The Union Ministry of New and Renewable Energy (MNRE) has set the highest ever capacity addition target for the clean power sector this fiscal.
It has set a new capacity addition target of 16,660 MW – close to four times the capacity target that the government set in the previous year.
In the current fiscal, solar segment is expected to achieve its highest-ever annual capacity as the target has been set at 12,000 MW, followed by wind (4,000 MW), bio power (400 MW), small hydro (250 MW) and waste-to-power (10 MW), according to MNRE.
Globally, India was in fifth position in attracting investments in solar PV sector in 2015. The Ministry is confident of achieving its significant capacity addition in solar this fiscal as it had tendered 20,000 MW worth projects during the previous year.
During the first month (April) of this fiscal, renewable energy sector has added about 237 MW of capacity of which 235 MW came from solar sector.
As of April, 2016, total grid-connected installed renewable power capacity stood at 43,087 MW. Total installed capacity of wind power stood at 26,867 MW.
Wind power Though solar is the flavour of the season, wind power sector, which still the major contributor with about 62 per cent share in overall green power installed capacity in the country, is expected to get back to strong growth curve after a slowdown phase. Meanwhile, the MNRE is also working on some new norms to facilitate faster growth in wind power capacity addition. The new guidelines are also being framed in the context of achieving ambitious target of reaching 60 GW of wind power capacity by 2022.
However, the wind energy sector is reported to be facing some challenges in the near-term owing to the substantial reduction in preferential tariff for new wind power projects in Madhya Pradesh coupled with the slowdown in signing of fresh PPAs (power purchase agreements) and delays in payments by State-owned utility in Maharashtra.
Also, the expiry of generation-based incentive (50 paise per unit) benefit on March 31, 2017 and reduction in accelerated depreciation benefit from 80 per cent to 40 per cent from 2017-18 onwards are likely to impact the capacity addition in the sector in the future, according to rating agency ICRA. The wind power sector added 3,415 MW in 2015-16, an increase of 48 per cent over the capacity addition of 2,308 MW in 2014-15.
A major portion of this capacity addition was accounted for by new projects in Madhya Pradesh, given the attractive tariff (ie. at ₹5.92 per unit) being offered in the State in the period leading up to March 31, 2016.
Thus, ICRA projects a decline in new capacity addition in wind segment to about 2,500 MW in this fiscal due to the said factors.