power projects were issued, of which, projects of 12,162.50 MW capacity have already been awarded2. Power generation from renewable energy sources in India reached 127.01 billion units (BU) in FY20.

With a potential capacity of 363 GW and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India.
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Investment Milestones in Renewable Energy (1/2)

According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in the Indian non-conventional energy sector stood at US$ 9.83 billion between April 2000 and December 2020. According to the analytics firm British Business Energy, India ranked 3rd globally in terms of its renewable energy investments and plans in 2020.

Some major investments and developments in the Indian renewable energy sector are as follows:

  • In May 2021, Adani Green Energy Ltd. (AGEL), signed share purchase agreements for the acquisition of 100% interest in SB Energy India from SoftBank Group (SBG) and Bharti Group. The total renewable portfolio is 4,954 MW spread across four states in India.

  • In May 2021, Virescent Infrastructure, a renewable energy platform, acquired 76% of India’s solar asset portfolio of Singapore-based Sindicatum Renewable Energy Company Pte Ltd.

  • In April 2021, Central Electricity Authority approved the uprating of JSW Energy Karcham Wangtoo hydro power plant to 1,091 megawatt (MW) from 1,000 MW.

  • In April 2021, GE Power India's approved the acquisition of 50% stake in NTPC GE Power Services Pvt. Ltd. for Rs 7.2 crore (US$ 0.96 million).

  • The NTPC is expected to commission India’s largest floating solar power plant in Ramagundam, Telangana by May-June 2022. The expected total installed capacity is 447MW.

  • In March 2021, Edelweiss Infrastructure Yield Plus (EIYP), an alternative investment fund managed by Edelweiss Alternative Asset Advisors, acquired a 74% stake in the solar portfolio of Engie Group in India.

  • In March 2021, the US Agency for International Development (USAID) and the US International Development Finance Corporation (DFC) reported a loan guarantee programme worth US$ 41 million to support Indian SME investments in renewable energy.

  • In March 2021, Adani Green Energy announced plan to acquire a 250 MW solar power project in the northern state of Rajasthan (commissioned by Hero Future Energies). The expected deal value stands at ~Rs.10 billion (US$ 136.20 million).


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Investment Milestones in Renewable Energy (2/2)



  • In March 2021, Adani Green Energy Ltd. (AGEL) signed a contract to acquire a 100% stake in SkyPower Global's 50 MW solar power project in Telangana. This would increase its operational renewable capacity to 3,395 MW, with a total renewable portfolio of 14,865 MW.

  • In March 2021, JICA (Japan International Cooperation Agency) entered a loan agreement with Tata Cleantech Capital Limited (TCCL) for JPY 10 billion (US$ 90.31 million) to enable the firm provide loans to companies in India for renewable energy production, e-mobility solutions and energy conservation in order to help offset the effects of climate change by reducing greenhouse gas (GHG) emissions (in line with the Green Loan Principles).

  • In March 2021, the European Union joined the Coalition for Disaster Resilient Infrastructure (CDRI), an India-led initiative aimed at ensuring long-term development while addressing the climate change's adverse effects.

  • In March 2021, India and the US agreed to restructure their strategic energy partnership to concentrate on cleaner energy sectors including biofuels and hydrogen production.

  • India added 2,320 MW of solar capacity amidst COVID-19 pandemic from January to September 2020.

  • In October 2020, post approval from NITI Aayog and the Department of Investment and Public Asset Management, NTPC set up a wholly owned company for its renewable energy business—NTPC Renewable Energy Ltd. NTPC is targeting to generate ~30% or 39 GW of its overall power capacity from renewable energy sources by 2032.

  • The Solar Energy Corporation of India (SECI) implemented large-scale central auctions for solar parks and has awarded contracts for 47 parks with over 25 GW of combined capacity.

  • In April 2020, Vikram Solar bagged a 300 megawatt (MW) solar plant project for Rs. 1,750 crore (US$ 250.39 million) from National Thermal Power Corporation Ltd (NTPC) under CPSU-II scheme in a reverse bidding auction.

  • Adani Group aims to become the world’s largest solar power company by 2025 and the biggest renewable energy firm by 2030.

  • Around Rs. 36,729.49 crore (US$ 5.26 billion) investment was made during April-December 2019 by private companies in renewable energy.


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Regulatory and Policy Initiatives by Government(1/2)

Some initiatives by Government of India to boost India’s renewable energy sector are as follows:

  • In April 2021, the Central Electricity Authority (CEA) and CEEW’s Centre for Energy Finance (CEEW-CEF) jointly launched the India Renewables Dashboard that provides detailed operational information on renewable energy (RE) projects in India.

  • In April 2021, the Ministry of Power (MoP) released the draft National Electricity Policy (NEP) 2021 and has invited suggestions from all stakeholders such as Central Public Sector Undertakings, Solar Energy Corporation of India, power transmission companies, financial institutions like Reserve Bank of India, Indian Renewable Energy Development Agency, HDFC Bank, ICICI Bank, industrial, solar, and wind associations, and state governments.

  • In March 2021, the Union Cabinet approved a Memorandum of Understanding (MoU) in the field of renewable energy cooperation between India and the French Republic.

  • In March 2021, Haryana announced a scheme with a 40% subsidy for a 3 KW plant in homes, in accordance with the Ministry of New and Renewable Energy's guidelines, to encourage solar energy in the state. For solar systems of 4-10 KW, a 20% subsidy would be available for installation from specified companies.

  • In March 2021, India introduced Gram Ujala, an ambitious programme to include the world's cheapest LED bulbs in rural areas for Rs. 10 (US$ 0.14), advancing its climate change policy and bolstering its self-reliance credentials.

