India has a well-developed power and RE industry, with numerous mature players.
It has consistently ranked among the top 10 in BNEFs Climatescope (securing the top spot in 2021), which testifies to its attractiveness as a hub for energy transition investments.
Due to its natural geographic advantages, India has among the world's lowest renewable energy production costs, across solar, onshore wind, hybrids, and green hydrogen.
Its baseload RE (hybrids) is already cheaper than thermal power on full cost. In the next 5-7 years, it is expected to be cheaper in operating cost measures too.
Most public DISCOMs are loss making and are under heavy financial stress. They have over USD 100 billion in debt / payables.
India's power market structures lack depth. Wholesale market share is only about 10%; there is no ancillary services market; incentives for peak-load plants are inadequate, and time-of-day tariffs lack granularity.
To fulfill growing demand, India needs to add 20-30 GW annually over the next decade, compared to 10-12 GW currently.
From 155 GW to
Non-fossil fuel & Renewable Generation Capacity by 2030
|From 250 GW to
Fossil fuel & Non-Renewable Generation Capacity by 2030
From 25 GW to
Renewable Equipment Manufacturing Capacity by 2030
|From Nil to
Green Hydrogen Manufacturing Capacity by 2030
From Nil to
Electrolyser Manufacturing Capacity by 2030
Private players can deepen power markets by expanding power derivatives and futures for risk mitigation. They can leverage a) demand-side flexibility by speeding the adoption of consumer time-of-day tariffs and EV charging and b) supply-side flexibility by enabling existing coal and hydro plants to blend RE into existing PPAs.
In addition, they can launch ancillary services and capacity markets as well as incentivize underutilized plants to participate in such markets.
Key actors: Credit bureaus and public credit registry
Power sector companies could tap into additional funding for energy projects via new-age products such as InvITs and green bonds. They can also de-risk power projects by leveraging an expanded portfolio of insurance and guarantee products.
Key actors: Banking sector, potentially under the Indian Banks' Association
Leveraging policy and economic support, companies could set up giga-factories for PV modules, storage, electrolyzers, etc. They could also secure their supply chain by acquiring or developing upstream assets (such as lithium mines or polysilicon processing plants).
Key actors: Major energy players
India Inc. could accelerate India's green energy transition by working with the government to earmark green energy hubs (at ports or industrial centers), mandating hydrogen usage in select use cases, and establishing standards for hydrogen electrolyzers, fuel cells, and embedded products (green steel, fertilizers, etc.).
Key actors: Energy players, in collaboration with central and state governments
The scope of existing bodies such as IREDA could be expanded to shape a Central Renewable Energy Planning and Monitoring Agency.
This agency could identify attractive land pockets (especially wasteland) for geospatial analysis and satellite imaging, create a data bank of solar and wind potential, facilitate discussions to debottleneck projects with the Hon’ble Power Minister, and aggregate land in a solar-park model (or facilitate acquisition by private players).
Key actors: Ministry of Power, IREDA
To nurture the development of emerging technologies, the government could provide better visibility to project pipelines, mandate update of new technologies, and offer incentives (linked to production or performance.
Key actors: MNRE, Ministry of Power, and state regulators
The government could promote recycling and second-life use of batteries and PV modules, implement Extended Producer Responsibility, establish second life-usage standards, incorporate material recycling as part of ESG goals, and set up recycler plants.