Renewables' share in India's energy mix to be stable at 21% in FY25: Ind-Ra

The share of renewables including large hydro in the country's overall energy mix is expected to remain stable at nearly 21 per cent in FY25, India Ratings and Research (Ind-Ra) said on Tuesday.

The balance will be largely contributed by thermal capacity, the agency said in a report.

"The share of renewables (including large hydro) in the overall energy mix is expected to remain stable at nearly 21 per cent in FY25, with the balance largely contributed by thermal," it said.

As per official data, as of December 2024, India's overall power generation capacity was at 462 GW, of which 209.444 GW was renewables including hydro.

The agency further said that it expects all-India energy requirement to grow 5-5.5 per cent year-on-year (yoy) during FY25, with incremental capacity additions of 30-35GW, largely led by renewables.

Ind-Ra said it has also maintained a stable rating outlook for solar and wind projects for FY26, based on the historical generation profile (factoring volatility), regular payments from counterparties and comfortable internal liquidity.

The renewable energy capacity addition is expected to gain further traction in view of a strong pipeline (largely solar) and contribute 35-40 per cent to the generation mix by 2030.

"Given the uncertainty and intermittency in renewable energy projects, the need for round-the-clock power and to maintain grid stability, renewable tenders with hybrid/storage/round-the-clock tenders are expected to garner further traction.

"Furthermore, the government's impetus on the sector and favourable input prices are further expected to maintain a strong under construction pipeline," said Bharath Kumar Reddy, Associate Director, Infrastructure, Ind-Ra.

"Given the expected energy demand growth and energy transition plans, the country needs to add 50 GW of renewable energy capacity per annum till 2030. With a strong pipeline of 174 GW as of September 2024 and healthy tendering activity, implementation remains key to achieve the set targets," said Vinitha Arunachalam, Analyst, Infrastructure, Ind-Ra.