With the return of the Narendra Modi government the Solar Energy Corporation of India has stepped up its efforts to gain momentum on renewable energy capacity addition, which remains way behind the target.
The Solar Energy Corporation of India (SECI) has issued the country’s largest wind energy tender in more than a year. The government-owned agency has issued a tender offering 1.8 gigawatts of wind energy capacity to project developers.
This is the eighth national-level tender issued by the SECI. Project developers shall be free to set up the projects at the sites of their choosing. The maximum allowed tariff bid for this tender has been set at Rs 2.85/kWh (4.14¢/kWh) which consistent with the bids seen in the last few SECI auctions. Bidders can bid for capacity between 50 megawatts and 600 megawatts.
SECI issued the first-ever wind energy tender in India in February 2017. It initially started with 1 gigawatt capacity tenders before moving on to 2 gigawatt tenders which was supposed to have become a norm. However, various problems forced SECI to shift to 1.2 gigawatt tenders. The last three tenders issued by SECI offered 1.2 gigawatts of capacity.
The last tender witnessed very poor response from developers as they placed bids to set up just 600 megawatts of capacity against the offered 1.2 gigawatt capacity. Eventually only 480 megawatts of capacity was awarded to four developers, making its the ‘smallest’ national-level and second ‘smallest’ wind energy tender in India’s history, in terms of capacity awarded.
The reasons behind this sudden increase of 67% in the offered capacity by SECI are multifold. First, SECI needs to accelerate the pace of auctions and implementation, as it has lagged behind over the last few months due to issues like the general elections and unavailability of adequate transmission network to support new projects.
Second, the recent proposal of massive investment in the implementation of new transmission projects. We recently covered the story that India’s largest power transmission infrastructure company proposed projects worth $1.8 billion to support renewable energy projects of more than 25-gigawatt capacity.
Moving forward, we could see similar large-scale wind energy tenders from SECI as the government aims to hit operational wind energy capacity of 60 gigawatts by March 2022. Just before the wind energy auctions began in February 2017 the operational wind energy capacity in India was 32.2 gigawatts. An additional 12.2 gigawatt capacity has been auctioned/offered for auction till date taking the total to 44.4 gigawatts. Thus, around 15.6 gigawatts of capacity needs to be auctioned by India by September 2020, giving the last projects 18 months of development time.
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