India has lined up an ambitious plan to award 100 gigawatts (GW) of solar and wind contracts by March 2020
New Delhi: The world will remember 2017 as the year of announcements for the largest global clean energy tenders. Jockeying for the podium position is India, which has lined up an ambitious plan to award 100 gigawatts (GW) of solar and wind contracts by March 2020.
This is no mean task given that the country has not tried anything yet on such a scale.
The auction jamboree also includes a plan to invite bids for setting up 20GW of solar power capacity—the world’s largest solar tender—at one go, to spur domestic manufacturing of solar power equipment.
Of the 100GW of contracts that the ministry of new and renewable energy will award, 77GW will be solar power projects and the remaining 23GW wind power contracts. Last week’s announcement by India’s power and new and renewable energy minister Raj Kumar Singh has made global developers sit up and take notice.
The tender calendar will follow a hectic schedule. While 3GW will be bid out in December 2017, 3GW will be bid out in January 2018, 5GW in February 2018 and 6GW in March 2018; 30GW will be bid out in 2018-19 and 30GW in 2019-20. On the wind contracts front around 1,500-2,000MW will be bid out in January 2018 and 1,500-2,000MW in March 2018. This will be followed by 10GW contracts to be bid out in the financial year 2018 and 10GW in 2019. India will also conduct auctions for 5-10GW of floating solar power projects and 10GW of hybrid solar-wind power systems.
“It’s going to be a busy holiday season," said the chief executive officer of a solar project developer firm that has bid aggressively in the previous auction rounds. He declined to be named.
The execution seems like a tall order given that most states are yet to align their renewable purchase obligation (RPO) trajectory with that of the Union government’s.
According to the RPO trajectory projected by the Centre, states shall procure 11.50% of their electricity demand from clean energy sources (solar and non-solar) in 2016-17, 14.25% in 2017-18 and 17% in 2018-19. These RPOs hold the key to India achieving its ambitious target of 175GW of clean energy capacity by March 2022.
“It is a tough task, given the frequency and the quantum involved. The real test will be for the states to firm up their commitment plans," said a person associated with conducting the green energy contract auctions.
However, Singh sounds determined to meet India’s global commitment and find a solution.
“The Constitution provides for it in the case of international obligations," Singh said last Friday.
Given the aggressive auction plans, some believe that India’s wind and solar energy tariffs will further dip. India already witnessed a record low solar tariff of Rs2.44 per unit in May, which firmed up to Rs2.65per kilowatt-hour (kWh) in an auction conducted by the Gujarat government in September. Wind power bids followed suit and also fell to a record low of Rs2.64 per unit in an auction conducted by state-run Solar Energy Corp. of India in October.