India has become the largest market globally for auction of new renewable energy generation projects and the second-largest destination attracting clean energy investments, according to the latest Climatescope 2018 report by Bloomberg NEF (BNEF).

“India’s renewable auctions market is the largest in the world. Over 11 Gigawatt (GW) of projects were awarded through auctions in 2017 resulting in the best year for solar capacity as installations jumped by 90 per cent over the year,” Bloomberg NEF said.

India has bagged second place in the global ranking driven by its policy thrust towards renewables and increasing investments in the clean energy sector. The country is the second-largest renewable energy investment market among all Climatescope countries, attracting $9.4 billion in new investments in 2017.

Renewable energy installations in India exceeded those by coal power plants for the first time in 2017 as the country moved closer towards its target to install 175 GW of renewables by 2022. “India’s well-established domestic supply chain facilitated the development of clean energy projects further, despite competitive auctions putting downward pressure on profit margins across the value chain,” Bloomberg NEF said.

India’s installed power generating capacity stood at 346 GW in June 2018, with renewables (excluding large hydro) accounting for 71 GW. With coal taking a share of almost 60 per cent, challenges with domestic coal supply are resulting in increased coal imports.

However, the government has reduced its coal capacity target for 2027 by 11 GW to 238 GW as the country seeks to replace coal with renewables through auctions. The report said India’s renewable auctions market is the largest in the world and auctioned capacity has ramped up by 68 per cent since 2017.

India was the world’s fifth largest clean energy investment market in 2017, jumping up from being the sixth largest in 2016. Clean energy investment totalled $7.4 billion in the first half of 2018, with solar power projects accounting for the majority. India’s solar market almost doubled in size in 2017, making it a record year with annual PV installations touching 9.4 GW.