India's renewable energy share in overall power generation to spike 35% by FY30: ICRA

New Delhi [India] November 20 (ANI): India's renewable energy (RE) share in the overall power generation, including large hydro, is set to exceed 35 per cent by FY2030, up from 22.1 per cent in FY2025, said rating agency ICRA in a report on Thursday.

This growth, it said, will be supported by an estimated 200 GW of new capacity addition over the period.

However, the outlook hinges on timely project execution, adequate transmission infrastructure and the pace of power purchase agreement (PPA) signings by central nodal agencies.

ICRA also maintained a stable outlook for India's renewable energy sector, supported by robust policy measures, competitive tariffs and rising sustainability commitments from large commercial and industrial consumers. However, challenges persist, including land acquisition, transmission bottlenecks, PPA delays, and exposure to equipment price volatility and discom finances.

Notably, the report highlighted that after a sizeable RE capacity of 47.3 GW awarded in FY2024, which is followed by 40.6 GW in FY2025, the bidding activity has slowed sharply in the current year with only 5.8 GW awarded in 8 months of FY2026.

Further, the unsigned PPA capacity remains sizeable at about 40-45 GW as on date, based on industry channel check.

To address variability in renewable generation, Battery Energy Storage Systems (BESS) are gaining traction as India grapples with variability in renewable generation, it said.

Highlighting some of the moves undertaken by the government, ICRA said it introduced viability gap funding for BESS capacity along with extended transmission charge waivers for storage projects until 2028.

The Central nodal agencies and state discoms have awarded standalone BESS projects aggregating to over 20 GWh since April 2024 to October 2025.

Further, the share of round-the-clock (RTC), firm and dispatchable renewable energy (FDRE) and solar plus storage projects remained high at Rs 90 per cent of the total RE capacity awarded in 8M FY2026, it said.

Another key observation made by ICRA was in terms of decline in battery costs as it said the significant decline in battery costs over the past decade has helped reduce the cost of energy storage and adoption of BESS projects globally.

ICRA estimates that the levelized cost of storage using BESS for 2-4 hours of storage is relatively high, in the range of Rs. 4.0-7.0 per unit, compared to Rs. 5.0 per unit for Pumped Storage Hydropower (PSP) projects.

This has seen a significant improvement from the level of over Rs. 8.0-9.0 per unit seen in 2022. While BESS costs for 4-hour storage remain higher than that of the PSP, the execution risks and gestation period for the BESS projects are relatively lower. (ANI)

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