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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

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

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