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

India added 13 GW of solar capacity in 2022, compared to 10.2 GW in 2021


Here is a recap of important headlines from February 2023:

India added 13 GW of solar capacity in the calendar year (CY) 2022, a 27% increase year-over-year (YoY), compared to 10.2 GW installed in CY21. India’s cumulative installed solar capacity now stands at 63 GW, according to Mercom India Research’s newly released 2022 Q4 & Annual India Solar Market Update. Large-scale solar projects accounted for 87% of installations and saw a 33% surge YoY in CY22.

Union Finance Minister Nirmala Sitharaman laid out an expansive budgetary outlay for expediting green transition, identifying ‘Green Growth’ as one of the seven pillars for Budget 2023. The budget proposed capital investments of ₹350 billion (~$4.28 billion) for green energy transition, net-zero objectives, and energy security. Additionally, it extended the Basic Customs Duty (BCD) exemptions on several items, including lithium-ion batteries for electric vehicles.

The Union Minister of Power and New and Renewable Energy, R.K. Singh, said that the government has decided to relax the Approved List of Models and Manufacturers (ALMM) for two years. The minister said the fledgling domestic manufacturing capacity is insufficient to cater to the large solar capacity addition pipeline, which could have jeopardized the goal of reaching 280 GW by 2030 from just over 60 GW currently. He added that the country would take seven years if the entire module supply came only from domestic manufacturers.

The Central Electricity Authority (CEA) proposed that power transmission lines of up to 33 kV voltage level passing through the Great Indian Bustard (GIB) area should be underground lines. Power transmission lines above 33 kV voltage level passing through the GIB area should be overhead lines installed with bird flight diverters. The regulations will apply to generating companies, transmission licensees, distribution licensees, central transmission utilities, and state transmission utilities that own, operate, or maintain electric lines in the GIB area.

The Ministry of New and Renewable Energy (MNRE) extended the deadline for compliance with the Quality Control Order, 2017 for solar photovoltaic inverters until June 30, 2023. The self-certification deadline extension was provided due to the limited availability of test facilities. According to the notification, the manufacturers should have valid International Electrotechnical Commission (IEC) certificates and test reports from accredited test labs for the smooth implementation of the order.

Gujarat emerged as an overwhelmingly favorite destination for domestic manufacturers, accounting for more than half of the country’s module-making capacity and roughly 30% of cell manufacturing capacity, according to Mercom’s State of Solar Manufacturing in India report released last month. The state has benefited from friendly industrial policies through expedited and simpler compliance procedures and competitive electricity tariffs.

The Central Electricity Regulatory Commission (CERC) issued new guidelines to supplement the Deviation Settlement Mechanism Regulations 2022 to maintain grid security. The Commission has added a new category of wind-solar generators and introduced charges for DSM. Further, it has also hiked monetary incentives for both generators and procurers to maintain the grid frequency between the safe range of 49.95-50.05 Hz.

The government announced the discovery of 5.9 million tons of lithium reserves for the first time in the country in the Reasi district of Jammu & Kashmir. The Geological Survey of India (GSI) has made the discovery. Lithium is a non-ferrous metal and a key component in electric vehicle (EV) batteries.

The Ministry of New and Renewable Energy (MNRE) directed public sector undertakings to blacklist renewable energy developers that fail to complete the project within the prescribed deadline. The ministry said that the blacklisting could span 3-5 years. The ministry communicated this to Solar Energy Corporation of India, NTPC, and NHPC. These companies issue tenders for private sector companies to develop renewable energy projects. The ministry also asked these public sector units to encash the bank guarantees in case of delay in commissioning projects.

India exported solar cells and modules worth $561 million (~₹46.4 billion) in 2022, an increase of 321% year-over-year (YoY) compared to $134 million (~₹11 billion) in 2021. The United States continued to be India’s largest market for solar exports in 2022. The exports to the U.S. increased in the second half of 2022 as the country restricted shipments of solar components from China due to concerns over forced labor.

The Solar Energy Corporation of India (SECI) released ₹7.3 billion (~$88.6 million) in payments to solar and wind developers for the power purchased in December 2022. The disbursal accounted for nearly 95.8% of the total amount paid by the nodal agency during the month. The agency had released ₹7.9 billion (~$96.6 million) against power purchases in November, which is 8% higher than the payment made for December. The agency released duties, payments, and developer reimbursements to procure solar and wind energy totaling ₹7.7 billion (~$92.5 million) in December.

The government invoked the emergency provision in the Electricity Act to direct all imported coal-based power plants to run at full capacity and ensure the availability of electricity to meet the anticipated peak power demand. The Ministry of Power has issued guidelines to increase supplies for power procurement from the untied capacity of imported coal-based plants. The power plants have been asked to blend imported coal with domestic coal. The guidelines will be valid from March 16, 2023, to June 15, 2023.

The Indore Municipal Corporation raised ₹3.03 billion (~$36.69 million) in green bonds, with its ₹2.44 billion (~$29.67 million ) issue being oversubscribed by 1.24 times. The proceeds from the green bonds issue will fund a 60 MW ground-mounted captive solar photovoltaic project in the Khargone district in Madhya Pradesh. The green bonds received an enthusiastic response, with the issue being oversubscribed three hours after it opened.