Month in a Minute: Top Headlines from the Indian Renewable Sector in October 2023

Companies shaking up the Indian solar market in 1H CY 2023


Here is a recap of important headlines from October 2023:

Mercom’s India Solar Market Leaderboard 1H 2023 unveiled solar market leaders in the first half of the calendar year 2023, with several Indian companies securing spots in the top ten rankings for the first time. Adani Green Energy emerged as the leading utility-scale solar project developer during the first half of 2023, with the most extensive solar project portfolio as of June 2023. Tata Power Solar led rooftop installations for 1H 2023, closely followed by Havells India. During the first half of the year, LONGi Solar took the top spot as the leading module supplier to India.

The Ministry of Power issued a notification amending the Energy Conservation Act of 2001 to introduce minimum renewable energy consumption targets for designated consumers until the financial year 2029-2030. This amendment is set to come into force on April 1, 2024. Until then, the earlier renewable purchase obligation (RPO) will remain in force. The new and old RPOs have the same total target. However, there is no energy storage obligation in the new RPO. The new RPO includes a distributed renewable energy component, which the earlier one lacked.

The Ministry of Power proposed slashing the Renewable Generation Obligation (RGO) for coal or lignite-based power generating stations to a minimum of 6-10% from the previous 40%. The Ministry issued a draft notification on RGO to establish a minimum requirement for electricity generation from renewable sources for coal or lignite-based power generating stations. Earlier rules mandated that coal or lignite-based generating stations beginning operation on or after April 1, 2023, must either establish or procure renewable energy equal to 40% of their thermal generation capacity.

The Solar Energy Corporation of India paid solar and wind power producers ₹13.04 billion (~$156.6 million) for the energy purchased in September 2023. The payment reflected an increase of 7% from the August disbursements. The disbursements increased by 46% on a year-over-year basis. In September, disbursements to solar and wind developers constituted 83.3% of the total payments made. The nodal agency disbursed a total of ₹15.26 billion (~$183.3 million)  during the month.

The Ministry of New & Renewable Energy and the Ministry of Coal announced they would work together to promote green energy initiatives. At a meeting between these ministries, it was decided that MNRE will provide essential technical, policy, and capacity-building support. The Coal Ministry will offer land capital and oversee the implementation of projects related to solar energy, green hydrogen, and other renewable energy programs. A notable outcome of the meeting was the offer to make surplus coal companies’ land available for private investors interested in establishing green hydrogen projects.

The Ministry of Power warned the states against levying extra fees on producing electricity from different sources in the guise of development fees or charges. It clarified that such supplementary charges, including any form of taxation or duty imposed on electricity generation, covering all types of generation such as thermal, hydro, wind, solar, and nuclear, are illegal and violative of the Constitution. The Ministry had addressed this legal stance in a letter dated April 25, 2023, specifically concerning some states’ imposition of water tax or cess.

Global corporate funding in the energy storage sector witnessed a 31% YoY decrease during the first nine months of 2023, with a total of $15.2 billion raised across 94 deals. This contrasts with the $22 billion secured by the sector through 93 deals in the same period last year. The findings were revealed in Mercom Capital Group‘s recently released report titled 9M and Q3 2023 Funding and M&A Report for Storage and Grid. Venture capital funding in the sector saw a substantial 115% YoY boost in 9M of 2023, with $8.6 billion across 68 deals.

The total global corporate funding in the solar sector during the nine months of 2023, including venture capital investments, public market funding, and debt financing, reached $28.9 billion, a 55% YoY increase from $18.7 billion. The numbers were revealed in Mercom Capital Group’s newly released 9M and Q3 2023 Solar Funding and M&A Report. Despite the surge in funding amounts, there was a 5% YoY decline in the number of deals. During 9M 2023, 124 deals were announced against 131 deals during the corresponding period in 2022.

Solar power project tenders floated by multiple implementing agencies in India rose 5% YoY to over 13 GW during the third quarter of the calendar year 2023, according to Mercom India Research. Tender announcements were flat QoQ from July to September. The pace of tender announcements has failed to accelerate even after the government issued the 50 GW renewable energy trajectory target for financial years 2024-28. Solar auctions during the quarter witnessed an increase of 86% YoY, with 7 GW projects auctioned. The increase was, however, a marginal 4% compared to the previous quarter.

The Ministry of New and Renewable Energy unveiled a ₹4 billion (~$48.12 million) Research and Development Roadmap for the National Green Hydrogen Mission, seeking to develop an ecosystem that can help commercialize green hydrogen. The roadmap aims to advance fresh materials, technologies, and infrastructure to enhance green hydrogen production, storage, and transportation efficiency, reliability, and cost-effectiveness. It also seeks to prioritize safety and tackle technical obstacles and hurdles in establishing a hydrogen-based economy.