Solar Was the Top Source of New Power Capacity Addition in 2017 For the First Time in India

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Solar was the leading source of new power capacity additions in the calendar year 2017 with installed capacity of approximately 9.5 GW accounting for 45 percent of total power capacity additions. Wind was the second most installed power source with 19.6 percent followed by coal at 18.9 percent. Solar and wind together made up for almost 65 percent of new capacity added.

This is the first-time coal was over taken by any other source of energy in terms capacity addition in a single year, reflecting a fundamental shift in India’s power mix as the country continues its transition from fossil fuels to cleaner sources of energy.

Installations share of coal declined significantly from 62 percent in 2016 to just 19 percent in 2017. Lack of power demand was also a factor for lower coal installations.

Renewable energy capacity additions continue to gain momentum in India and now accounts for 19.4 percent of India’s capacity mix, according to data compiled by Mercom India Research.

This is a substantial increase from the previous 17.5 percent share reported in May 2017. The country’s total installed generation capacity stands at approximately 336 GW, of which 65 GW are renewables.

Mercom also found that total hydro power generation in India stands at about 45 GW and accounts for 13.4 percent of the country’s energy mix. While the installed capacity of hydro rose, its share of the overall generation mix decreased by a few percentage points.

Nuclear power has a total capacity of 6.8 GW and comprises approximately 2 percent of the energy generation mix.

Solar power is witnessing a rapid pace of installation activity as its cost declines. In the recently concluded Bhadla Solar Park Phase-III auctions, solar power was cheaper than thermal power with a quoted tariff of ₹2.44 (~$0.038)/kWh.

According to Mercom’s India Solar Project Tracker, solar now accounts for approximately 19.5 GW (preliminary figures) of total installed capacity and 5.79 percent of total installed capacity. The pace of solar capacity additions were remarkable in the past year with many new projects being commissioned.

Wind currently accounts for 33 GW of total installed capacity and 9.8 percent of overall power generation. After the success of a second wind auction of 1,000 MW, SECI recently brought out another 2,000 MW wind tender and increased the pipeline of new wind projects planned for 2018.

Meanwhile, the installed capacity of small hydro has increased slightly to account for 4.4 GW of total installed capacity.

Despite the increase in renewable capacity addition, coal-fired capacity still dominates and accounts for 57.4 percent of India’s total installed capacity. The total for all thermal power – which includes coal, gas, and diesel generation – stands at over 64 percent. Recently, tenders for thermal power projects have been scuttled as the government focuses on renewables. In the coming years, thermal is expected to play a supporting role to renewables as a source of baseload power until battery storage becomes viable.

According to Mercom India Research, the share of renewable energy in the country’s installation mix rose exponentially in 2017. On December 31, 2016, renewables accounted for 52 GW of capacity and accounted for 16.2 percent of the country’s capacity mix. As of December 31, 2017, renewables accounted for 65 GW and a 19.4 percent share, an increase of about 28 percent.

Solar is witnessing the fastest growth in its percentage share of total renewable capacity. Solar jumped from a 19.5 percent share in the renewable energy mix on December 31, 2016, to a 29.8 percent share on December 31, 2017.

 

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