Policy stability, particularly at the state level, is a must for boosting the installation of renewables capacity, ReNew Power CMD Sumant Sinha has said.
Policy stability, particularly at the state level, is a must for boosting the installation of renewables capacity in the coming days, ReNew Power Chairman and Managing Director Sumant Sinha has said.
His comments have come against the background of Andhra Pradesh seeking to renegotiate the tariff price of concluded power purchase agreements with renewable energy developers.
Renewable energy developers as well as government nodal agencies, NTPC and SECI, have refused to do so.
“There is a policy stability issue at the state level…There is one state (Andhra Pradesh) which tried to open the concluded power purchase agreements in renewable energy recently,” Sinha said in a panel discussion at the India Economic Summit.
ReNew Power has a total capacity of over 8 GW of wind and solar power assets across the country.
Sinha was of the view that in case of such disputes, the developers have to service their loans with uncertainty, which is resolved only after the legal course which takes one or two years.
In the present scenario, the investor sentiment is low in the renewable energy sector which is evident from lukewarm response to auction for clean energy projects due to regulatory issues. Besides, the developers are also against the capping of tariff in the renewable auctions and want that discovery of tariff should be left to the markets in a competitive bidding process.
India has set an ambitious target of having 175 GW of Renewable Energy by 2022 which includes 100 GW of solar and 60GW of wind.
Seeking the government’s proactive approach, Sinha said, “Today we have a regulatory constraint. Tomorrow it could be discom financing. It could be a general financing constraint. There are connectivity issues, that absorb much power.”
He also said, “The reality is that just given the situation we have in India right now in terms of distribution companies’ financial health, the intermittency issue, implementing large projects on the ground … Given the fact that we are doing (adding) 10GW to 15 GW renewable capacity every year, at best to my mind, we can double it in the next 10-12 years like 25 GW to 30 GW every year.”
He also said, “Currently, the installed capacity is 350 GW including about 80 GW of renewables. If we are looking at power demand growth 5 to 6 percent every year then by 2020, we would be doubling the power demand, we have right now. Today we consume about 1.2 trillion units which would be 2.4 trillion units in the next 12 years (by 2030).”