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					</table>India has made strides in expanding its renewable energy capacity over the past year, but a funding gap of over $100 billion could still derail it from meeting International Energy Agency’s (IEA) net-zero emission pathway by 2030, a report by accounting firm <a href="https://www.ey.com/en_gl" target="_blank" rel="noopener">Ernst &amp; Young</a> warns.
In the 2023-24 financial year, India added nearly 26 GW of new power generation capacity, with over 70% coming from renewable sources like solar and wind. Renewables now account for 33% of the country&#8217;s total installed energy capacity at 144 GW, while the share of coal and lignite dropped below 50% for the first time.
The report said the surge was partly fuelled by a record level of renewable energy <a href="https://www.mercomindia.com/solar-auctions-surge-2023" target="_blank" rel="noopener">auctions</a> totaling around 41 GW. Wind-solar hybrid projects and combined renewable-storage solutions comprised 37% of the awarded capacity.
India has also <a href="https://www.mercomindia.com/mnre-incentives-green-hydrogen-production" target="_blank" rel="noopener">committed</a> over $2 billion in incentives for electrolyzer manufacturing and hydrogen production projects. However, the report questioned whether the relatively low subsidies and short duration of the incentive scheme will meaningfully support the industry. So far, winners of these subsidies have focused on the export market due to domestic uncertainty around policy and pricing.
<img loading="lazy" decoding="async" class="aligncenter wp-image-67369 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture12.png" alt="RECAI index" width="659" height="626" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture12.png 659w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture12-300x285.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture12-650x617.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture12-624x593.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture12-600x570.png 600w" sizes="(max-width: 659px) 100vw, 659px" />At the same time, India slipped to rank seven from six in EY&#8217;s Renewable Energy Country Attractiveness Index (RECAI). The biannual ranking measures the world&#8217;s top 40 markets on the attractiveness of their renewable energy investment and deployment opportunities. The U.S. topped the ranking, followed by China and Germany.
Global Investments Also Fall Short
Despite a record $1.8 trillion invested globally in clean energy last year, investment levels are still insufficient to meet the goal of tripling renewable capacity by 2030 set at COP28, according to the report.
The report found that network gridlock and high capital costs could delay progress in the renewable energy transition at a time when acceleration is needed.
Energy Storage
Prices for battery storage systems, considered crucial for managing the intermittent nature of renewable sources, have plunged 59% since August 2022.
&#8220;Scaling up battery energy storage systems can help solve multiple problems holding up clean energy progress, including stabilizing and strengthening network infrastructure and enabling more distributed energy resources to connect to the grid,&#8221; said Arnaud de Giovanni, EY Global Renewables Leader.
The report noted that there could be a fall in costs of grid-scale battery energy storage systems (BESS) of around 20% to 30% across key markets by 2030 as technology improves, government subsidies increase and the slowdown in EV adoption impacts the battery cell supply chains. Volatile commodity prices and supply chain bottlenecks could offset this decline in price.
With a lot of countries heading for an election in 2024, the political landscape could likely shift during the year. Broader geopolitical factors can impact the evolution of the business case for BESS, especially if new governments renege on clean energy commitments or if wider factors influence global oil and gas prices.
EY also issued its first-ever ranking of the top markets for investing in BESS. The U.S. took the top spot, thanks to the 30% tax credit from the Inflation Reduction Act. China was second, with strong government support and plans to reduce BESS costs by 30% by 2025. The UK was third as it classified BESS as a generation asset.
India, meanwhile, came in eighth position thanks to its commitment to secure 5 GW of BESS by the end of 2024. The government is funding BESS projects with 4GWh capacity, offering up to 40% of the capital cost.
<img loading="lazy" decoding="async" class="aligncenter wp-image-67370 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture13.png" alt="Energy Storage" width="903" height="496" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture13.png 903w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture13-300x165.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture13-768x422.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture13-650x357.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture13-624x343.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture13-600x330.png 600w" sizes="(max-width: 903px) 100vw, 903px" />Corporate PPA
2024 had a slow start for corporate power purchase agreements (PPAs) globally, from a record number of around 46 GW in 2023.
Some corporates kept their next phase of PPAs on hold as the power markets were low. But now, as the energy markets gain traction, corporates are keen to lock in low PPA prices.
It was a sellers&#8217; market as there were plenty of corporates chasing too few projects at higher prices. Now, there is a major shift as buyers claim an edge in negotiations.
<img loading="lazy" decoding="async" class="aligncenter wp-image-67371 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture14.png" alt="RECAI index" width="670" height="638" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture14.png 670w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture14-300x286.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture14-650x619.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture14-624x594.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/06/Picture14-600x571.png 600w" sizes="(max-width: 670px) 100vw, 670px" />PPA prices were exorbitant in several lower-priced wholesale markets, leading to unattractive deals. The market is now seeing a correction to lower PPA prices following the markets. Lower solar equipment costs are supporting attractive PPAs, but wind costs have not come down.
India retained its ranking at 13 in the country attractiveness for corporate PPAs.

