A new analysis by BloombergNEF (BNEF) says that with India’s incumbent Prime Minister, Narendra Modi, set to lead the country until May 2024, after his party won an absolute majority once again in recent elections, it is expected that a major revision of energy and electric mobility policies will follow.
BNEF says that under Mr Modi’s watch, India has become a leader in renewable energy auctions and introduced several new initiatives in energy and electric mobility as well as for cleaner air.
Mr Modi’s new government is expected to revamp existing policies in the energy and electric mobility space and create scope for promised new initiatives.
Prime Minister Modi’s Bharatiya Janata Party (BJP) won 303 out of the 543 seats in the lower house of Parliament in the recently concluded national elections, ensuring he serves as the prime minister of India for five more years.
This election win is even bigger than the one in 2014 when BJP became the only party in the previous 30 years to secure a mandate solely on its own strength.
BNEF says Mr Modi’s ambitious announcement to develop 175GW of renewable energy capacity by March 2022 caught the world’s attention in 2015.
This represented a significant shift from India’s typical reliance on coal power projects to meet the projected increase in electricity demand.
The target is unlikely to be met mostly due to slower uptake of rooftop solar projects but the ambition has benefited the renewable energy industry.
Under five years of the BJP government’s tenure, the grid-connected renewable energy capacity increased by roughly 2.5 times to 79GW from 32GW in May 2014.
BNEF says the biggest beneficiary of India’s push towards renewable energy has been the utility-scale solar sector.
The annual market size of the solar industry has surpassed all other competing sources of power generation, and it will continue to account for the largest chunk of new additions to the power generation fleet in the country.
A few new opportunities within the solar sector were also unlocked as auctions shifted to rooftops, floating solar and hybrid wind-solar projects.
All these sub-sectors will continue to grow as the government pushes to fulfil its climate change objectives.
While the government initially focused on solar, India conducted Asia’s first onshore wind auction in February 2017.
This provided a much-needed shot in the arm for the wind industry that had been stagnating at an annual market size of 2.5-3.0GW.
BNEF expects installations to average around 5.0GW of onshore wind annually until 2022.
The government sought expressions of interest for developing 1.0GW offshore wind in April 2018, drawing interest from 32 project developers, utilities, manufacturers, institutional investors and oil and gas players.
I
ndia can conduct its first offshore wind auction in the next year, although, these projects will not get fully commissioned before 2025.
BNEF says electric cars remain a small segment, with an estimated 3000 sold in 2018 compared to 3.4 million internal combustion engine cars sold in the same year.
Electrification of India’s transport sector has however begun from two and three-wheelers.
These smaller vehicles are the most popular modes of transport in the country and electric alternatives are already competitive on a total cost of ownership basis.
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