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.
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
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
(from INR 1,41,830 crore in Q2 FY21 to INR 1,15,384 crore in Q2 FY22). The reforms-based and results-linked,
distribution sector scheme with an outlay of INR 3,03,758 crore, announced in Q1 FY22, received a remarkable
Unprecedented increase in power demand affected the discoms’ ability to pay power producers in
In Maharashtra, Telangana, Madhya Pradesh, and Chhattisgarh,
the payable days for power purchase increased by more than a month in Q2 FY22 (vs. Q2
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
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
The green bond was raised by Azure Power, proceeds of which will refinance an earlier green bond issued in
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