India $100 Billion Short of IEA’s Net-Zero Pathway by 2030, says EY

From: <a href="https://mercomcapital.com/project-finance-brief-sonnedix-and-cox-energy-chile/" target="_blank" rel="noopener">Mercom Capital Group</a>
Sonnedix, the global solar independent power producer, and Cox Energy América, a solar energy company, <a href="https://www.sonnedix.com/news/sonnedix-and-cox-energy-america-obtains-usd-120m-financing-for-160mw-sonnedix-meseta-de-los-andes-solar-pv-plant-in-chile" target="_blank" rel="noopener">closed</a> a $120 million financing from Sumitomo Mitsui Bank Corporation through the joint venture Sonnedix Cox Energy Chile, on which Sonnedix holds a 70%, while Cox Energy América has the remaining 30%. The financing will cover the IPP’s 160 MW development project Sonnedix Meseta de Los Andes solar PV project, in Chile. The project is located in the Valparaíso Region of Chile, in the municipalities of Calle Larga and Los Andes.
Clearway Energy, a renewable energy project developer, <a href="https://www.clearwayenergygroup.com/press-releases/clearway-completes-financing-on-its-seventh-community-solar-fund/" target="_blank" rel="noopener">closed</a> more than $195 million in debt financing for its Community Solar Fund 7 – a diversified portfolio of 12 projects totaling 71 MW that will serve commercial and industrial customers and around 3,600 residential customers across Illinois and Massachusetts. For the debt financing, Fifth Third Bank and KeyBanc Capital Markets acted as Coordinating Lead Arrangers and Joint Bookrunners, while MUFG Union Bank served as Joint Lead Arranger and Joint Bookrunner for construction and term debt financing.
Brazil&#8217;s National Development Bank has <a href="https://renewablesnow.com/news/bndes-okays-financing-for-700-mw-brookfield-solar-complex-in-brazil-741879/" target="_blank" rel="noopener">approved</a> BRL 1.47 billion (~$278 million) in financing for the 700 MW Janauba solar complex owned by a local unit of Canada&#8217;s Brookfield Asset Management. Located in Minas Gerais state, the photovoltaic complex consists of 14 solar farms. The finance, which corresponds to 72% of the total project cost of BRL 2.04 billion (~$385 million), was given to Elera Renovaveis, formerly Brookfield Energia Renovavel.
Distributed Solar Development, a commercial and industrial solar installation company, <a href="https://www.businesswire.com/news/home/20210520005342/en/DSD-Secures-85M-in-Tax-Equity-Financing-from-Bank-of-America-to-Support-Expanding-Pipeline-of-Distributed-Generation-Solar-Through-2021/?feedref=JjAwJuNHiystnCoBq_hl-Ypx8OuIA-qqxXAfOC1go22PU1fv-fCAtwybrddq94az7dI9_69nqXXndEkzoNy31peBvhKXN8xoKDPrCnMXhC58cMd5Jhr97vTYoLZQbGkSFja_QkRbjKVqSkUPuEMBEw==" target="_blank" rel="noopener">raised</a> $85 million in tax equity financing from Bank of America to support its expanding pipeline of distributed generation solar projects in the commercial and industrial market through 2021, with a sizeable portion going toward New York State Energy Development and Research Authority Value of Distributed Energy Resources assets.
NTR, a sustainable infrastructure investor and asset manager that acquires, constructs, and manages renewable energy projects, <a href="https://www.ntrplc.com/news/article/ntrs-86-mw-norra-vedbo-wind-farm-reaches-financial-close-reichmuth-infrastr" target="_blank" rel="noopener">announced</a> the €115 million (~$140 million) financial close for its 86 MW Norra Vedbo wind farm located in the county of Jönköping, in Southern Sweden. Reichmuth Infrastructure II CIP joins as co-investor into the project alongside NTR’s Renewable Energy Income Fund II, while Skandinaviska Enskilda Banken (SEB), is providing debt finance. EY acted as financial advisor to NTR on the co-investment transaction. The Norra Vedbo project consists of 20 Vestas V150 turbines, each with an installed capacity of 4.3 MW.
Private equity fund Amber Capital Armenia, supported by the European Bank for Reconstruction and Development and the European Union, <a href="https://www.ebrd.com/news/2021/ebrd-and-eubacked-fund-invests-in-armenias-renewable-energy-sector-.html" target="_blank" rel="noopener">acquired</a> Solis, an Armenian solar plant operator, to build and operate a 4 MW photovoltaic solar power plant in Aragatsotn, western Armenia. The facility is expected to be operational by the end of 2021 and generate 7.5 GWh of clean energy per year, resulting in 3,200 tons of avoided CO2 emissions annually.
ENGIE Romania, the Romanian arm of French multinational electric utility company ENGIE has <a href="https://www.engie.ro/engie-romania-a-achizitionat-un-parc-fotovoltaic-operational/" target="_blank" rel="noopener">completed</a> the acquisition of an operational PV project, with a total installed capacity of 5.46 MW, from a company owned by two German investors. The photovoltaic project is located in the southern part of Romania, in the village of Nenciulești in Teleorman County.
For reports and trackers on funding and M&amp;A transactions in solar, energy storage, smart grid, and efficiency sectors, click <a href="https://mercomcapital.com/clean-energy-reports/" target="_blank" rel="noopener">here</a>.
Read last week&#8217;s project finance <a href="https://mercomindia.com/project-finance-brief-sonnedix-raises/" target="_blank" rel="noopener">brief</a>.

