India issues record 73 gigawatts of utility-scale renewable energy tenders in 2024: Report

Mumbai: India has issued a record 73 giga-watts (GW) of utility-scale renewable energy tenders in 2024 eclipsing 58 GW of 2023, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

This far exceeds the Ministry of New and Renewable Energy’s annual target of 50GW. Further, nearly half of the tenders in 2024 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 evolution of renewable energy tenders demonstrates that market stakeholders are actively working to overcome shortcomings,” says the report’s contributing author, Vibhuti Garg, Director, South Asia, IEEFA.

“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,” she adds.

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

“Tender under-subscription is emerging as a challenge for tendering authorities. Last year, about 8.5 GW of utility-scale renewable energy tenders went undersubscribed, five times more than in 2023, owing to

complex tender designs, aggressive bidding during reverse auctions and delays in the readiness of the interstate transmission system (ISTS) infrastructure,” says the report’s co-author, Prabhakar Sharma, Senior Consultant, JMK Research.

Further, the report also highlighted delays in signing power sale agreements (PSA) with energy off-takers, which have now exceeded 40GW.

Solar Energy Corporation of India (SECI)-led tenders comprise 30% (12 GW) of the large backlog of unsigned PSAs.

Tender cancellations are also on the rise. From 2020 to 2024, 38.3GW of utility-scale renewable energy capacity was cancelled, accounting for about 19% of the total issued capacity during that period.

Cancellations were due to tender design issues, location or technical complexity, under-subscription and PSA delays, the report finds. “Delays in project implementation pose a significant challenge to India’s renewable energy target for 2030,” says the report’s co-author, Ashita Srivastava, Senior Research Associate, JMK Research.

“Ongoing issues with project realisation could deter investor interest in future renewable energy projects in India, potentially affecting the availability of low-cost financing from large-scale investors,” he adds.

The report recommends authorities focus equally on all aspects of the tendering process, from issuance of requests for selection to allotment and signing of PSAs, 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.