For the second time, India’s attempt at auctioning large solar-wind hybrid capacity failed as project developers submitted bids much lower than the offered capacity.
According to media reports, the second solar-wind hybrid tender issued by the Solar Energy Corporation of India (SECI) remained undersubscribed. SECI had offered 1.2 gigawatts as part of this tender but received bids for just 900 megawatts from two developers.
Adani Green Energy, one of India’s largest renewable energy generation companies, placed a bid to develop 600 megawatts while ReNew Power submitted a bid to develop 300 megawatts. This is the second participation by Adani in a solar-wind hybrid tender.
Late last year, SECI had initially offered 2.5 gigawatts in the inaugural solar-wind hybrid tender. Due to low interest from project developers, the capacity on offer was halved to 1.2 gigawatts. Still, the tender remained undersubscribed as only two developers offered to develop 1,050 megawatts.
Due to undersubscription, SECI finally auctioned 840 megawatts of capacity to two developers — Adani Green Energy (390 megawatts) at Rs 2.69/kWh (3.83¢/kWh) and Softbank-based SB Energy (450 megawatts) Rs 2.67/kWh (3.81¢/kWh).
The undersubscription mirrors the recent trends seen in solar and wind energy tenders issued by SECI as well as state governments. In order to curb the resurgent tariff bids by project developers, SECI set maximum tariff bid limits for some of the tenders. Similarly, some of the state governments went ahead and cancelled auctions citing high tariff bids by developers. This, along with concerns about the lack of transmission capacity to support new projects, and perhaps an uncertainty regarding general elections, future policy and deteriorated atmosphere in India’s lending sector, seem to the be reasons behind the disinterest of project developers.
The fact that a rather small number of project developers operate both in the solar and wind energy sectors could have also played a major role in this specific tender. The likes of Adani Green Energy and ReNew Power are the only companies in the private sector that actively participate in solar as well as wind energy tenders. SB Energy recently entered the wind energy fray and has a sole win of 325 megawatts. Hero Future Energies is another company that operates in both the sectors but has a bias towards the solar power market.