India is undergoing an energy transition from fossil-based to clean energy. Our quarterly Market Handbook helps identify and analyse trends, present data-backed evidence and connect the dots to present a short-term market outlook. India is undergoing an energy transition from fossil-based to clean energy. Our quarterly helps identify and analyse trends, present data-backed evidence and connect the dots to present a short-term market outlook.
Key Findings
  • Total generation in Q1 FY23 was significantly up by 16% compared to Q1 FY22 and 13.5% compared to Q4 FY22 due to prolonged heat waves and delayed arrival of monsoon.
    • April: Up by 11.6%
    • May: Up by 23.4%
    • June: Up by 13.5%
    • Total Q1 FY23: Up by 16.0%
  • In Q1 FY23, RE generation increased by 30.6% ersus the same quarter in the previous fiscal year (Q1 FY22). Coal/lignite-based generation was up by 19.7% and hydro by 5.9% for the same period.
  • From an average daily generation perspective, the share of RE and coal/lignite increased, whereas hydro share declined in Q1 FY23 compared to Q1 FY22.
    • RE: Share up from 11.5% to 12.9%
    • Hydro: Share down from 11.0% to 10.0%
    • RE + Hydro: Almost constant from 22.4% to 22.9%
    • Coal/lignite: Share up from 72.0% to 74.3%
Figure 1: Source-wise daily generation
Source: POSOCO. Note: RE technologies include solar, wind, biomass, waste-to-energy, and small hydro and do not include rooftop solar and large hydro (>25 MW) generation.
  • The overdue amount payable by discoms to power producers increased by 17% in Q1 FY23 (INR 1,12,084 crore) compared to Q4 FY22 (INR 95,605 crore) and increased by 8% compared to Q1 FY22 (INR 1,03,574 crore).
  • From a payment delay standpoint, as of March 2022, Telangana, Andhra Pradesh, Uttar Pradesh, Rajasthan and Chhattisgarh took more than 120 days to clear their dues.
Figure 2: Discom payable and receivable days for RE-rich states
Source: UDAY portal (based on data disclosed by discoms as of 31 March 2022). *Data not available for these states; values derived from 2019–20/ 2020–21 financial reports.
  • In Q1 FY23, most of the listed RE stocks (including the NYSE listed solar project developer Azure Power) edged further downwards after enjoying an upward movement in most of the FY22.
  • The share price of the pure-play RE developer, Adani Green Energy, was down by 16% as of June 2022 (vs March 2022). The share price of Borosil Renewables, which holds a near monopoly position in India’s solar panel glass manufacturing, was down by 4% as of June 2022 (vs March 2022).
  • The stock prices of wind developer–manufacturers Inox Wind and Suzlon Energy were down by 33% and 30% in June 2022 (vs March 2022), respectively.
Figure 3: Change in key renewable energy stock prices (indexed to 100)
Source: Money Control.
Note: Share prices are the last traded value in each month.
  • In Q1 FY23, no new green and sustainability-linked bonds (SLB) were issued.
  • However, the previous quarter was moderate, with issuances of green bonds by ReNew Power (USD 400 million at a 4.50% interest rate for five years) and Greenko (USD 750 million at 5.50% for three years). In addition, Avaada Energy issued domestic green bonds worth INR 1,440 crore (USD 192 million).
  • Key bond yields, including the 10-year Treasury bond yield, saw a spike in Q1 FY23 due to successive repo rate hikes from 4.0% to 4.9% in the quarter.
Figure 4: Bond yields* and key financial rates
Source: Reserve Bank of India, State Bank of India, Trading Economics, Money Control and BondEvalue.
Note: Bond prices are the last traded value in each month; * Current yield.

Key Indicators
Share of RE in Q1 FY23
12.9%
up from 11.5% in Q1 FY22
Capacity auctioned
3.15 MW
in Q1 FY23
Amount overdue to power producers as of June 2022
INR 1.12 lakh crore
Up 8% from June 2021
Market concentration for RE auctioned capacity
68%
in Q1 FY23
Author's Name
Ruchita Shah
Programme Associate
For queries reach out to author
[email protected]
Tags
Energy Transition
Discoms
RE Developers
RE Auctions
Green Bonds
EV
Power Markets
Clean Energy Investments
Energy Storage