Renewable energy outlook in India appears gloomier for the next five years: BTI Report

According to a recent report by Bridge to India, the Indian solar and wind energy is expected to make an addition of around 35 GW and 12 GW, respectively in the next five years – due to COVID-19 disruptions.

Previously, the solar and wind power capacity additions were estimated at 43 GW and 15 GW, respectively – in the country.

The report further added that over the next five years, the renewable energy outlook appears to be gloomier in the country. This is because of weakening power demand growth, deteriorating financial condition of discoms and additional debt financing constraints.

With regard to the short-term impact of the Covid-19 pandemic on the sector, the report stated that the country could see an addition of 2-3 GW renewable capacity in 2020, along with higher working capital and operational costs posing challenges for developers and contractors.

Pointing on medium-term effects, the report mentioned reduction of capacity additions due to sustained weakness of power demand.

Meanwhile, it also pointed to higher off take risks of discoms, reduction in borrowers’ appetite and increased policy uncertainty risks for solar rooftops segment. However, the report mentioned a positive push for local manufacturing over the coming days.

Though, the report has predicted a gloomier outlook for the Indian Renewable Energy sector, over the next five years. However, the report also mentioned that in the long term, there would be an accelerated transition to clean energy and easier access to equity capital.