Renewable energy, power transmission to drive India’s power sector, reports say
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A report by Moody’s Ratings says that over the coming years, renewable energy and power transmission will drive investment in India’s power sector.
Moody’s Ratings report highlights the pressing need for investment in India’s power sector. With India’s ambitious target of 500 GW of renewable energy capacity by 2030, an investment of $190 billion to $215 billion is required over the next seven years.
Moody’s estimates another $150 billion to $170 billion of investment in electricity transmission and distribution and energy storage to support renewable energy capacity.
It says, “The sizeable pipelines of announced projects will likely keep the financial leverage of rated renewable power companies high over the next two to three years, a credit negative, but the leverage of government-related issuers is likely to remain moderate over the same period.”
While the focus is on renewable energy, the report acknowledges coal’s continued importance in meeting India’s power demand.
It states, “Coal will remain an important source of electricity generation in the next eight to ten years, which mitigates stranding risks for coal-based power assets. We expect India to add 40–50 GW of coal-based capacity over the next five to six years to help meet power demand, which is likely to grow by 5–6% annually over this period.”
The rating agency stated that despite the rise in renewable energy capacity, the utilization factor of coal-based power plants (CFPP) will stay elevated at 65–70%.
During summers, power demand in India has reached new highs.
Read more: Temperatures cross 50°C in parts of north and central India
Coal-based power is fulfilling most of this demand, accounting for approximately 70–75% of the supply, followed by gas. Renewable energy sources contribute 15-20% to the electricity supply.
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