In what will be a record offering in a financial year, India is set to tender close to 6,650 Mw of renewable energy projects in February. Of this, 2,500 Mw are wind power projects and 4,150 Mw solar. With this, the total projects offered during 2017-18 will exceed a combined capacity of 10,000 Mw. The tranche of projects to be offered includes several state-level projects from Uttar Pradesh (1,000 Mw), Karnataka (200 Mw), Maharashtra (1,500 Mw of wind and solar) and Andhra Pradesh (750 Mw). Wind power projects totalling a generation capacity of 2,000 Mw would be bid out by SECI, a state-run company under the aegis of the Union new & renewable energy ministry. Under the Paris Climate Change accord, India has committed itself to building projects with a combined capacity of 175 Gw renewable energy by 2022. Of this, 60 Gw is solar and 40 Gw wind. The Narendra Modi-led central government last year introduced a competitive bidding process for wind power projects, along the lines of solar. In the 1,500 Mw of projects that have been tendered out, the wind power tariff has fallen to Rs 2.34 per unit. The lowest tariff in solar stands at Rs 2.44 per unit. In its latest report, research body Mercom Capital Group said India had achieved a milestone 20 Gw in cumulative solar installations. Though the MNRE website still maintains that the solar capacity in India is at 16 Gw, the Mercom report further said the top state for solar installations was Telangana, followed by Karnataka, Andhra Pradesh, and Rajasthan. “Twenty GW of solar installations is a laudable achievement for India, considering the initial goal.
However, it took eight long years to reach 20 Gw and hopefully the pace will pick up going forward. Private solar companies in India have gained vital experience over the years and are looking for the government to create an environment conducive to growth and remove the policy uncertainties that are currently plaguing the industry,” said Raj Prabhu, CEO of Mercom Capital Group.According to Mercom’s Q3 2017 India Solar Market Update, a total of 1,456 Mw of solar projects were tendered and 1,232 Mw of solar projects were auctioned in the third quarter of 2017. That total represented a marked reduction from the activity seen in the second quarter 2017, when 3,408 Mw of solar projects were tendered and 2,505 Mw auctioned. According to the annual plan of the ministry, 3 Gw of solar power projects were to be tendered in December 2017, followed by 3 Gw in January 2018, 5 Gw in February 2018, and 6 Gw in March 2018. The plan mentioned that 30 Gw each would be tendered in 2018-19 and 2019-20. However, market experts are cautious about the coming financial year as several regulatory changes would impact the renewable energy landscape. While there is an impending decision on the dumping of imported solar panels, the recent increase in customs duty due to an additional 10 per cent surcharge would escalate the price of solar projects, and thereby impact tariff. Close to 80 per cent of India’s solar power is based on imported content. Solar panels have been inviting 7.5 per cent customs duty since last year. Sector executives said a 10 per cent surcharge over it would escalate the cost of panels and impact tariffs as well. The surcharge comes at a time when there is also lurking fear of safeguards and anti-dumping duty on solar imports coming from China and Malaysia. The Directorate General of Safeguards Duty (DGS) in its preliminary report investigating the dumping of solar cells, (whether or not assembled in modules or panels), has suggested a duty of 70 per cent on the imports coming from China. The industry expects a hike of Rs 1-2 per unit in the solar tariff if the duty is imposed.