India to miss 175-GW renewables goal - CRISIL

India is expected to miss its goal of having 175 GW of renewables generation capacity in 2022 by around 42% amid policy uncertainty and low interest in tender rounds.

The country’s installed renewables capacity at the end of fiscal 2022 is seen to be just 104 GW, including 59 GW of solar and 45 GW of wind, CRISIL says in a new report. The ratings agency expects India to add just 40 GW by fiscal 2022 to the 64.4 GW it has at the end of fiscal 2019.

In its REturn to Uncertainty report, CRISIL pointed out that there is a significant drop in developer interest as tariff ceilings are being lowered, constraining project viability and causing renegotiation of tenders. The fact that some local governments have tried reducing the tariffs in signed contracts is not helping.

CRISIL’s report shows that around 26% of the 64 GW of projects auctioned by the central government and state agencies in the fiscal year ended March 2019 attracted no or lukewarm interest, while 31% faced delays in allocation. As a result, the ratio of auctioned or awarded projects to tendered projects fell to 34% in fiscal 2019 from 77% over fiscals 2015-16 and 2016-2017.

In order to restore developers’ confidence, India needs to relax tariff caps and provide a consistent and stable policy environment, CRISIL said. Besides, some policies such as renewable purchase obligations and penalties for delays in payments should be officially included in the Electricity Act, it added.

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