The head of one of the largest clean energy providers said India’s plans for a sharp increase in renewable energy auctions will put “a lot of pressure” on the industry to scale quickly.
India will begin selling 50 gigawatts of solar and wind power to the country’s electricity grid annually until 2028, more than double the current pace.
Sumant Sinha, CEO of ReNew, welcomed the proposal outlined by India’s Ministry of Renewable Energy. But he noted that renewable energy companies are already overwhelmed trying to keep up with the current business.
He told the Financial Times in an interview. “It’s not all easy.”
The planned increase comes as India races to meet its ambitious target of installing 500 gigawatts of clean energy by 2030, in order to meet 50 percent of the country’s electricity needs from renewables.
“This is the first step in terms of trying to make the seriousness of the 500 gigawatt goal more credible and realistic,” Sinha said. “It can be done but we’ll need a little time to ramp up.”
ReNew has commissioned about 8GW of capacity and has committed to building approximately 6GW more over the next two years. “Market opportunities are not a problem,” said Sinha. “It has always been a question of how much we can implement, rather than anything else.”
India still sources most of its energy from coal and other fossil fuels, and the International Energy Agency estimates that the country’s energy demand will be among the fastest growing in the world through 2030.
While Prime Minister Narendra Modi’s government wants clean energy sources to meet much of that demand, the country has so far struggled to keep up with its targets and failed on a plan to install 175 gigawatts by last year.
A note from the Ministry of Renewable Energy said the government plans to sell at least 15 GW by June this year, followed by 10 GW to 15 GW for the remaining quarters of the year. “It’s a very short-term goal, so we’ll have a good idea if they’re going in the right direction or not,” Sinha said.
ReNew is expanding into other areas, and last week secured government subsidies worth about $180 million as part of a program to boost domestic manufacturing of solar cells, wafers and modules.
Other companies investing billions in renewable energy besides ReNew include Tata Power and Adani Green, part of the Adani Group conglomerate.
Adani says it wants to reach 25 gigawatts by 2025. But the group’s expansion plans have come under pressure after allegations of fraud by US short seller Hindenburg Research earlier this year led to a market rout that wiped out as much as $145 billion. of the value of its listed companies, which include Adani Green. Adani strongly denies these allegations.
While Al-Adani said he is committed to investing heavily in renewables and other areas, some analysts have questioned its ability to keep up.
Sinha said India would struggle to maintain the pace of renewables growth without Adani.
“Just looking at it from a capacity-only perspective, they’re one of the biggest players, and they have significant plans to add more capacity,” he said. “If a downturn occurs, it will certainly affect the capacity increase in the country as a whole.”