Renewable energy generation in India jumps to 17% in May: HSBC report

New Delhi: The decline in power demand, together with continued renewable capacity additions the last year, caused the share of renewable energy generation in India jump to 17 per cent in May and to 19 per cent in first 10 days of June - compared to 13 per cent/14 per cent in May/June last year, respectively, an HSBC report showed on Friday.
Large base and excess rainfall cause decline in power demand. Power demand/peak demand declined 4 per cent/7 per cent in May and declined 1 per cent/1 per cent in the first 10 days of June, respectively.
This was the result of significantly above average rain levels in May.
Owing to the must-run status of renewables, thermal plants had to back down reducing the plant load factor (PLF) to 65 per cent in May (versus 72 per cent last year).
"Accordingly, coal stocks at power plants reached a significant 61m tonnes (21 days of demand versus 17 days at the same time last year). This also resulted in power prices during solar hours dropping to zero on 25 May. Power deficits, accordingly, remained negligible through the month," the report mentioned.
Government is backing storage. To solve the intermittency issue of renewable energy, batteries are critical to control curtailment, improve renewable energy offtake, and improve efficient use of existing coal plants.
The government announced a slew of measures, doubling down on battery storage: announcing a ₹54 billion of additional viability gap funding (VGF) for 30 GWh of battery storage.
This amounts to $21 per kwh of government incentives for putting up new battery storage systems. Out of the 30GWh, 25GWh of storage capacity will be allocated to states and 5GWh to NTPC.
This is in addition to the ₹37 billion of existing VGF under which the existing 13GWh of storage is under implementation.
"Further, the government also extended the waiver of Inter-State Transmission (ISTS) charges for pumped storage plants (PSP) (construction awarded before June 2028) and co-located battery storage (BESS) for projects (commissioned before June 2028). This will help accelerate the take-up of battery tenders - nearly 10GWh of BESS tender capacity has been awarded since March 2024," according to the HSBC note.

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