India’s renewable energy prospects mark milestone with record tenders in 2024

Competitive tenders continued to drive the pipeline growth for renewables and energy storage projects in India in 2024, with 63 GWof capacity awarded and 111 GW of new tenders announced.

This marked the highest annual capacity awarded to date, with federal and state renewable energy implementation agencies responsible for tendering renewable energy projects surpassing their annual target of allocating 50 GW capacity in 2024.

About 46 GW capacity was still available for bids as of end-2024. Once closed, this capacity will further strengthen India's burgeoning pipeline of 172 GW of renewable projects in different stages of development.

India closed 2024 having installed more than 162 GW of renewable capacity, with an ambitious target to more than triple this figure by fiscal year 2032.

A growing appetite for renewables

A substantial increase in capacity requested via competitive tenders during the last few years represents a growing appetite for renewable energy in India driven by rising power demand, ambitious policy targets and a maturing competitive landscape.

Federal agencies, including SECI Ltd., NTPC Ltd., SJVN Ltd. and NHPC Ltd., are leading the charge accounting for about half of the total tendered capacity and more than 60% of the awarded capacity in 2024.

Another third of the capacity is awarded by state-level implementing agencies and distribution utilities.

Stable demand for tenders to persist

At the end of 2024, about 46 GW of renewable energy tenders remained available for bids, reflecting a robust pipeline of demand for new projects.

Of the total 111 GW of tenders requested in 2024, 60% were allocated to solar PV projects for both utility-scale and distributed applications, regardless of storage. Hybrid renewables, with or without storage, followed closely with 26% tenders. Onshore wind and energy storage each accounted for 5% while offshore wind comprised 4% of the capacity requested.

Tenders for storage projects both standalone and collocated with renewables have gained further prominence, owing to the need for firm supply from variable renewable sources, and improving economics for batteries.

Top players have an edge in winning tenders

Despite intense competition in the market, with over a hundred companies participating and winning bids in 2024, 10 largest developers secured 60% of the capacity.

Renewable Independent Power Producers and diversified utilities, such as Avaada Energy Pvt. Ltd., JSW Energy Ltd. and Adani Green Energy Ltd., each won more than 5 GW of capacity in 2024, while ReNew and Juniper Green Energy Pvt. Ltd. each secured over 3 GW.

These companies have large existing portfolios of operating assets and have successfully attracted investments from diverse sources, including foreign institutional investors from North America, Europe and the Middle East. Such factors enhance their risk appetite, enabling them to win pipeline projects in competitive tenders.

Tariffs at risk of increase

The average tariff for solar projects awarded in 2024 was about $31/MWh, decreasing slightly from an average of $32/MWh in 2023. Tariffs for onshore wind projects increased 11% year on year as new projects are expected to be developed in low to medium-wind speed sites due to high-resource sites running out. Similarly, tariffs for hybrid wind-solar projects increased by about 8% year on year.

Toward the end of 2024, the solar tariffs in competitive tenders started trending upwards. Although global module prices have decreased, India's tighter mandates for domestic content requirements for solar cells, combined with existing regulations for locally sourced modules will put upward pressure on project costs and resulting solar bid prices.

Similarly, an increase in wind tariffs is expected to be sustained unless new high-resource sites with land and grid infrastructure are accessible, alongside the repowering of assets at the end of their life.

2024 emerged as a landmark period for India's renewable energy sector, characterized by record tender activity and a strong commitment to greening the grid with a higher share of renewables in the power mix.

As the country strives to achieve a 50% share of non-fossil fuels in total capacity, the rising tenders signal a robust future for renewable energy in India.

Further reading: India Renewable Energy Tender Tracker(opens in a new tab)