Over 11 GW of RE capacity bids in pipeline

More than 11 GW of renewable energy capacity, including with energy storage systems, are in the pipeline of States and central government utilities.

As of September 19, a total of 7.87 GW of tenders, largely for solar, are in the pipeline, while bids for 4 GW with energy storage support have also been floated by the utilities.

The largest tender is by state-run Solar Energy Corporation of India (SECI), which has invited proposals for supplying 2.25 GW of round-the-clock power from ISTS-connected renewable energy (RE) power projects. The Punjab State Power Corporation (PSPCL) has floated two bids of 1 GW each and the Railway Energy Management Company has floated a tender of 1 GW.

In terms of renewable energy with battery storage, power generator NTPC has come out with bids for 3,000 megawatt hour (MWh) of RE power with storage, while Gujarat Urja Vikas Nigam has floated a bid for 1,000 MWh with battery ESS.

A total of 114 GW of RE capacity (excluding large hydro) have been installed in the country as of June 2022.. Besides, RE projects of 60.66 GW capacity (excluding large hydro) are under various stages of implementation and 23.14 GW capacity are under various stages of bidding.  

Strong track record

Moody’s investor service in a June 2022 report pointed out that India’s track record of adding renewable energy and increasing the share of non-fossil fuels in overall capacity is one of the strongest in Asia.

India has already exceeded its COP21 target of meeting 40 per cent of its power capacity from non-fossil fuels (40.9 per cent as of March 2022). Higher coal and gas prices can further accelerate the adoption of renewables, which are already very cost competitive in India, it added.

“RE additions have gained momentum over the last six years and have contributed more than 60 per cent of total new capacity additions. Solar photovoltaic (PV) additions have more than quadrupled over the last six years and are likely to lead the way in terms of new additions over the next 4-5 years,” Moody’s said.

Hurdles

However, over the last 12 months, the cost of setting up solar and wind projects has increased significantly because of rising commodity (polysilicon, steel, copper and aluminum), shipping and energy prices.

Restrictive trade measures by India, including increases in import duty on solar equipment (40 per cent duty on solar modules and 25 per cent duty on solar cells with effect from April 1, 2022), have further led to an increase in input costs for solar power generation, Moody’s added.

According to brokerage ICICI Securities, the pace of annual renewables addition is set to increase substantially as it is key for catering to the projected demand requirements.

“The draft National Electricity Plan projects an addition of 279.5 GW of solar and 93.6 GW of wind (including 10 GW offshore wind) capacities over the next 10 years. In FY22, only 15.5 GW of RE capacity was added suggesting there is an immediate requirement to substantially increase the pace of RE auctions and awarding. This is crucial to avoid large deficits due to the increasing mismatch between the capacity addition requirement and commissioning.” it added.

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