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India is set to install nearly 20.2 GW of wind power capacity
through 2025, raising capacity in the world's fourth-largest wind
power market by more than 50% from the 39.2 GW currently up and
running, according to a study released 10 June.
The study, published by the Global Wind Energy Council (GWEC),
and titled India Wind Energy Market Outlook
2025, found a 10.3-GW pipeline of
projects in federal (or central) and state markets is expected to
drive installations until 2023.
After 2023 though, growth is likely be pushed forward by almost
10 GW of capacity awarded to wind projects through mainly hybrid
tenders, it said. Hybrid tenders combine wind and solar in an
effort produce a higher capacity utilization factor.
Through 2025, 90% of new installed wind capacity will come from
federal government tenders, GWEC said.
While GWEC expects installed Indian wind capacity to total 59.4
GW at the end of 2025, it said there is a chance under an
"ambitious case projection" model that as much as 62.9 GW of
capacity could be up and running by that point.
If India wants to unlock its full wind energy potential, the
government must boost consensus and coordination among agencies
"with a consistent and aligned market roadmap," particularly when
it comes to size, frequency, and composition of tenders, GWEC said.
Also, technology exchange promotion and alignment to the global
supply chain will encourage a manufacturing base, it added.
The Indian government set a 140 GW target for installed wind
capacity by 2030.
This is one part of a strategy, outlined over the
last year, in which the country seeks to decarbonize its
coal-reliant power sector. At present, coal supplies 44% of the
country's energy demand, oil provides 25%, solid biomass 13%,
natural gas 6%, and hydropower and wind/solar each provide about
1%.
India has a huge untapped potential for wind generation and
manufacturing, GWEC India Policy Director Martand Shardul said in
the report, adding that "the evolving Indian energy market will be
key to the success of the world's future energy technologies."
Cost won't be a barrier, the report argues. On average, the
Indian wind levelized cost of energy—the cost of power
generation over the lifetime of the facility—is roughly 35%
lower than most coal plants in the country, it said. In addition,
the government made financing incentives available in 2020 as a
result of the COVID-19 pandemic.
COVID-19 hit hard
The impact of COVID-19 lockdowns on India's wind energy market
was more severe than anticipated, GWEC found, with only 1.1 GW
installed out of the 3.3 GW originally forecasted for 2020.
But the pace of installations is forecast to double in the next
two to three years compared with average annual installations since
2017.
"It is encouraging to see the market beginning to bounce back,
but to drive a post-pandemic green recovery and realize its climate
goals, India will need to adopt a more aggressive climate emergency
approach and set clear short-term milestones to enable an even more
rapid uptake of wind projects," Shardul said in a statement
accompanying the release of the study.
The study maps out three scenarios for wind installations in
2021-2025. In the conservative scenario, installations would come
in at 14.8 GW as a result of the existing pipeline of projects
shrinking and sporadic auctions, GWEC said. The ongoing COVID-19
crisis is likely to keep forecasts closer to a conservative
scenario, it admitted.
Source: Global Wind Energy Council
Under the ambitious scenario, nearly 24.4 GW of volume would be
installed by the end of 2025, driven mostly by high demand for
price-competitive hybrid auctions across India and all the projects
in the pipeline being built.
Goals
In 2015, India set an overall renewable generation capacity
target of 175 GW (100 GW of solar, 65 GW of wind, and 10 GW of
biomass and small hydro) by 2022, but then boosted it to 450 GW by
2030. Of the 175 GW target, only 92 GW of solar, wind, small hydro,
and biomass had been installed at the end of 2020, according to IHS
Markit data.
IHS Markit expects the renewable generation total to be 125 GW
by the end of 2022.
India added about 1.9 GW of renewable energy capacity in the
fourth quarter of 2020, according to a 22 March IHS Markit report
by Associate Director Ashish Singla, Senior Director Rashika Gupta,
and Senior Renewable Analyst Ankita Chauhan.
In 2020, India added about 8.5 GW of total capacity, compared
with 21 GW in 2019, according to the report, a first-quarter Indian
power and renewables market briefing.
In 2021, India is expected to add about 23 GW of net capacity,
the majority of which will be renewable capacity, but supply chain
and PPA signing challenges may delay projects, the IHS Markit
analysts said in the report.
India's total installed capacity reached 375 GW at the end of
2020, IHS Markit data show.
Energy use on the rise
India is the world's third-largest energy consuming country,
thanks to rising incomes and improving standards of living,
according to the International Energy Agency (IEA).Energy use has
doubled since 2000, with 80% of demand still being met by coal, oil
and solid biomass, the IEA added.
The IEA expects solar photovoltaic generation capacity to jump
in India through 2040 as well as wind, it said in a report on
India's power sector prospects (see graph below), and coal-fired
plants' dominance to wane. By 2030, the IEA expects wind and solar
to account for 40% of total installed capacity in India.
By the end of 2019, solar and renewables constituted nearly 20%
of Indian installed capacity, according to the IEA. Under the IEA's
baseline expectations, India will add nearly 900 GW of wind and
solar capacity through 2040, with 200 GW of that wind.
Speaking at CERAWeek by IHS Markit in March, Amitabh Kant, chief
executive of the National Institute for Transforming India, said the country's energy
demand will double in the next 15 years.
Beyond 2025 and onto 2030, GWEC said the long-term drivers for
growth in the Indian wind market will be repowering of onshore wind
capacity, potential for offshore wind projects, the shift toward
carbon neutrality, and growth in the manufacturing base.