Renewable Energy tenders in India – Suffering due to lack of Transmission

India is blowing guns in all directions when it comes to renewable energy development. The ministry recently increased its overall renewable energy installation targets and is announcing large-sized tenders in order to meet the same. While solar has become the hot favorite of masses, wind energy still receives a stepchild like treatment in the country. This is further evident from the recent renewable energy tenders announced by the ministry – while the 2 GW solar tender was oversubscribed, the 2 GW wind tender was undersubscribed.

While the total tendered capacity was 2000 MW in the NTPC’s interstate transmission system (ISTS)-connected solar photovoltaic tender, total bids for 6,200 MW were made – this means that the tender was oversubscribed by more than three times. SBG Cleantech, Softbank’s joint venture, bid for the entire capacity of 2,000 MW. Other top bidders were AME Solar, ReNew Power, Adani Green Energy, Shapoorji Pallonji, Azure Power etc. Since the tender allowed a high capacity to be bid, many small players were filtered out giving room to distortion of a reasonable bid tariff. Note recently, the Indian solar tariffs reached INR 2.44 per kWh in SECI’s 2 GW ISTS-connected auction.

In stark contrast, the total tendered capacity of SECI’s latest wind auction was 2000 MW but bids for only 1200 MW were received. Renew Power, Adani Green Energy, Sprng Energy and Alfanar Energy each bid for 300 MW capacity. The industry is blaming lack of proper transmission infrastructure for the poor response in this sector. There are high chances that this wind tender would be canceled and a fresh one would be floated again.

Lack of sufficient transmission infrastructure has been a headache for India for years now. The country has plans to aggressively tread the renewable energy path but infrastructure is required for proper power evacuation. India is in dire need of the scale to keep abreast with the rising renewable energy capacity addition. Currently, nearly 70 GW of renewable energy capacity is connected to India’s national grid and this number is poised to grow in future. The government had started the Green Energy Corridor project in India (in 2013) with an aim to strengthen and develop the power transmission network, which is currently running way back its completion schedule. If we do not have room to further accommodate the capacity, it makes no sense to generate any extra RE capacity. A robust grid infrastructure is the need of the hour! Many developers have suffered due to this in the past and are skeptical to bid given the current situation.

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