The Indian power sector (including both traditional and renewable) has managed to add more new capacity in the FY20 than the previous fiscal year in the face of some challenges.
For the third year in a row, the renewable sector has added more new capacity than the traditional energy sector, and the clean energy sector now accounts for nearly one-fourth of the total installed energy capacity in the country.
Total capacity addition of conventional and renewable segments was 15,776 MW in 2019-20 compared to 14,204 MW in 2018-19.
For 2019-20, the traditional sector (including coal-fired and hydro categories) has installed a new capacity of 7,065 MW, up 25% from 5,672 MW in 2018-19. In this respect, the coal-fired sector added a net capacity of 6,765 MW compared to 5,532 MW in 2018-19. Hydro segment added 300 MW compared to 140 MW in FY19, according to data from the Central Electricity Authority.
Total installed capacity in the renewable energy market was 8.711 MW in 2019-20, compared to 8.532 MW in 2018-19. However, in these periods, both conventional and clean energy segments have failed to meet the additional capacity targets due to a number of challenges faced by the respective sectors.
While the renewable energy sector achieved only 74% of the target (11,802 MW) for 2019-20, the recent addition of the traditional segment to the FY20 was only 58% of the target (12,186 MW) for the fiscal year.
Renewables on the rise
Although the Indian power sector continues to be dominated by conventional energy sources (coal, diesel, gas, nuclear and large hydro) accounting for nearly three-quarters of the country's installed power generation capacity, there has been a gradual shift to renewable sources (wind , solar, bio and small hydro).
Over the last five years, the share of renewable energy (wind , solar, bioenergy and small hydro) in installed capacity has increased from 11.8% (32 GW in March 2015) to 23.5% (87 GW in March 2020). On the other hand, according to analysts at CARE ratings, the share of thermal sources of coal in installed capacity has been declining — from 61% to 54%—over this period.
As of 31 March 2020, India's total installed capacity (including thermal, nuclear, hydro and renewable) was 3.70.317 MW. The share of the coal-fired segment was 1,98,734.5 MW, while the share of renewable energy sources was 87,028 MW. Although the gap is wide, renewable energy is the second largest segment in total capacity after the coal-fired group.
Although the western region has a coal-fired capacity of 72,935 MW, the southern region has a renewable capacity of approximately 42,400 MW.
The country's power sector has been affected by the ongoing downturn in the Indian economy. The potential economic disruption caused by the coronavirus pandemic will add to the sector 's weakness. As a result, India 's performance in the power sector is expected to see a significant decline in 2020-21, CARE Ratings analysts said.
