The total installed capacity of Indian renewable sector has surpassed 90,000 MW during November 2020 amid continuing challenges for the developers in the segment.

The new capacity addition in the renewable energy segment has been slow so far in this fiscal. During November, an estimated 463 MW of new capacity was added in the RE sector, taking the cumulative RE energy capacity in India to about 90.4 GW as on November 30, 2020.

For the April-November 2020 period, the RE segment has added a total new capacity of 3321 MW, which is little less than 1/4th of the capacity addition target for this fiscal. The government has fixed a new capacity target of 14,380 MW for this fiscal. Solar power is expected to add about 11,000 MW (9,000 MW from ground-mounted projects and 2,000 MW through rooftop capacity), while the wind power segment is expected to bring in 3,000 MW of capacity.

During the eight-month period of this fiscal, solar segment added 2,283 MW (includes of 1,396 MW of ground-mounted and 887 MW of rooftop), while wind power segment brought in 690 MW of new capacity to the grid, according to the data of Union Ministry of New and Renewable Energy (MNRE).

Moderate tender activity

Tender activity was moderate during this November with only three utility scale tenders issued for a capacity of 110 MW and two rooftop solar tenders for a total capacity 60 MW were issued.

“Both tender issuance and auctions have been slowing down month-on-month. Multiple amendments in bidding guidelines, changes in tender specifications and unwillingness of Discoms to sign PPA have resulted in uncertainty in the market,” says a report of Bridge to India, a renewable energy consulting firm.

Meanwhile, the Centre has also come out with more measures to support the developers, who have been facing financial crunch and challenges in securing bank limits.

Relaxations

Recently the Ministry of Finance has relaxed requirements of performance bank guarantee (PBG) and earnest money deposit (EMD). It instructed the public sector undertakings (PSUs) to reduce PBG for new tenders and contracts issued by December 31, 2021, to 3 per cent of the contract value from the earlier 5-10 per cent.

PSUs have also been instructed not to demand any EMD in tenders issued until December 31, 2021. Bidders will instead submit a bid security declaration form as part of the bid response. These measures are aimed at reducing the cost relating to PBG and EMD.

Wind energy sector, where project installations decelerated in recent years, has sought efforts by the government to lower barriers and intensify grid infrastructure and land allocations to revive auction appetite and resolve the execution challenges facing India’s wind market.

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