Loading...

New global boom era beckons for renewables


07 March 2021 | BRIDGE TO INDIA

New global boom era beckons for renewables

The new US Energy Secretary, Jennifer Granholm, has signalled a transformational shift in the country’s energy policy to combat global warming. In her first public speech in the new role, Granholm announced that the US would install “hundreds of gigawatts” of clean energy capacity in the next four years to meet its climate targets. Granholm is aiming to gradually shut down oil & gas production to accelerate energy transition. She has also directed investment amounting to “billions of dollars” with revival of a USD 40 billion government loan programme, defunct under the previous government, towards clean energy technology innovation.

  • Besides the US, China, Japan and EU have announced radical new climate action goals and thrust on clean energy technologies;
  • We expect global renewable power capacity addition to jump by about 40-50% over the next 2-3 years to over 300 GW per annum;
  • The expected boom would throw open new opportunities and challenges for the Indian market;

The comments were made by the Energy Secretary at an industry conference this week. Formal policy announcements are still awaited. But the roadmap is becoming clearer after the US re-joined Paris Climate Agreement in January 2021. The US plans to achieve 100% carbon-free power generation by 2035 and carbon neutral status by 2050.

Other major economies including China, Japan and the EU have made similar bold announcements recently. Last month, China released its draft national renewable energy targets for 2030 with share of non-hydro renewable power expected to grow to 25.9% from 12.7% in 2021. Provisional calculations suggest addition of total solar and wind power capacity of a staggering 1,600 GW by 2030, or about 160 GW per annum. Subsequent to announcement of aiming to achieve net-zero status by 2060, China is now focusing on green and low-carbon circular economic development with reliance on locally developed technologies, creation of “green communities” and “zero-carbon cities.” Meanwhile, Germany, the largest economy in the EU, plans to add 48 GW solar capacity by 2030.  

Figure: Total installed capacity and penetration

Source: GWEC, BNEF, AECEA, MNRE, Germany’s federal network agency, BRIDGE TO INDIA research

These are all stunning announcements and herald a new boom era for renewables. Global capacity addition could plausibly jump by about 40-50% over the next 2-3 years to cross 300 GW per annum. The boom would mean more capital flows into the sector, more innovation in technology and faster trajectory for reduction in costs.

This is all good news for the Indian market. But as more countries strive to attract investments, India would need to improve its game to stay relevant. Inconsistent policy regime, implementation snafus and failing distribution utilities need to be tackled immediately. Moreover, there is a real danger that as other countries invest aggressively in R&D and deployment of new technologies, ‘Make in India’ could become more forbidding. In the short-term, there is also a risk of equipment prices further firming up in line with the trend over the past few months.


Recent reports

India PV Module Intelligence Brief | Q1 2023

India PV Module Intelligence Brief | Q1 2023

This report captures quarterly trends in module demand and supply, import and domestic production volumes, supplier market shares, break-up by technology and rating, pricing trends across the value chain, key international developments and short-term market outlook.

India Corporate Renewable Brief | Q1 2023

India Corporate Renewable Brief | Q1 2023

This report provides an update on key trends and developments in the corporate renewable market including capacity addition, key players, policy issuances, financing, equipment prices and other market trends.

India Solar Compass | Q1 2023

India Solar Compass | Q1 2023

This report provides a detailed update of all key sector developments and trends in the quarter – capacity addition, leading players, tenders and policy announcements, equipment prices, financial deals and other market developments. It also provides market outlook for the next two quarters.

Facilitating Growth of Corporate Renewable Market

Facilitating Growth of Corporate Renewable Market

India’s corporate renewable market is benefitting from strong growth drivers in the form of rising RPO target, ambitious decarbonisation agenda and attractive cost saving potential. But while corporates account for 50% of total power consumption in the country, their direct procurement accounts for only 27% share of renewable power capacity. Figure: Total renewable power capacity split by...

India Residential Rooftop Solar Market 2023

India Residential Rooftop Solar Market 2023

India’s residential rooftop solar market, long held back by low consumer awareness and poor economic viability, is showing encouraging signs of growth. With less than 1% of urban households having adopted residential rooftop solar so far, the market represents huge growth potential.

Pumped storage projects – a bright future

Pumped storage projects – a bright future

Large scale deployment of intermittent renewable power requires storage solutions to address imbalances between supply and demand, and more ancillary services. Battery energy storage systems (BESS) are gaining popularity worldwide but their near-term deployment potential in India is limited by several challenges.

To top