India to auction green energy contracts

The ministry of new and renewable energy (MNRE) on Friday announced a clean energy rollout trajectory that will require awarding a mammoth 100 gigawatts (GW) of solar and wind contracts by March 2020. Besides, the government is also working on a plan targeted at farmers to generate 20GW of solar power. This involves setting up small solar projects of 1-2 megawatt (MW) size on fallow land and solarizing water pumps. Of the 100GW to be awarded, 77GW will be solar power contracts. Given India’s ambitious target of 175GW of clean energy capacity by March 2022, the government’s strategy is to complete the bid process by March 2020 so that developers have the time need to construct these projects, said Anand Kumar, secretary, MNRE. Raj Kumar Singh, power and new and renewable energy minister, while announcing a plan to conduct a third wind power auction of 2GW, said there was a long-pending demand from industry to announce a clean energy road map. Singh also spoke about an expression of interest (EoI) to be floated for setting up 20GW of solar manufacturing facility, 5-10GW of floating solar power projects and 10GW of hybrid solar-wind power systems. A Mint report of 10 November spoke about India’s plan to invite bids for setting up 20GW of solar power capacity—the world’s largest solar tender—at one go, in an attempt to spur domestic manufacturing of solar power equipment. (bit.ly/2yMBEEm) India has witnessed a record low solar tariffs of Rs2.44 per unit in May, which firmed up to Rs2.65per kWh in an auction conducted by the Gujarat government in September. India’s wind power tariff 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. It will be a busy time ahead for green energy developers, given the frequency of auctions planned. “For achieving 100 GW solar power target by 2022, the ministry, along with the states, will lay out bids for ground-mounted solar parks for 20GW in 2017-18, out of which 3.6GW have already been bid out, 3GW will be bid out in December 2017, 3GW will be bid out in January 2018, 5 GW in February 2018 and 6 GW in March 2018. Thirty gigawatts will be bid out in 2018-19 and 30GW in 2019-20,” the government said in a statement. By announcing the road map, the government wants to encourage domestic manufacture of equipment. “Against the target of 60GW for wind power, 32GW has already been commissioned. The central government, along with the state governments, intends to issue bids of cumulative capacity of about 8GW this year. Out of this, 5GW has already been bid out, 1,500-2,000MW will be bid out in January 2018 and 1,500-2,000MW in March 2018. A total of 10GW will be bid out in the financial year 2018 and 10GW in 2019,” the statement added. Of the targeted 175GW of clean energy capacity by 2022, 100GW is to come from solar projects. Of this, 60GW will be from ground-mounted, grid-connected projects, and 40GW is to come from solar rooftop projects. Wind power projects are to contribute 60 GW. However, regulatory challenges remain. “Regulatory challenges mainly arise from—a) wide variance in RPO (renewable purchase obligations) norms across states; b) weak compliance of the RPO norms by obligated entities—mainly distribution utilities with an absence of enforcement of penalty framework by State Electricity Regulatory Commissions (SERCs) across most states; c) the risk of forced back-down by the utilities, as seen in a few states,” rating agency ICRA Ltd said in a report.