Economic Analysis of

Renewable Energy
Group 2:
Aditya Bharadwaj (MBA19002)
Karlin Viju V (MBA19032)
Utpal Ravi (MBA19077)
Nikita Seth (MBA19047)
Ayushi Riya Ecka (MBA19017)
Avik Basu (MBA19260)
Rahul Kumar Jha(MBA19062)
 INTRODUCTION
Renewable Energy Industry in India

ROBUST DEMAND • As the Indian Economy grows the electricity consumption is projected to
1 reach15,280 TWh in 2040

INCREASING • With Government’s ambitious green energy target, the sector has become
2 INVESTMENTS quite attractive for both foreign and domestic investors. It is expected to
attract investments of up to USD 80B in next 4 years

• Government of India has ramped up its previous target to achieve 225 GW

3 POLICY SUPPORT of renewable energy capacity by 2022

• India has sunlight available all throughout the year and has a large
COMPETITIVE hydropower potential
4 ADVANTAGE • India was also ranked 4th in EY Renewable Energy Country Attractive
Index 2018
 RENEWABLE ENERGY GENERATION CAPACITY

Installed Renewable Capacity (GW)-May 2019) Installed Renewable Capacity Breakup-April 2019
90 Small
Hydro
80
Bio 5.8%
70 Power
11.7% Wind
60 WIND POWER Power
45.5%
50
SOLAR POWER
40

30 BIO POWER

20 Solar
SMALL HYDRO Power
10
37.1%
0
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20

• India accounts for approximately 4 per cent of the total global electricity generation and contributes 4.43 per cent to the global renewable generation capacity.
• The International Energy Agency’s World Energy Outlook projects a growth of renewable energy supply to 4,550 GW in 2040 on a global basis.
• Installed renewable power generation capacity has increased at a fast pace over the past few years, posting a CAGR of 17.28 per cent between FY14–19.
• India added record 11,788 MW of renewable energy capacity in FY18 and 8.6 GW in FY19.
• The renewable energy sector’s capacity during the first quarter of fiscal year 2019-2020 is higher at 2,151 MW.
• As of May 2019, total renewable1 power installed capacity2 in the country stood at 79.37 GW.
 RENEWABLE ENERGY IMPACT

Benefits of Renewable Energy Use

Less Global Warming

Improved Public Health

Inexhaustible Energy

Jobs and Other Economic Benefits

Stable Energy Prices

Reliability and Resilience

Different sources of energy produce different amounts of heat-trapping gases. As

shown in this chart, renewable energies tend to have much lower emissions than other
sources, such as natural gas or coal.
 RENEWABLE ENERGY IMPACT

01 Higher upfront cost

02 Intermittency

Negative Impacts of Renewable Energy

03 Storage capabilities

04 Geographic limitations

Note: When it comes to renewable energy, the positives outweigh the negatives. Transitioning to renewables on a personal, corporate, or governmental level will not only help us
save money but also promote a cleaner, healthier environment for the future.
 KEY OBSERVATIONS
Government initiatives
A new Hydropower policy for 2018-28 has been
drafted for the growth of hydro projects in the
country.
The Government of India has announced plans to
implement a US$ 238 million National Mission on
advanced ultra-supercritical technologies for
cleaner coal utilization.
The Ministry of New and Renewable Energy
(MNRE) has decided to provide custom and
excise duty benefits to the solar rooftop sector,
which in turn will lower the cost of setting up as
well as generate power, thus boosting growth.
Achievements In The Sector
Solar capacity has increased by eight times
between FY14-18. India added record
11,788 MW of renewable energy capacity in
2017-18.
A total of 47 solar parks with generation
capacity of 26,694 MW have been approved
in India up to November 2018, out of
capacity of 4,195 MW has been
commissioned.
Road Ahead
The Ministry of New and Renewable Energy
(MNRE) has set an ambitious target to set
up renewable energy capacities to the tune
of 175 GW by 2022 of which about 100 GW
is planned for solar, 60 for wind and other
for hydro, bio among other. Government of
India is aiming to achieve 225 GW of
renewable energy capacity by 2022, much
ahead of its target of 175 GW as per the
Paris Agreement.
Product Analysis

• Recent years show a nonstop rise in the stake of

renewable energy sector
• In India, solar power products market is projected
to grow at a CAGR of more than 11% to surpass $
7.6 billion by 2024
• To promote production, the government has taken
several initiatives in the form of offering
subsidies, financial assistance, incentives to
manufacturers, power producers and even
customers
• China is the largest producer of solar panels
• Loom Solar, Tara solar, Vikram solar are leading
with the production of sophisticated solar panels
• Monopolistic competition happens in renewable
energy sector
 Product Analysis Contd..

Price
In the given diagram, the subsidy is P3-P2 and
Supply 1
Supply 2 the new quantity consumed is Q2. However, the
P3 price a customer pays does not fall by the equal
Producer Benefit
amount as that of the subsidy. The producers get
P1
some of the benefit in terms of extra revenue
Consumer Benefit

P2
that they can keep.
Q1 Q2
Demand The net gain to the consumer is P1-P2 or the
Quantity
area under the orange rectangle.
Q1 Q2

The net gain to the producer is P3-P1 or the

By giving subsidy on production of these goods, the
government is encouraging the producers to produce
area under the green rectangle.
more and thus the overall supply line changes and
with that the demand increases and net price also
comes down to P2 from P1
   Product Type: Home Solar System Cost Size(KW)
 Solar Photovoltaics Average System Rs.1050000 4kW
 Solar Water Heater Large System Rs. 2000000 8kW
 Solar Pump
 Solar Lantern
Installation Methods
Mount Type performance cost
Solar panel Advantages Disadvantages
type Fixed Mount stationary and can’t be Rs 700-1000
moved, less efficient and the
least expensive.

