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India’s Renewable Energy Sector in 2024
Context:
India made remarkable strides in the renewable energy (RE) sector in 2024, with total RE capacity reaching 205.5 GW by November in the fiscal year 2024-25.
More on News:
- India achieved a record addition of 30 GW in renewable energy in 2024.
- This progress was driven by a multifaceted strategy aimed at achieving the 500 GW non-fossil fuel capacity target.
Key Highlights:
- Solar Power Projects: Solar power projects have been a major contributor, reaching 94.17 GW as of November 2024. The distributed energy segment also added 8 GW in rooftop solar.
- This aligns with the country’s growing focus on solar energy, with solar exceeding 60 GW and wind reaching 45 GW by the end of 2024.
- Hybrid Renewable Systems: The successful deployment of hybrid renewable systems with advanced storage solutions has helped achieve grid frequency stability in the 49.90-50.05 Hz range. These systems combine renewable energy sources like solar and wind with energy storage technologies.
- Policy Initiatives: The government has introduced initiatives such as the Production Linked Incentive (PLI) scheme and the solar park scheme to support the development of 50 solar parks with a cumulative capacity of approximately 38 GW by 2025.
- Cost Reduction: Battery storage integration has seen costs drop to around $100/kWh, making round-the-clock RE power increasingly viable.
Investment Growth:
- The renewable energy sector saw a 63% increase in project finance, reaching Rs 30,255 crore (about $3.66 billion) in 2024.
- Foreign Direct Investment (FDI) in renewable energy grew by 50%, reaching $3.76 billion in FY 2023-24, while Cumulative disbursements by organisations like PFC, REC, and IREDA grew by 71.1% to Rs 3,14,200 crore in FY23-24.
Challenges and Implications:
- Grid Integration and Storage: Grid integration of renewable energy emerged as a significant challenge, with some states seeing variable generation exceeding 30%.
- Managing the integration of renewable energy (RE) into the grid requires advanced grid management systems, sophisticated forecasting, and stable frequency maintenance.
- Debt and Financial Health of DISCOMs: Despite progress, electricity distribution companies (DISCOMs) continue to face rising debt, which stood at Rs 7.14 lakh crore at the end of FY23 and is likely to have increased in FY24.
- Smart meter deployment and digital collection systems are showing promising results in addressing these financial challenges.
- AT&C (aggregate technical and commercial) losses have improved, but further reforms and smart meter deployment are essential to stabilise DISCOMs financially.
- Policy Interventions and New Initiatives: Included the launch of the PM Surya Ghar: Muft Bijli Yojna, which led to over 6.3 lakh installations in just nine months.
- The government also introduced incentive schemes for green ammonia production, offshore wind energy, and EV charging stations, while providing budgetary support for Advanced Ultra Supercritical (AUSC) technology in thermal generation and promoting small reactors in the nuclear sector.
- Storage and Grid Modernisation: As battery storage costs continue to fall and energy density improves, storage integration is expected to accelerate in both utility-scale and distributed systems.
Future Outlook:
- By 2025, the renewable energy sector is poised for 40 GW of capacity addition across all RE sources.
- Raw material availability for manufacturing and scaling up domestic solar module production under the PLI initiative will be crucial for continued progress.
- Transmission systems need to be developed in parallel to accommodate the rapid increase in renewable generation capacity.
The ongoing trend of state utilities’ listing and increased private sector participation is expected to help tackle the challenges of DISCOM debt and further drive sector growth.
