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 Q2 FY23 was up by 6.8% compared to Q2 FY22 and reduced by 2.8% in comparison to Q1 FY23 owing to above-normal rainfall during June-September.
    • July: Up by 4.3%
    • August: Up by 3.2%
    • September: Up by 13.7%
    • Total Q2 FY23: Up by 6.8%
  • In Q2 FY23, RE generation increased by 12.1% versus the same quarter in the previous fiscal year (Q2 FY22). Coal/lignite-based generation was up by 6.2% and hydro by 12.0% for the same period.
  • From an average daily generation perspective, the share of RE and hydro increased, whereas coal share declined in Q2 FY23 compared to Q2 FY22.
    • RE: Share up from 12.3% to 12.9%
    • Hydro: Share down from 16.5% to 17.3%
    • RE + Hydro: Almost constant from 28.8% to 32.2%
    • Coal/lignite: Share up from 66.2% to 65.8%
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 Q2 FY23, most of the listed RE stocks (except the NYSE-listed solar project developer Azure Power) gained momentum and fared upward.
  • The share price of RE developer Adani Green Energy was up by 17%, and that of Sterling and Wilsonwas up by 4% as of September 2022 (vs June 2022).
  • The stock prices of wind developer–manufacturers Inox Wind and Suzlon Energy were up by 87% and 28% in September 2022 (vs June 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.
  • Continuing the trend since the beginning of FY23, in Q2 FY23, no new green bonds by RE developers were issued.
  • Key bond yields in India, including the 10-year Treasury bond yield, continued to see an uptick in Q2 FY23 against the backdrop of rising interest rates, coinciding with the rupee falling to a record low in September 2022.
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 Q2 FY23
12.9%
up from 12.3% in Q2 FY22
Capacity auctioned
3.51 MW
in Q2 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
57%
in Q2 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