Long-term demand outlook for renewable energy is strong aided by favourable policy support from the central government and the state governments as well as an improving tariff competitiveness of wind and solar power, said a note from rating agency Icra. More From Livemint »Icra added that given the strong pipeline of projects awarded in the last 12-month period, it expects solar capacity addition of 7-7.5 GW in FY2018, which is likely to be higher than the wind energy capacity addition. In case of the wind energy segment, the capacity addition in the near term will be critically dependent upon the finalization of bidding plans by distribution utilities and the ministry of new & renewable energy (MNRE). The sector however, continues to face regulatory challenges related to RPO (renewable purchase obligations) norms and continuing delays in payments from distribution utilities. This apart, while falling tariffs improve demand outlook, they also affect the cost competitiveness of pre-existing renewable energy projects as well as the project economics of new projects.

Source: Mint July 11, 2017 20:37 UTC