Mono •High
crystalline efficiency/performance •Higher costs Adjustable can be tilted. Avoid wind Rs 3500
•Aesthetics Mount damage, more expensive,
adjustable mounts, less space
to maximize energy
production. 
•Lower
Polycrystalline •Low cost efficiency/perform
ance

Tracking It follows the sun’s arch for Rs 35000-

Mount maximum energy production, 200000
•Portable and flexible •Lowest most expensive, much more
Thin-film •Lightweight efficiency/perform
costly to maintain.
•Aesthetics ance
 Market Analysis
Price
• Global market Value: $928 bn
• Expected to reach $ 1512.3 bn in 2025
Key Players:
• ABB Ltd., General Electric (GE), The Tata Power Company ltd,
Innergex, Enel Spa (Enel), Xcel Energy Inc., EDF, Geronimo
Energy, Invenergy, and ACCIONA
• Monopolistic competition: Many buyers and sellers, each firm
produces differentiated products
Renewable energy market has been segmented on
1. Energy sources 2.Application 3.End user

Wind
energy Automotive  
Application

Solar Geothe
Energy rmal Construction
source
s Residential
Industrial
Commercial
Transportation
Bio Hydrop
energy Chemical & petrol
ower chemical
 Demand vs Market price

Market price and cost to society

Price

Demand

Quantity
 Demand Analysis

Demand Sectors Expected demand by 2047

• Buildings: enhanced compliance of the Energy Conservation Building Code which seeks to set out the
minimum requirements of the energy efficient design and construction of the buildings, high penetration
of efficient appliances and technologies and better urban planning
• Transport: There is a greater shift towards transient oriented development, enhanced use of public
transport, increased penetration of electric and hybrid vehicles which uses renewable form of energy
• Agriculture: a shift towards electric and solar pumps from diesel pumps
• Telecom: There is a shift from diesel run telecom towers towards electricity based towers. Moreover,
there is an enhanced use of renewable sources such as solar and wind to fuel the telecom towers

Enablers
• Reaching price and performance parity on and off the grid
1. Wind and solar have reached grid price parity and are moving closer to performance parity with conventional sources.
2. Utility-scale solar and wind combined with storage are increasingly competitive, providing grid performance parity in addition to price parity 
3. Utility-scale grid parity is not the only factor, as distributed renewables such as rooftop solar are reaching socket price and performance parity
• Cost-effective and reliable grid integration
1. Wind and solar place downward pressure on electricity prices
2. Growing shares of wind and solar pair with greater grid reliability and resilience
• Technology for automated, intelligent, blockchain, and transformed renewables
1. Automation is dramatically cutting time and costs for solar and wind production and operations
2. AI finetunes weather forecasting to optimize the use of renewable resources
 Supply Analysis
Variables affecting demand
• Research and Development -energy supply is very important in all stage because technological
transformation depends on type of primary energy used and reliability of supply
there is no intersection between marginal cost and price, which means that the
producer cannot get costs balanced under the current energy price, so RE output in the energy
market is 0. The government has to provide a R&D encourages for new RE market.

• Incentives and Subsidies-government takes a guaranteed feed-in tariff instrument price to

Feed in Tariff of price so producers give the help speedily the RE supply from QRF to QRF*

• Economy-Renewable energy demand increases most rapidly in the initial stages of Relationship between R&D instrument and RE supply
development. In addition, there is income and price elasticity for renewable energy demand.
GDP and per capita income is a big factor.

Demand and Supply comparison

Relationship between Incentive and RE Supply

 Competitors in The Industry

Greenko energy
Renew power
Tata power

• India’s largest renewable • Greenko energy • Part of Tata group

energy Independent Power holdings is leading the • India’s largest
Producer. Renewable  Energy integrated solar power.
• A capacity of 2637 mw in  Sector in India. • A capacity of 1161 mw
wind energy sector. • A capacity of 2156 mv in wind energy sector
• Operational capacity of in wind energy sector • Operational capacity of
1241 mw in solar energy • Operational capacity of 1388 mw in solar
sector. 1916 mv in solar energy energy sector.
sector.
 Road Ahead

MNRE target for 2020 •Government of India is

targeting to achieve 225GW
green energy capacity by 2020
175GW
By 2040, 49
percent of total
• India’s renewable energy sector is energy will be
Solar Wind Other expected to attract investments of up to generated by the
US$ 80 billion in the next four years. renewable
100 GW 60GW 15GW energy.
(expected)
• Use of efficient
batteries will
• Use of Green
further cut the solar
energy in place of
energy cost by 66
coal will save India
percent as
Rs 54,000 crore.
compared to the
current cost.
This Photo by Unknown Author is licensed
under CC BY-SA
Thank You