The Indian Government’s aggressive policies and ambitious capacity addition targets have helped it jump to the best rank in market attractiveness in the renewable energy sector in at least about two years.
The latest edition of Ernst & Young Renewable Energy Market Attractiveness Index focuses on India as the government has not only substantially increased the capacity addition targets but also backed them with clear policy initiatives.
India has been ranked the 5th most attractive market overall. A quick glance through the archive of the Quarterly Market Attractiveness Index report shows that this is India’s best standing since at least May 2013.
India, understandably, fares best in the solar energy sector. The government had announced that it plans to increase the 22 GW capacity addition target to 100 GW by 2022. This target has been officially endorsed by the government in its first full-year financial budget.
The Finance Minister of India outlined the medium-term renewable energy capacity addition targets in the recently proposed annual budget. India now aims to have an installed renewable energy capacity of 175 GW by 2022. 100 GW of this would come from solar power, 60 GW from wind energy, 10 GW from small hydro power, and 5 GW from biomass-based power projects.
The central government has lined up auctions for projects worth 100s of megawatts of capacity. It has also launched dedicated programme to boost domestic manufacturing of solar power equipment. The move has been well received by companies around the world with leaders like SunEdison announcing a modules manufacturing unit worth $4 billion.
Additionally, several state governments have also announced ambitious renewable energy capacity addition targets and are conducting parallel auctions for solar power projects.
The report states that between 2009 and 2011 India saw significant increase in foreign investment in the renewable energy sector. This was led by foreign companies investing in the projects they had announced under the Gujarat solar power policy. The wind energy sector, too, benefited from the increased foreign interest and annual capacity addition was the highest-ever during that period.
With the change in government and policies several leading global companies are flocking to India. Massive capacity addition plans have been announced by the likes of SkyPower, First Solar, SunEdison, Gamesa, and others.