JMK Report Highlights Growth and Investment in India's RE Sector in 2024

JMK Research and Analytics has released its July 2024 monthly re-update report, revealing growth in India’s renewable energy (RE) sector. India issued 5,937 MW of new RE tenders, primarily for solar and hybrid projects.

As per the report, India’s cumulative installed renewable energy capacity reached 195 GW, as of July 2024. In the first half of 2024 alone, the sector added over 12,150 MW of solar and 1,920 MW of wind capacity, reflecting a robust growth trajectory. Solar energy continues to dominate the RE landscape of the country with an installed capacity of around 117 GW, accounting for approximately 60 percent of the total installed capacity, according to the Ministry of New and Renewable Energy (MNRE). It is projected to reach 300 GW by 2030 if current trends persist.

The total renewable energy generation in the country reached 23,456 million units (MU), marking a 12 percent increase compared to June, 2024. Favourable weather conditions, particularly during the monsoon season, contributed to this rise, with solar energy production showing a significant uptick. The generation mix for July included approximately 15,000 MU from solar, 5,000 MU from wind, and the remainder from biomass and hydropower sources.

Large-scale solar parks have played a key role in driving the Indian solar sector, proving to be both cost-effective and efficient. The Solar Energy Corporation of India (SECI) reported that the average cost of solar power has dropped to around INR 2 per kWh, making it one of the cheapest sources of energy in the country.

Investment in the renewable energy sector remained strong, with USD 1,061 million raised in July 2024. Notably, SAEL Group issued a USD 305 million green bond to finance renewable projects. This shows a growing investment trend from both domestic and international investors toward India’s clean energy transition. The trend is poised to continue. JMK Research projects that the Indian renewable energy sector could attract over USD 24 billion in investments by 2030, driven by the government’s ambitious targets and the increasing demand for clean energy. The sector is expected to add 20-25 GW of new capacity annually, with solar and wind being the primary contributors.

The Green Term-Ahead Market (GTAM) saw increased trading volumes in July 2024, reflecting rising interest in renewable energy certificates and a shift toward sustainable energy sourcing. GTAM recorded a trading volume of 1,200 MW, a jump from the previous month, indicating greater participation from utilities, corporate buyers, and renewable energy developers. The GTAM has promoted transparency and efficiency in renewable energy transactions, contributing to the overall growth of the sector.

Solar module prices showed a slight decline in July 2024, thanks to increased manufacturing capacity and competition among suppliers. The average price of solar modules dropped to around INR 25,000 per MW, down from INR 30,000 per MW the previous year. 

The Indian solar manufacturing industry is also experiencing developments, with companies like Rays Power Infra and IndoSolar Limited expanding their production capacities. Rays Power Infra established a wholly-owned subsidiary to produce solar modules, solar cells, and battery energy storage systems (BESS) on a GW scale. Meanwhile, IndoSolar inaugurated a new solar module factory in Noida with a production capacity of 1.3 GW.

The Indian government has set a target of achieving 20-25 GW of renewable energy capacity in the Iron and Steel sector by 2030, as part of a broader effort to decarbonise energy-intensive industries and promote clean energy sources. The Ministry of Steel has outlined a roadmap to reduce emissions to 2.4 tons of CO2 per ton of crude steel (tCO2/tcs) by 2030, with a long-term goal of achieving net-zero emissions by 2070.

Recent policy updates aim to streamline the approval process for new renewable energy projects and enhance incentives for investment in renewable technologies. The government has also introduced financial support mechanisms for biomass pellet manufacturing plants, expected to boost the utilisation of the country’s substantial biomass resources.

Despite these positive developments, the report highlights that the Indian renewable energy sector faces several challenges. The need for substantial investments in energy storage solutions is critical, as India requires approximately 74 GW of energy storage capacity by 2032 to support its growing renewable energy infrastructure. Currently, India has only 100 MW of battery storage and 3.3 GW of clean energy storage from hydropower. Furthermore, the sector must address issues related to grid integration, land acquisition, and regulatory hurdles to ensure the smooth implementation of renewable energy projects. However, the increasing focus on green hydrogen and carbon capture technologies presents significant opportunities for innovation and growth in the sector. 

While the solar output of India increased by about 14.7 percent compared to the same period last year, India saw its solar power generation growth slow down in the first half of 2024, marking its slowest pace in six years as the country relied more on coal to meet rising energy demands. The coal-generated electricity grew by 10.4 percent.

The Indian Iron and Steel industry is moving towards decarbonisation, with plans to expand renewable energy capacity from 850 MW to over 8,500 MW by 2025. The industry is also exploring green hydrogen and carbon capture technologies, with a target to reduce emissions significantly by 2030.