Only 266 MW Bids Received for SECI’s 1200 MW Wind Tender As Industry Shies Away

SECI’s 1200 MW wind tender after receiving only two bids to develop 266 MW capacity has been extended once again.

1200 MW Wind Tender

The consequences of poorly thought-through decisions over the past year and more are finally affecting the ‘pipeline’ that Power Minister RK Singh repeatedly refers to when he asserts that all is well with India’s renewable targets. The latest response to Solar Energy Corporation of India (SECI’s) 1200 MW wind tenders, where only Adani Energy with 200 MW and ENEL for 66 MW responded, proves the point. The tender has been postponed, and will now be considered again on December 5.

SECI had issued the Request for Selection (RfS) for Tranche-IX of its wind energy tender setting up of 1200 MW wind energy projects in September, with a November 5, 2019, deadline. However, that deadline was later extended until November 20, 2019, after the nodal agency failed to collect any bids.

After the price squeeze of previous tenders, not only have developers stayed away despite the higher ceiling of Rs 2.93, (it was Rs 2.85 earlier), but the lack of participation despite the option to set up capacity anywhere goes to show just how unattractive  the government’s policy flip flops have managed to make renewables currently.

Of course, other reasons, like the deterioration in the funding environment, in part due to the mess in Andhra Pradesh which involves some of the biggest developers like Renew Power, or the failure of the Gujarat government to expedite site allotments despite repeated entreaties and assurances have also played a part.

The fact of the matter is, with discom after discom in states putting up their hands when it comes to purchasing power at any price around Rs 3 or above, Industry players aver that wind energy has become a very low IRR business when taken in the broader context of payment delays and other risks. Key industry suppliers like Suzlon are also in poor shape, further queering the pitch for bidders who have relationships with them for the material. The Wind-turbine maker had recently confirmed that it is working on a resolution plan and lenders have time till January next year to work on a sustainable resolution plan before taking any extreme steps.

Even as offshore wind grabs all the headlines with new capacities and announcements, all these tenders in India are for onshore wind, where the situation has simply gone from ordinary to bad within 12 months. Wind Energy, which had a strong headstart over solar in India till 2017-18, is suddenly playing catch up, even as solar itself lags in growth.

The amazing thing is that the government’s optimism remains, as we saw in the angry rebuttals from the power minister to talk of missing targets. As of now, it sure looks like the minister has a magic potion that everyone else is missing badly.

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