India issues more utility-scale renewable tenders in 2024

Last year’s data also exceeded the government’s target.

India issued a record-high of 73 gigawatts (GW) of utility-scale renewable energy capacity in 2024, a jump from the previous year’s 58 GW,  according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

According to the report, tthis exceeds the Ministry of New and Renewable Energy’s annual target of 50 GW. Further, nearly half of the tenders last year were for non-vanilla renewable technologies like wind-solar hybrid and battery energy storage in response to demand from energy off-takers for improved power quality.

“The renewable energy market has matured considerably, and all stakeholders, from investors to energy off-takers, have built a strong understanding of the intricacies of renewable energy technologies,” said the report’s contributing author, Vibhuti Garg, Director – South Asia, IEEFA.

The report also found that the surge in tendering activity brought new challenges that could temper investor enthusiasm and delay or cancel major projects.

Prabhakar Sharma, senior Consultant at JMK Research and the report’s co-author, said tender under subscription is emerging. About 8.5 GW of utility-scale renewable energy tenders went undersubscribed last year, five times more than in 2023.

Sharma said this was due to “complex tender designs, aggressive bidding during reverse auctions, and delays in the readiness of the interstate transmission system (ISTS) infrastructure.”

The report also noted delays in signing power sale agreements (PSA) with energy off-takers, which have now exceeded 40 GW. Solar Energy Corporation of India (SECI)-led tenders comprise 30% (12GW) of the large backlog of unsigned PSAs.

From 2020 to 2024, renewable energy tender cancellations reached 38.3 GW, or 19% of issued capacity. The cancellations were driven by problems with tender design, project complexity, undersubscription, and PSA delays, the report said.

The experts are encouraging authorities to focus equally on all aspects of the tendering process to keep momentum high on adding renewable energy capacity via such tenders.

“In addition to issuing tenders, the government should establish annual targets for both allotments and the execution of PSAs. This will ensure that renewable energy implementing agencies (REIAs) issue bids only after securing the necessary offtake agreements,” says the report’s co-author Deepalika Mehra, Research Associate at JMK Research.