Clean energy investments in India jumped to $7.9bn in 2014, helping the country maintain its position as the 7th largest clean energy investor in the world. The upswing was driven by the newly installed government elected in May 2014 which supports clean energy reforms.
The numbers, just released by research firm Bloomberg New Energy Finance, show that the government’s ambitious plan of 24/7 power for all Indians is gaining traction. Other major initiatives: 100GW of solar installations and investment of over $100bn in clean energy in the next five years are also building momentum. Bloomberg New Energy Finance estimates that 2015 will be the second time ever that clean energy investments will pass $10bn. A record $13.1bn was deployed in 2011.
Ashish Sethia, head of South & Southeast Asia at Bloomberg New Energy Finance, said: “Interest in India from domestic and foreign investors has grown in the last six months. Early signs of policy interventions are positive. Specific yearly installation targets would further help investors.”
Bharat Bhushan Agrawal, lead India solar analyst at Bloomberg New Energy Finance, added: “After two years of continuous decline in investments, in both India and around the world, the trend reversed last year. We expect investment in India to rise in 2015 and later, particularly with the rise of solar power.”
BNEF analysis shows that India has one of the lowest levelised costs of renewable energy generation in the world. With the rising cost competitiveness of renewables and increasing interest in clean energy consumption by large commercial and industrial consumers, project installations are also expected to rise this year. BNEF expects 2,500MW of new solar capacity in 2015 – a 1.5 times increase over last year. Wind installations are estimated to reach 2,800MW ¬ – up 22% from 2014.
The government is working on introducing big ticket reforms in the power sector by amending the Electricity Act of 2003. Major reported highlights include the unbundling of power distribution, enforcement of renewable purchase obligations, and introduction of renewable generation obligations on power producers.
Sethia commented: “The planned reforms are going to strengthen renewables in India further but the federal establishment also needs to align with the state governments. That is where the projects are installed, the power generated and consumed.”
Six years of clean energy investment in India: