Horizons- April 2013

Posted on May 20, 2013 by

REC market analysis-April 2013

The financial year gone by brought mixed fortunes for renewable energy in India. Difficult market conditions in general affected renewable energy. At the same time, the sector witnessed significant shifts foremost being the change in government focus from wind to solar.

Renewable energy capacity in India grew 12% in FY12-13 over the previous financial year to reach a total close to 28,000 MW.


Wind capacity reached 19,051 MW. Capacity addition was 1,699 MW, 53% of last financial year’s addition, with most coming from independent power producers. Low growth is mainly due to the withdrawal of accelerated depreciation at the beginning of the year. The reintroduction of GBI in FY13-14 is expected to provide some needed push. Further, Karnataka, AP and TN are planning to develop wind corridors to boost wind energy growth.

Small Hydro

Installed capacity grew 7% with a cumulative installed capacity of 3,632 MW. Construction risk remains the single biggest challenge as most projects are located in difficult terrain. Other risks include consistent water availability, delays in acquiring land and obtaining statutory clearances, inadequate grid connectivity, and high wheeling and open access charges in some states.


Total installed capacity reached 3,602 MW with 65% coming from bagasse cogeneration and remaining from other biomass. Despite India being a large agrarian economy, biomass installed capacity remains low due to uncertain supply and high cost of feedstock. In the 12th plan, MNRE has set a target of 1,900MW with 1,400 MW from bagasse cogeneration and the remaining from other biomass.


Solar installations reached a significant size of 1,686 MW. Most of this growth occurred through the state policy of Gujarat and Rajasthan’s JNNSM projects. The year saw trade dispute between India and the US regarding domestic content requirement by the National Solar Mission. In November 2012, India had also initiated anti-dumping investigations against firms from China, USA and Malaysia following complaints by Indian manufacturers against cheaper subsidized foreign solar panels.


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