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
Tags
Energy Transition
Discoms
RE Developers
RE Auctions
Green Bonds
EV
Power Markets
Clean Energy Investments
Energy Storage