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Navigating risks to unlock 500GW of renewables by 2030

Ember · last updated

Commissioning delays and risks from new-age FDRE projects can drive up the cost of capital by 4%

Project commissioning delays, driven by land acquisition challenges, grid connectivity issues and regulatory hurdles, remain a significant concern for India’s renewable energy sector. Furthermore, Firm and Dispatchable RE (FDRE) projects, designed to enhance renewable energy dispatchability through oversizing solar and wind projects and integrating storage, can introduce additional risks. These include penalties for failing to meet demand targets, exposure to market price fluctuations, and uncertainties surrounding future battery costs. Combined, risks from project delays and FDRE projects have the potential to raise the cost of capital by up to 4% or 400 basis points (bps ~ equivalent to 1/100th of 1%, or 0.01%).