Renewables' share in energy mix falls marginally to 10.7 pc in Q2: Report

by admin November 21, 2020 at 7:51 pm
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Representative Image

New Delhi: The share of renewables in energy mix came down marginally to 10.7 per cent in September quarter this fiscal year from 11.4 per cent in the year-ago period, as per a report. According to the latest edition of the CEEW-CEF’s quarterly Market Handbook, the prominent reason for the decline was the unseasonable and sharp reduction in wind speed in resource-rich states Gujarat, Rajasthan, and Tamil Nadu.

The reduction in wind speed in these states led to 41 per cent decline in wind generation in July 2020 as compared to the same month last year, it said.

September quarter typically records the highest wind energy generation every year.

“Renewable energy’s share in the energy mix decreased marginally from 11.4 per cent in Q2 FY20 to 10.7 per cent in Q2 FY21,” it said.

The CEEW Centre for Energy Finance (CEEW-CEF) is an initiative of the Council on Energy, Environment and Water, one of Asia’s leading think tanks.

It also highlighted that 3.2 GW of renewables were auctioned in September quarter 2020-21 as compared to 4.4 GW (excluding 8 GW sanctioned as part of a manufacturing-linked upsizing of a solar auction from an earlier quarter) in April-June period.

Further, auctions for vanilla renewable energy projects gave way to auctions for blended generation mixes in the last quarter. Auctioning blended solar and wind projects is aimed at improving the transmission infrastructure utilisation with higher capacity utilisation.

It also highlighted that market concentration – the share of top five developers in the total project capacity sanctioned – increased to 84 per cent in the quarter under review as compared to 81 per cent in the previous quarter, and is expected to remain high going forward.

Further, aggregate renewable energy capacity additions slowed down in second quarter partly owing to supply chain disruptions due to COVID-19, which impacted grid-scale capacity additions. In contrast, rooftop solar picked up with 399 MW capacity added in the quarter, as compared to 188 MW in second quarter of 2019-20.

Gujarat, Rajasthan, and Tamil Nadu led the growth in rooftop solar installations. Meanwhile, coal capacity addition remained subdued with net addition in second quarter at 550 MW, approximately a third of renewable energy additions of 1,560 MW during the same period last fiscal.

“Among renewables, grid-scale and rooftop solar continued to dominate capacity additions in the quarter, accounting for a nearly 60 per cent share. A five-month extension granted by the Ministry of New and Renewable Energy for grid-scale project commissioning could result in a noticeable uptick in renewable energy capacity additions as the lockdown eases further,” Nikhil Sharma, Associate at the CEEW-CEF, said.

The report also indicated that short-term electricity prices, in both day-ahead and real-time spot markets, saw an increase to Rs 2.53 per kWh and Rs 2.42 kWh in the quarter from Rs 2.35 per kWh and Rs 2.22 kWh, respectively in June quarter.

This was due to a recovery in demand from discoms and increased volumes when compared to second quarter levels last fiscal.

On the discom payables front, the report highlighted the Rs 1.4 lakh crore discom overdues to power producers as of September 30, 2020, representing an increase of 50 per cent compared to overdues in September 2019.

However, the pace of increase in overdues dropped significantly, increasing only 5 per cent over the year-ago quarter. In June quarter, it spiked to 30 per cent.

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