Project Finance Brief: Sonnedix and Cox Energy Secure $120 Million for Solar Projects in Chile

Distribution companies (DISCOMs) in India are likely to witness to a windfall once mass adoption of electric vehicles (EVs) begins across the country, predicted a new study titled, Electrifying India: Building Blocks for a Sustainable EV Ecosystem.
“The overall EV demand is expected to help utilities earn an estimated $11 billion (~₹700 billion) in revenue by 2030,” according to the study which was jointly conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Ernst &amp; Young LLP (EY).
The overall electricity demand from EVs in India is projected to be around 79.9 GWh by 2020 and is expected to reach 69.6 TWh by 2030. The report added that increasing adoption of EVs across India will be instrumental in transforming the country’s power sector.
The surge in electricity demand from EVs will help recover the slow demand growth, the report noted.
To make the most of the shift towards EVs, DISCOMs need to develop smart grid capabilities such as <a href="https://mercomindia.com/eesl-issues-tender-5-million-smart-meters/" target="_blank" rel="noopener">smart metering</a> and vehicle to <a href="https://mercomindia.com/solar-powered-ev-charging-station-navi-mumbai/" target="_blank" rel="noopener">grid charging</a>, offer special time-of use rates for charging, explore innovative business models such as pay per use and set up independent lines for charging stations.
The arrival of electric mobility is expected to help the power and utilities sector realize net cost and revenue benefits from both demand and the supply side.  By 2030, EVs are expected to reduce emissions by 40-50 percent, compared to internal combustion engine vehicles in an aggressive renewable energy scenario, the study also predicted.
The ASSOCHAM-EY study has also called for a national regulated rate that can be applicable to all charging stations across India. The government is already in discussion to standardize charging infrastructure development in India, but are still in the planning stage.
Additionally, EV charging tariffs are regulated at some locations, while tariffs are not fixed at other locations. It is also recommended that in order to meet the rising demand of charging stations the government will have to quickly facilitate standardization of charging infrastructure and incentivize R&amp;D for advanced charging technologies.
<a href="https://mercomindia.com/ministry-of-power-no-license-ev-charge-station/" target="_blank" rel="noopener">Recently</a>, the Ministry of Power issued a clarification stating that no license is required to operate EV charging stations in India. This is positive news for the sector and is expected to boost the participation of more private players in the creation of EV charging stations across the country. “We expect the government to take active measures to streamline regulatory challenges and provide further policy impetus to drive the uptake of EVs.” It also said that while the success of India’s EV mission depends on the development and proliferation of domestic manufacturing ecosystem, the absence of an EV supply chain in the country demands an urgent investment in research and development (R&amp;D) and local manufacturing capabilities.
This decision to remove the requirement of a license for EV charging station will help in faster <a href="https://mercomindia.com/maharashtra-cabinet-electric-vehicle-policy-evs/" target="_blank" rel="noopener">acceptance of EVs</a> by the public in India. As of now, only select offices and <a href="https://mercomindia.com/bescom-ev-charging-stations-bengaluru/" target="_blank" rel="noopener">cities</a> have EV charging stations.
In the previous joint study by the Associated Chambers of Commerce and Industry of India (<a href="http://www.assocham.org/" target="_blank" rel="noopener">ASSOCHAM</a>) and global advisory firm <a href="http://www.ey.com/gl/en/services/advisory/advisory---home" target="_blank" rel="noopener">EY</a>, it was noted that EV sales in the country are expected to grow in the double digits until the year 2020.
The EV market is expected to gain momentum in the coming years as stricter emission norms are implemented on petrol and diesel vehicles. Moreover, the gradual reduction in the prices of EVs and increasing awareness among the consumers will continue to drive India’s EV market forward, the ASSOCHAM-EY report stated.
Image credit: Flickr

EV Adoption Could Generate $11 Billion for DISCOMs: ASSOCHAM-EY

India has fallen from second to fourth position on the <a href="http://www.ey.com/gl/en/industries/power---utilities/renewable-energy-country-attractiveness-index" target="_blank" rel="noopener">Renewable Energy Country Attractiveness Index</a> (RECAI) compiled by global consultancy firm <a href="http://www.ey.com" target="_blank" rel="noopener">EY</a>. The report cited investor concerns as the main reason for the country’s fall.
The 51st issue of the RECAI highlighted the trends for rising protectionism across various renewable energy sectors. Here are some important points from the RECAI report on various countries:
<ul>
<li>China is leading the latest RECAI for the third time consecutively.</li>
<li>Previously, Mercom reported that the year 2017 proved to be an outstanding one for China’s solar industry. The country added an astounding <a href="https://mercomindia.com/china-2017-solar-report/" target="_blank" rel="noopener">53.06 GW</a> in solar installations a 54 percent year-over-year (YoY) increase in terms of solar photovoltaic (PV) power capacity addition by the end of 2017, compared to 34.54 GW <a href="https://mercomindia.com/china-expected-install-whopping-50-gw-solar-2017-aecea/" target="_blank" rel="noopener">installed </a>in 2016.</li>
<li>The U.S. and Germany have overtaken India, to secure second and third place respectively.</li>
<li>Indian solar installations in calendar year 2017 grew <a href="https://mercomindia.com/indian-solar-installations-market-update/" target="_blank" rel="noopener">exponentially</a> with the addition of 9,629 MW in new large-scale and rooftop solar capacity. The installation total was more than double the 4,313 MW installed in 2016 and made 2017 the best year for solar installations in India to date.</li>
<li>The report, however, observed that India’s 2022 solar power target looks increasingly over-ambitious amid investor concerns, in response to the threat of a 70 percent tariff on imported solar panels and low power bids. “Although solar tariffs have risen slightly in Gujarat’s latest auction, aggressively low bids in 2017 wind and solar auctions now seem unsustainable. The threat of solar import tariffs and disputes between developers and distribution companies are raising investor concerns,” the report noted.</li>
<li>In January 2018, President Trump <a href="https://ustr.gov/sites/default/files/files/Press/fs/201%20Cases%20Fact%20Sheet.pdf" target="_blank" rel="noopener">revealed </a>the much-anticipated anti-dumping <a href="https://mercomindia.com/trump-imposes-antidumping-solar/" target="_blank" rel="noopener">tariffs</a> on imported solar cells and modules at 30 percent for the first year, which will gradually decline in five percent increments over a four-year period to 15 percent by 2022. The first 2.5 GWs of solar cells and modules will be exempt from tariffs.</li>
<li>However, RECAI points to the resilience of the U.S. market, which climbed from third to second position as solar tariffs are mostly absorbed and wind projects are not subject to subsidy cuts under the recently passed U.S. tax reform bill.</li>
<li>The United Kingdom (U.K.) climbed three places to seventh with the market adapting to subsidy-free solar PV, onshore wind projects, and the repowering of older wind farms.</li>
<li>The rapid expansion of the renewable energy sector in the Netherlands helped it climb from 15th to 9th spot.</li>
<li>Re-entering at 31st position, Taiwan has returned to the top 40 for the first time in two years as the government announces its intention to go nuclear-free and takes action to increase renewables to 20 percent by 2025.</li>
</ul>
The bi-annual RECAI ranks 40 countries on the attractiveness of their renewable energy investment and deployment opportunities. The index was recalibrated in early 2018, with all underlying datasets fully refreshed, according to EY.
Image credit: Azure Power

