Following a recent lull in tender activity, the Ministry of New and Renewable Energy (MNRE) is preparing to announce a spate of tenders for solar projects in the coming four months, starting in December 2017, to help the government reach the goal of installing 100 GW of solar capacity by 2022.
Under the plan, the MNRE says it will work alongside states to announce the tenders needed to reach 20 GW of ground-mounted capacity in solar parks in the 2017-18 fiscal year, said MNRE secretary Anand Kumar. Of the 20 GW, 3.6 GW has already been tendered while another 3 GW is set to be tendered in December 2017, followed by 3 GW in January 2018, 5 GW in February 2018, and 6 GW in March 2018. Another 30 GW is expected to be tendered in 2018-19 with 30 GW to follow in 2019-20.
Raj Kumar Singh, the Union Minister of State (IC) for Power and New & Renewable Energy, said the MNRE is also looking to encourage the Make in India initiative by issuing an expression of interest (EOI) that encourages the establishment of 20 GW of domestic manufacturing facilities in the near future.
Furthermore, MNRE is considering innovative ways to install more renewable energy capacity by developing solar power projects over dams, developing offshore wind energy systems, and hybrid solar-wind power systems. Projects like these could provide more than 10 GW of additional capacity. The MNRE has already surveyed the Bhakra Nangal Dam as a potential site for floating solar power projects and is also looking at areas offshore Gujarat and Tamil Nadu as potential sites for wind power projects, secretary Kumar added.
The upcoming tenders and the accompanying EOI are set to give renewable energy sector stakeholders the visibility they need to make investments and plan for the future.
“Stalled tender and auction activity this year has played havoc with the solar supply chain. This has led to irrational low bidding by desperate companies. After making such a detailed and bold announcement, it is extremely important for the government to follow through. Right now, I don’t think anybody in the industry believes any of these announcements. The government has to simply execute on every mentioned benchmark and build back the confidence of the industry and investment community,” said Raj Prabhu, CEO of Mercom Capital Group.
The government also addressed the recent issues surrounding the signing of power purchase agreements (PPAs). Singh said that the sanctity of PPAs must be upheld and honoring them should be considered mandatory. The ministry, Singh said, has been in talks with government heads in states like Andhra Pradesh and Karnataka to ensure that this happens. He added that renewable purchase obligations (RPOs) are also mandatory and need to be adhered to strictly.
Kumar also commented that the MNRE is in talks with the Ministry of Finance regarding the confusion about the Goods and Service Tax (GST) rates for solar panels, and all issues will be solved in the next seven to 10 days. Mercom reported on this subject back in July when we were told a clarification would be issued shortly.
Separately, Kumar addressed the power sale agreement (PSA) for 1,000 MW of inter-state transmission system (ISTS)-connected wind projects that was signed earlier this week. Thirty-two GW of wind power projects have already been commissioned toward the agency’s goal of 60 GW of wind power. The central government has been working with state governments to issue bids for about 8 GW of cumulative wind capacity this year, and MNRE plans to issue guidelines for the remaining wind tenders soon.
Mercom also recently reported that the Solar Energy Corporation of India (SECI) had approved a program that would set up 2 GW of ISTS-connected wind projects.
According to Mercom’s Q3 2017 India Solar Market Update, a total of 1,456 MW of solar were tendered and 1,232 MW of solar were auctioned in Q3 2017. That total represented a marked reduction from the activity seen in Q2 2017, when 3,408 MW of solar were tendered and 2,505 MW of solar were auctioned.
Mercom’s third-quarter report noted that conditions in the Indian solar market became more challenging during this quarter because of the spike in Chinese module prices, the pending anti‑dumping case, PPA renegotiations in some states, issues surrounding incomplete infrastructure and evacuation, and confusion about the GST. These developments caused a slowdown in installations, tenders, and auction activity during the period.
Mercom’s India Solar Project Tracker found that India’s cumulative solar installations crossed the 17 GW mark in September 2017. According to MNRE, cumulative wind power installations reached 32.7 GW in September 2017.
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