India Plans to Tender Out 100 GW Solar Plus Wind In Next 3 Years But Where Is The Demand?

100 GW Solar Plus Wind Tenders in India

India’s Ministry of New and Renewable energy (MNRE) plans to tender out 100 GW of solar plus wind tenders over the next 3 years. They have also given a tentative plan of the capacities that will be tendered out. The ambitious plan has 17 GW of solar power that will be up for grabs in the next four months itself which is huge given that the current cumulative installed capacity of solar is less than 15 GW.

• 3GW in December 2017
• 3GW in January 2018
• 5GW in February 2018
• 6GW in March 2018

Also, read India Plans A Massive 20 GW Solar Tender – The World’s Largest Solar Tender

This will be followed by another 30 GW each in 2019 and 2020 plus 10 GW each of wind tender which will get to the 100 GW new capacity. However, these plans seem to be more like castles in the air as most of the issues remain unresolved. With a large number of states being in a power surplus who is going to buy all this power? Demand growth in India has been tepid at best given that industrial demand has been lackluster over the last few years and energy efficiency has improved. While there remains large unmet demand in certain areas, the distribution companies remain in an indebted state not serving paying customers. The UDAY scheme for the reform of the last mile system still remains a work in progress.

On the supply side, there are issues related to land availability, transmission infrastructure, and off-taker issues. A solar plant in Andhra Pradesh could not sell power for 4-5 months till NTPC had to intervene and bundle cheaper thermal coal power to get a distribution utility to buy that power. 17 GW of solar power in just 4 months will be impossible to sell even if the government comes out with a tender.

Another plan of tendering out 20 GW for domestic manufacturers remains extremely short on details on how the developer and manufacturer of solar panels will work together. Grandiose plans rather than workable plans seem to be the order of the day. With the extremely efficient Piyush Goel shifting to the railways ministry, the power and renewable energy ministry have looked extremely ineffective over the last few months. Tenders for solar energy have dried up leaving the industry in a lurch. The few and far tenders have seen fierce competition leading to abnormally low prices.

Instead of tendering, the government should create a market-driven mechanism for developing and selling power in the country which should be transparent and available at affordable prices.