EY Report: India Slips to Fourth Position on Renewable Energy Country Attractiveness Index

Electric Vehicle sales in the country are expected to grow in the double digits until the year 2020, according to a joint report by the Associated Chambers of Commerce and Industry of India (<a href="http://www.assocham.org" target="_blank" rel="noopener">ASSOCHAM</a>) and global advisory firm <a href="http://www.ey.com/gl/en/services/advisory/advisory---home" target="_blank" rel="noopener">EY</a>.
The EV market is expected to gain momentum in the coming years as stricter emission norms are implemented on petrol and diesel vehicles. Moreover, the gradual reduction in the prices of EVs and increasing awareness among the consumers will continue to drive India’s EV market forward, the ASSOCHAM-EY report stated.
In the study titled Electric Mobility in India: Leveraging Collaboration and Nascency, it was highlighted that the EV sector, which is still in its nascent stage in the country, could be a stepping stone in designing an intelligent transport infrastructure for the country.
Currently, the EV industry comprises less than one per cent of the total vehicle sales and is dominated by two-wheelers (95 percent), according to the report.
Calling attention towards the lack of proper and sufficient charging infrastructure for the EVs, the study said, “The required need at this point in time is the presence of related support industry and infrastructure as it will help the charging infrastructure thrive. We expect the government to take active measures to streamline regulatory challenges and provide further policy impetus to drive uptake of EVs.”
However, according to the report, home charging would continue to occupy a dominant part of charging infrastructure with a share of nearly 70 percent in the year 2030. “There is a growing need for a nationally regulated rate that can be applicable to all charging stations across India,” added the study.
Mercom has previously <a href="https://mercomindia.com/electric-vehicles-opportunity-india/" target="_blank" rel="noopener">reported</a> that India’s EV market is slowly gaining momentum after three years of relative inaction.
To expand the consumer base of EVs in the country, the Indian government launched the National Electric Mobility Mission Plan (NEMMP) in 2013 with an investment of approximately ~$3 billion (~₹192.8 billion) to promote hybrid and EVs.
India is currently <a href="https://mercomindia.com/india-plans-deploy-seven-million-electric-vehicles-2020/" target="_blank" rel="noopener">targeting</a> the deployment of five to seven million EVs in the country by 2020 under the NEMMP. Though the country still lags behind other nations when it comes to EVs, several states have stepped in to develop their own policies to promote EV adoption.
In the recent past, <a href="https://mercomindia.com/karnataka-procure-640-electric-vehicles/" target="_blank" rel="noopener">Karnataka</a> and <a href="https://mercomindia.com/maharashtra-cabinet-electric-vehicle-policy-evs/" target="_blank" rel="noopener">Maharashtra</a> launched their own EV policies that provide various subsidies and incentives to consumers.
Recently, ABB, a charging infrastructure provider, installed electric vehicle fast charger station at NITI Aayog in the national capital. In November <a href="https://mercomindia.com/niti-aayog-electric-vehicle-charging-infrastructure-delhi/" target="_blank" rel="noopener">2017</a>, NITI Aayog had released a proposal to develop electric vehicle (EV) charging infrastructure in Delhi drafted by <a href="https://en.ac2sg.com/" target="_blank" rel="noopener">AC2SG</a>, a Finland-based Smart Grid Software solutions provider, in collaboration with <a href="http://niti.gov.in/" target="_blank" rel="noopener">NITI Aayog</a>.
Image credit: Flickr

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