According to a report released by Ernst & Young, India has moved up a notch to second place in the Renewable Energy Country Attractiveness Index. China retains the top spot as India moves up from third place to take up US’s position as the second most attractive country when it comes to renewable energy.
This, according to the report, is the result of strong government support to renewable energy as well as improving and alluring economics. The statement from EY says that India continues its upward trend in the index and moves up to second place, supported by the governments program to deploy 175GW in renewable energy generation in the next five years, i.e. by 2022. The targets also include renewable energy to have 40% of installed capacity by 2040. Starting from a base of 2.4GW in 2014, India has added an installed capacity of 10GW since then.
As renewable energy penetration rates increase in the medium term, the government will need to turn its attention to the ability of India’s grid to manage intermittent renewables, especially around the evening, when solar availability diminishes.” – Somesh Kumar, Partner & Leader, Power & Utilities, Ernst and Young
In addition, the report also raised a point related to compliance with Renewable Purchase Obligation (RPO), which needs to be increased, to ensure, that India’s distribution companies, which are in financial distress, continue to have the capacity to purchase renewable energy, especially if bid prices level off or rise.
India’s regulators must be mindful of erosion of electricity market peaks caused by growing volumes of renewable and storage, which can undermine the economics of thermal power plants, risking the stability of the system as a whole. Cost and availability of energy storage technology will also dictate how close India gets to meeting its renewable energy targets…” – Somestriesh Kumar, Partner & Leader, Power & Utilities, Ernst and Young
The report further said that the government needs to ease rules related to foreign funds, which need to be tapped to set-off the concerns around capital availability. Also, though the governments emphasis on photo voltaic (PV) parks will help plug the gap, more needs to be done to encourage roof top installations.
Availability of economically viable renewable energy alternatives along with mitigation of supply concerns is motivating more countries to participate in clean energy future. Three countries who have entered the Top 40 in the index include Kazakhstan, Panama and Dominican Republic on 37, 38 and 39 position respectively.
Source: Media Reports (Economic Times, EY Report)