  • In the Union Budget 2021-22, Ministry for New and Renewable Energy was allocated Rs. 5,753 crore (US$ 788.45 million) and Rs. 300 crore (US$ 41.12 million) for the ‘Green Energy Corridor’ scheme.

  • Under Union Budget 2021-22, the government has provided an additional capital infusion of Rs. 1,000 crore (US$ 137.04 million) to Solar Energy Corporation of India (SECI) and Rs. 1,500 crore (US$ 205.57 million) to Indian Renewable Energy Development Agency.


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Regulatory and Policy Initiatives by Government (2/2)



  • To encourage domestic production, customs duty on solar inverters has been increased from 5% to 20%, and on solar lanterns from 5% to 15%.

  • In November 2020, Ladakh got the largest solar power project set-up under the central government’s 'Make In India' initiative at Leh Indian Air Force Station with a capacity of 1.5 MW.

  • In November 2020, the government announced production-linked incentive (PLI) scheme worth Rs. 4,500 crore (US$ 610.23 million) for high-efficiency solar PV modules manufacturing over a five-year period.

  • On November 17, Energy Efficiency Services Limited (EESL), a joint venture of PSUs under the Ministry of Power and the Department of New & Renewable Energy (DNRE), Goa, signed a memorandum of understanding to discuss roll-out of India’s first Convergence Project in the state.

  • In October 2020, the government announced a plan to set up an inter-ministerial committee under NITI Aayog to forefront research and study on energy modelling. This, along with a steering committee, will serve the India Energy Modelling Forum (IEMF), which was jointly launched by NITI Aayog and the United States Agency for International Development (USAID).

  • India plans to add 30 GW of renewable energy capacity along a desert on its western border such as Gujarat and Rajasthan.

  • Delhi Government decided to shut down thermal power plant in Rajghat and develop it into 5,000 KW solar park.

  • The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.

  • Indian Railways is taking increased efforts through sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33% by 2030.


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The Future is Renewable

The Government is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas.

The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 227 GW by 2022, of which about 114 GW is planned for solar, 67 GW for wind and other for hydro and bio among other. India’s renewable energy sector is expected to attract investment worth US$ 80 billion in the next four years. About 5,000 Compressed Biogas plants will be set up across India by 2023.

It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. Renewable energy will account for 55% of the total installed power capacity by 2030.

As per the Central Electricity Authority (CEA) estimates, by 2029-30, the share of renewable energy generation would increase from 18% to 44%, while that of thermal is expected to reduce from 78% to 52%.

According to the year-end review (2020) by the Ministry of New and Renewable Energy, another 49.59 GW of renewable energy capacity is under installation and an additional 27.41 GW of capacity has been tendered. This puts the total capacity of renewable energy projects (already commissioned or in the pipeline) at ~167 GW.

The Government of India wants to develop a ‘green city’ in every state of the country, powered by renewable energy. The ‘green city’ will mainstream environment-friendly power through solar rooftop systems on all its houses, solar parks on the city’s outskirts, waste to energy plants and electric mobility-enabled public transport systems.
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Section -7

Many companies have attained stepladder growth by identifying the winds of change in policies, which sometimes open up new business models. Those companies are also able set the agenda for future industry reforms through sustained dialogues.

Policy agenda might be construed as a specific policy ask, but this is not always the case. Moreover, a good policy agenda is accomplished only after several revisions, lengthy discussions, and healthy debate. Therefore, in the best interest of industry, leading companies deliberate, discuss and voice their concerns to the policy makers and parliamentarians.

Given the potential for a seismic shift in our nation’s political and regulatory landscape, we believe; these are times when close attention should be paid to regulatory developments. In times to come, when regulatory supervision is only going to increase, more proactive companies would continue to bear the fruit of favourable and accommodating rules.
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Section -8

The ripple effects of a tumultuous 2020 are likely to be even more enduring and impactful than the forces that initially triggered them. In the aftermath of Covid the government is determined to build the economy through incentives like PLI schemes to boost domestic manufacturing, amending FDI regulations, setting aside startup funds, accelerating digital transformation, building infrastructure and going ahead with its ambitious disinvestment and asset monetization plans.

All of this would entail administrations pulling regulatory and legislative levers to implement its priorities. We are here to help your business along with implications for how to respond to shifts. Numerous companies and hyper growth startups have been a beneficiary of our advocacies and interventions.
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Section - 9

We have reimagined the ways how the process of new age policy making would be.

Over the last decade, the government has taken a more professional approach to policy making.There has been a movement away from policy advice by generalists to one informed by concepts of risk, management, and delivery of services.

Our approach to policy advisory incorporates the perspectives of ministers as well as civil servants, since policy is the responsibility of both parties, and a product of their joint efforts. Bureaucrats, members of standing committees, joint parliamentary committees and opinion leaders can be persuaded to take a more proactive and participatory role in the emerging grey areas in policy dialogues.
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Section -10

India remains a complex market. It is best to view India not as a single market, but as a series of interconnected regional markets where the regulatory and investment climate changes from one state to another.

Many states have created investment cells to attract business and have framed policies around them but the lack of coherence between the launch of new policy initiatives and policy stewardship leaves a lot to be desired. While most of the state civil servants acknowledge that they have to be innovative in their approach, there is a lack of clarity over what this means in practice. The ensuing implementation of reform policies is therefore likely to be heavily shaped by the culture. It has been the case that few states in India, receive the new policy ideas like Smart City Mission and Ayushman Bharat very attractive and scalable yet difficult to implement due to logistical and legacy issues.

To correct such perceptual anomalies and resistance, policy discussion needs to be tailored to the culture and existing economic opportunity present in the state.
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