The 2019 general elections are currently underway in India. In recent months, with the country gearing up for one of the biggest democratic exercises, the solar tender and auction activity appears to have slowed down. Since the announcement of election dates, the central and state implementing agencies have issued just a few tenders.
The election commission’s approval is required for all the new projects. Consequently, the stakeholders in the renewable energy sector, especially solar, seem to have mixed feelings regarding the ongoing impact of the general elections.
When contacted, a National Solar Energy Federation of India (NSEFI) spokesperson commented on the ongoing situation saying, “There won’t be any such effect of the elections on the sector. There have been no new policy or target announcements, and moreover, the agencies that are active in the solar sector are not getting affected or involved in the elections.”
However, it is important to note here that the elections have affected the tender announcements, as recently reported by Mercom. The allotment of land for 5,000 MW of solar photovoltaic (PV) projects at Leh is expected to be delayed due to the ongoing general elections, and more details of the land parcels with actual coordinates will be made available only after May 20, 2019.
An executive working at one of the leading domestic renewable energy company said, “The elections are affecting the tendering process and the award of new projects. It is also affecting the projects that are under construction. There is unavailability of labor as citizens are heading back home to cast their votes. Due to this, the project cost will also go up slightly. It is even affecting funding.”
Few engineering procurement construction (EPC) players reiterated the fact they are facing a labor crunch, and it is but constitutional to allow their workers to exercise their right to vote by allowing them a day off from work. This will burn a small hole in our budgets but has to be done, said a few.
As far as new projects are concerned, these players are yet to participate in the EPC tenders and receive new contracts. But the hope is high as they feel that the current regime at the center will get another chance and business will continue as normal.
When contacted, an executive at Fortum said, “Things are getting delayed. We had won a 50 MW project before the election announcement, but right now the power purchase agreement (PPA) signing has been delayed. They need EC’s approval as this is a new contract and this is the norm during elections.”
When asked to elaborate on how new and under-construction projects will be affected, he said, “Yes, awarding of new projects will be affected, there will be delays until the new government assumes office. And for under-construction projects where involvement of government agencies or authorities is required, we will have to wait as they are going to be busy with the elections.”
But the outcome of the elections is not going to affect the trajectory of growth, the stakeholders feel. “Take the example of Rajasthan, where there was only one tender lined up before the new government formation. But after the new government came in, it did not stop new tenders from being announced or did not go for any policy or target recalibration,” he added.
The expectation is for activity in the solar industry to remain sluggish until the end of elections in the third week of May.