Government initiatives and policies are encouraging investments in RE

By January 31, 2023, the total renewable energy capacity deployed in the country had reached 168.39 GW, with solar power accounting for 63.89 GW, large hydropower for 46.85 GW, wind power for 41.98 GW, biopower for 10.73 GW, and small hydropower for 4.94 GW. Additionally, 80.15 GW of capacity is currently under construction, and 34.83 GW is being bid on.

The Indian government has implemented significant measures to encourage investment and promote the growth of renewable energy, including wind energy. These initiatives aim to facilitate the country’s transition towards a cleaner and more sustainable future.

Investments in the renewable energy sector

One of the critical steps taken by the government is permitting Foreign Direct Investment (FDI) of up to 100 percent under the automatic route. This has opened up new opportunities for foreign companies to invest in the Indian renewable energy sector. Additionally, the government has waived Inter-State Transmission System (ISTS) charges for the inter-State sale of solar and wind power for projects commissioned by 30 June 2025. This waiver has lowered the cost of generating renewable energy, making it more attractive to investors.

Incentive program for wind energy

To promote wind energy specifically, the government has declared a trajectory for Wind Renewable Purchase Obligation (Wind RPO) up to 2030. Concessional custom duty exemption on certain components required for manufacturing electric wind generators has also been provided. The government offers Generation Based Incentives (GBI) to wind projects commissioned on or before 31 March 2017. Technical support is also being provided, including wind resource assessment and identification of potential sites through the National Institute of Wind Energy, Chennai.

Bidding guidelines for RE trading 

In addition to the above initiatives, the government has issued Standard Bidding Guidelines for tariff-based competitive bidding to procure Power from Grid Connected Solar PV and Wind Projects. The government has also ordered that power be dispatched against a Letter of Credit (LC) or advance payment to ensure timely payment by distribution licensees to RE generators. Furthermore, the government has notified the Promoting Renewable Energy through Green Energy Open Access Rules 2022 and the Late Payment Surcharge and related matters Rules 2022. 

Furthermore, the Renewable Purchase Obligation (RPO) trajectory of up 2030 provides a long-term vision for the growth of renewable energy. In addition to this, the establishment of Ultra Mega Renewable Energy Parks to give land and transmission to RE developers on a plug-and-play basis is another initiative by the government. This will help overcome the challenges of land acquisition and transmission infrastructure, which are significant obstacles to developing renewable energy projects.

Substation capacity

The government also focuses on creating new sub-station capacity for evacuating renewable power and laying new transmission lines. This will ensure that renewable energy generated in remote areas can be transmitted to the demand centres efficiently. The government has also set up a Project Development Cell to attract and facilitate renewable energy investments.

Increasing energy storage  As of March 2023, India’s total energy storage capacity includes 4745.60 MW from Hydro Pumped Storage Projects (PSPs) and 39.12 MWh from Battery Energy Storage Systems (BESS). This energy storage capacity is not limited to any specific technology. Despite this noteworthy achievement, there is still a requirement for further investment and development in energy storage technology to keep pace with India’s growing renewable energy sector. Advancements in energy storage technology are crucial to successfully utilising renewable energy sources, such as solar and wind, even in adverse weather conditions. Enhanced energy storage capabilities will facilitate the efficient integration of renewable energy into the grid, enhancing energy security and promoting a sustainable future for India.