India Targets 21% Power Consumption from Renewable Energy by 2022

Like China, India also aggressively revised its renewable energy targets.  The latest policy decision comes from the Ministry of Power in India that sets out an ambitious new target for the share of renewable energy in the country’s electricity consumption.

The Ministry of Power, Government of India, issued order no. 23/03/2016-R&R dated 14 June 2018 stating the revised Renewable Purchase Obligation (RPO) targets at the national level.  As per the order, the country has target of 21% share of renewable energy in its total electricity consumption by March 2022.

The order also sets targets for each financial year between 2019-20 and 2021-22.  Targets for 2016-17 to 2018-19 have already been specified in a similar order issued 22 July 2016.

Evolution of India’s RPO trajectory
Over the last few years, India has aggressively increased its RPO targets as it has also increased its capacity targets.  Until May 2014, India had set a target to have 15% of total electricity consumption from renewable energy sources by March 2022.  The share of solar power was envisaged at 3%, which was inclusive of the 15%.  The solar power capacity target was 22 gigawatts by March 2022.

After the current government came to power, the solar RPO target was increased to 8% by March 2022, and installed capacity target was increased by nearly five times to 100 gigawatts.  A detailed timeline for auctions and commissions of projects was issued last year to help the federal as well as state agencies to match their own targets with the national targets.

Now, the latest revision notified by the Ministry of Power will require states to revisit their current trajectory and realign them to the national targets.  The jump in non-solar RPO target is insignificant — 10.25% in 2018-19 to 10.50% in 2021-22.  However, the jump in solar RPO target is massive — 6.75% in 2018-19 to 10.50% in 2021-22.

While India continues to set aggressive renewable energy procurement targets at the federal level states have been rather slow to adapt.  According to CARE Ratings, only six of the 29 states have aligned their own targets as per the national guidelines for FY2018-19.  This is one of the reasons that the Ministry of New and Renewable Energy was forced to create a new body to check RPO target compliance of states.

There have been cases earlier when obligated entities failed to meet RPO target due to lack of adequate supply of solar power or other renewable power.  To address this, the order states that at least 85% of the target, in each category, must be fulfilled.  The balance 15% obligation can be met from other renewable power, in case of any shortfall from the original source.

At the end of FY2017-18, the share of renewable power generated in total power consumed in India was around 8.5%.  The share of renewable power consumed would slightly lower given the transmission losses.  The cumulative RPO target for FY2017-18 was 14.25%.

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