India's renewable tenders market shows robust demand in H1 2024

Competitive tenders continue to drive pipeline growth for renewables and energy storage projects in India. In the first half, about 70 GW of tenders were announced while 33 GW of capacity was awarded to successful bidders.

Capacity awarded was normalized in the second quarter with about 7 GW of renewable projects in competitive tenders, as compared to a record 26 GW during the first quarter. These trends align with India's target for 50 GW of annual renewable capacity allocations towards its target of 500 GW of non-fossil fuel installed capacity by 2030.

As of June, the total renewable capacity has reached 148 GW along with a massive pipeline of about 140 GW projects in different stages of development.

More than 18 GW of new renewable capacity is requested in Q2

Growth in capacity requested via competitive tenders represents a growing appetite for renewable energy in India. This is reflected by the doubling of capacity requested to 18 GW in Q2 as compared to the same quarter last year.

Capacity requests continue to be dominated by federal agencies including the Solar Energy Corporation of India, NTPC Ltd., SJVN Ltd. and NHPC Ltd., who requested about half of the total tendered capacity in Q2. These federal agencies awarded about three-fourths of the total 7 GW renewable projects during Q2 and the remaining one-fourth capacity is awarded by state-level agencies.

About 60 GW green energy tenders available for bids at the end of Q2

While about 20 GW of new capacity was requested during Q2, 40 GW capacity remained open and slipped through from previous quarters. About half of the available tenders are requested for solar PV projects, followed by 18% of hybrid renewables with or without storage and about 9% of onshore wind projects. About 6% of the available tenders are for standalone energy storage.

Usually, it can take up to six months to close a tender from the initial request for procurement. However, delays can be expected due to administrative as well as techno-commercial reasons including unsustainably low benchmark tariffs, stringent bid conditions, or shortage of grid capacity in high-resource areas.

Top five winning companies secured over two-thirds of the awarded capacity in Q2

The renewables market continues to be highly competitive with more than 30 companies winning projects during Q2. The largest portfolio owners including Avaada Energy, JSW Energy Ltd., ReNew Energy Global PLC, Juniper Green Energy Pvt. Ltd., and Ampin Energy won a majority of the 7 GW capacity awarded during this period.

The largest winners are largely independent power producers and diversified utilities operating only in India, whereas less than 5% of the capacity awarded during the quarter was won by international companies.

Solar tariffs steady around $33/MWh on year

The average solar tariff for projects awarded in Q2 was about $33/MWh increasing by about 2% quarter on quarter. On the other hand, the average solar tariffs declined by about 6% year on year compared with the same quarter last year.

Hybrid wind-solar tariffs increased by about 13% year on year, but saw a 5% quarter-on-quarter decline.

The tariff for standalone energy storage in Q2 fell by about 20% to about $4,500/MW per month quarter on quarter.

Tender targets within reach

India will comfortably achieve its annual target of awarding 50 GW in 2024. Historically, during 2020-2023, India awarded on average 16 GW of renewable projects in tenders annually. A scaling up of tendering activity reflects an acceleration towards energy transition goals.

Read: India closes record 26 GW renewable tenders in Q1 2024

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