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.
Key Findings
  • Total generation in Q2 FY22 was up by 9.1% compared to Q2 FY21, owing to improved economic activity and lower-than-normal monsoons during July and August 2021 leading to a higher power demand.
    • July: Up by 10.1%
    • August: Up by 16.2%
    • September: Up by 1.2%
    • Total Q2 FY22: Up by 9.1%
  • Overall RE generation increased significantly by 24.6%, while large hydro generation and coal/lignite generation grew by 2.0% and 11.1%, respectively (vs. Q2 FY21).
  • RE and coal/lignite share in average daily generation increased in Q2 FY22 (vs. Q2 FY21), while hydro saw a decline.
    • RE: Share up from 10.7% to 12.3%
    • Hydro: Share down from 17.6% to 16.5%
    • Coal/lignite: Share up from 65.1% to 66.2%
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 amount overdue by discoms to power producers significantly increased by 19.0% in Q2 FY22 (from INR 1,41,830 crore in Q2 FY21 to INR 1,15,384 crore in Q2 FY22). The reforms-based and results-linked, revamped distribution sector scheme with an outlay of INR 3,03,758 crore, announced in Q1 FY22, received a remarkable response.
  • Unprecedented increase in power demand affected the discoms’ ability to pay power producers in time. In Maharashtra, Telangana, Madhya Pradesh, and Chhattisgarh, the payable days for power purchase increased by more than a month in Q2 FY22 (vs. Q2 FY21).
  • In August 2021, Ministry of Power (MoP) announced the amendments to Electricity (Late Payment Surcharge) Rules, 2021. The amended rules allow a power producer to sell power to any consumer or any other discom or power exchanges, for the period of default by a discom.
Figure 2: Discom payable and receivable days for RE rich states
Source: UDAY portal (based on data disclosed by discoms as of 30 June 2021). *Data not available for these states; values derived from 2018–19/ 2019–20 financial reports.
  • After a slower quarter, most RE share prices remained high in Q2 FY22 as investors showed interest in RE stocks with ongoing sector reforms. In August 2021, ReNew Power became the first Indian renewable energy entity to be listed on Nasdaq.
  • After a sharp fall in June 2021, with the issuance of clarification from NSDL, the share price of Adani Green Energy rallied in August and September. It garnered noticeable investor interest after acquiring SB Energy’s 5 GW portfolio in May 2021.
  • The share price of solar EPC company Sterling and Wilson rallied up as the solar capacity additions picked up notably in Q2 FY22. Borosil Renewables (India’s only solar glass manufacturer) continued to garner investor interest.
Figure 3: Change in key renewable energy stock prices (indexed to 100)
Source: Money Control.
* National Securities Depository Limited.
  • Indian RE developers have traditionally relied on the international green bonds market to access low-cost finance due to low liquidity and credit rating constraints in the Indian bond market. The international market saw a lowest ever coupon rate (3.575%) issuance among Indian RE developers. The green bond was raised by Azure Power, proceeds of which will refinance an earlier green bond issued in 2017.
  • While Greenko and ReNew Power remain the leaders among Indian developers, new developers (Continuum Green Energy, Hero Future Energies, JSW Hydro and Acme Solar) made their debut in the international green bond market in 2021.
  • In Q2 FY22, Acme Solar entered the market with a USD 334 million green bond issuance to refinance its existing debt.
  • No notable fluctuations were observed in RE bond yields in Q2 FY22.
Figure 4: Bond yields* and key financial rates
Source: Reserve Bank of India, State Bank of India, Trading Economics, Money Control, and BondEvalue. *Current yield.

Key Indicators
Share of RE in Q2 FY22
up from 10.7% in Q2 FY21
Capacity auctioned
10.1 GW
in Q2 FY22
Amount overdue to power producers as of September 2021
INR 1.15 lakh crore
up 19% from September 2020
Market concentration for RE auctioned capacity
in Q2 FY22
Author's Name
Ruchita Shah
Programme Associate
Nikhil Sharma
For queries reach out to author
Energy Transition
RE Developers
RE Auctions
Green Bonds
Power Markets
Clean Energy Investments
Energy Storage