By Sethuraman N R
NEW DELHI (Reuters) -India’s renewable energy developers must align their growth plans with realistic demand projections to avoid the risk of infrastructure investments becoming unprofitable, a power ministry advisor said on Friday.
Speaking at the BloombergNEF Summit in New Delhi, Central Electricity Authority (CEA) Chairman Ghanshyam Prasad warned against building renewable capacity without corresponding demand growth, a challenge the sector has faced in the past.
“If we add 60 GW next year, will it get sold? Probably not,” he said, noting that existing renewable capacity remains unsold.
With electricity supply outpacing demand, grid operators have been forced to curtail power input to maintain system balance.
India has about 44 gigawatts (GW) of renewable projects without supply agreements, Reuters reported earlier this month.
Prasad said that India had suffered from thermal power overcapacity in the past decade.
“Generators were at a loss. Some even faced bankruptcy issues. Let’s not enter an era of stressed assets again,” he said.
Prasad also stressed the importance of better coordination between renewable energy developers and those building transmission lines, warning that having transmission ready does not automatically mean the power will be used.
“We have substations like the one at Khavda (in the western state of Gujarat) with a 4,000 (megawatts) MW capacity, but only 300–500 MW has been hooked up.”
He urged developers developers to submit grid connection requests at least 24-36 months in advance to ensure timely integration.
Several industry representatives at the summit said India’s power transmission sector requires more comprehensive reforms.
“We are able to add capacity very quickly but the need is to distribute that capacity at the equal pace through transmission. That investment is missing, because the whole focus is on the generation side,” said Sanjeev Aggarwal, founder and executive Chairman of Hexa Climate Solutions.
(Reporting by Sethuraman N R in New Delhi; editing by Clelia Oziel)
