Today 17.5% of total power capacity in India is through green energy sources. Within the renewable sector, wind energy dominates with a share of 56%, followed by solar with 22%, said a report by Care Ratings on the power sector.
According to International Renewable Energy Agency’s (IRENA) latest report “Remap Renewable Energy Prospects For India”, India has an estimated renewable energy potential of about 900 Giga Watt (GW) from commercially exploitable sources (1,000 GW when large hydropower is included).
“It is endowed with very good solar energy potential. Most areas receive on average 4-7 kWh/m2/day of solar irradiance. Assuming 3% of the country’s wasteland is available for it there is a solar power potential of 750 gw,” read IRENA’s report. Similarly, there is a potential of 102.8 GW for wind power.
Despite such a huge potential, IRENA states that there are major challenges in India bogging the sector one of which is getting investment, high upfront costs and uncertainty of revenue generation, etc.
However, according to CARE Ratings, more financiers and sponsors especially private equity funds and pension funds are likely to invest in completed renewable energy projects which would provide an exit to developers. The renewable segment would have to access innovative ways like green bonds, climate bonds etc for their capital requirements.
