India Issued 69GW+ Renewable Tenders In FY24, Says IEEFA Report

India Issued 69GW+ Renewable Tenders In FY24, Says IEEFA Report

The Institute of Energy Economics and Financial Analysis (IEEFA) in its latest report indicated a record 69+ Gigawatt (GW) of renewable energy tenders in India in 2023-24. This is against the Indian government’s own annual target of 50 GW. The global energy think tank attributed this to the strong push from the Union government at the Center. The researchers said that the renewable energy market has rebounded.

“After a slump from 2019 to 2022 due to supply-chain issues and global price spikes brought on by the COVID-19 pandemic and Russia’s invasion of Ukraine, the market has rebounded and gone from strength to strength,” says the report’s contributing author, Vibhuti Garg, Director – South Asia, IEEFA.

“There is strong investor interest in the Indian utility-scale renewable energy market. The primary reasons are the large-scale potential for market growth, central government support in terms of targets and regulatory frameworks, and higher operating margins,” she added.

IEEFA Cites Jharkhand Solar Policy To Support Blended Finance For DRE

Also Read

The report produced jointly by IEEFA and JMK Research found that out of all the awarded tenders in FY2024, about 25% came from the Solar Energy Corporation of India (SECI) alone. However, the rising prominence of other tendering agencies/renewable energy implementing agencies underlines the strength of India’s renewable energy tendering ecosystem, it said.

India Issued 69GW+ Renewable Tenders In FY24, Says IEEFA Report

The report indicated an increase in solar tariffs in the last two years. It found an increase in solar tariffs marginally by ~8.5%, from an average of Rs 2.3-2.4 per kilowatt-hour (kWh) to Rs 2.5-2.6 per kWh, despite a ~57% fall in module prices in the same period. From FY 2020-24, the share of hybrid renewable energy tenders increased from 16% to 43%

The report also took note of the innovations in the kinds of renewable energy tendering, including India’s first large-scale offshore wind tender issued this year, totaling 4GW and a 500MW concentrated solar + thermal storage tender to follow next year.

India Awards More Than 8GW Of Energy Storage Tenders: IEEFA Report

Also Read

In addition, there has been an exponential rise of tender issuance for energy storage systems (ESS) projects, which will form a crucial part of India’s renewable energy infrastructure.

In FY2024, solar and wind tenders comprised just more than half (57%) of the renewable energy tenders issued in FY2024. The remainder are wind-solar hybrid, and renewable energy combined with ESS.

Of the tenders awarded in FY2024, only a quarter were from the Solar Energy Corporation of India, highlighting the important role that state-level tendering authorities will play in the utility-scale renewable energy landscape.

“Gujarat-based Gujarat Urja Vikas Nigam Limited (GUVNL) has already firmly established itself as one of the leading tendering entities in India. Similarly, the rising prominence of other state-level entities, such as Rajasthan-based Rajasthan Urja Vikas Nigam Limited (RUVNL), underlines the vibrancy of the renewable energy tendering ecosystem,” says the report’s co-author Prabhakar Sharma.

Renewable Energy Tenders Awarded

Of the total awarded tenders in FY2024, only about a quarter are from SECI. The rising prominence of other tendering agencies underlines the strength of India’s renewable energy tendering ecosystem. The top five tendering agencies, including the four REIAs and Gujarat Urja Vikas Nigam Ltd (GUVNL), account for more than three-quarters of India’s entire tender allotment. In FY2023 and FY2024, there were three new entrants: PFC Consulting, Rajasthan Vidyut Urja Nigam Ltd (RVUNL), and Calcutta Electric Supply Corporation (CESC).

Regarding the profile of developers, the report finds that in the past two years, more than 10 new developers entered the utility-scale renewable energy market in India. Notable entrants include BluPine Energy, backed by global equity investment firm Actis, and BrightNight, a US-based independent power producer (IPP) that has pledged to invest US$1 billion in India in the next five years.

While there is momentum in the utility-scale renewable energy market with innovative tenders and investor interest, there are persistent challenges in the execution of these tenders. The 40% import duties on solar modules and the requirement for developers to purchase locally manufactured components remain concerns for the industry.