Renewable Energy Projects in India Surge, Exceeding 69 GW Tender Issuances: IEEFA Report

Large-scale renewable energy projects in India have garnered significant attention from both domestic and international entities, with tender issuances surpassing a record-breaking 69 GW, driven by government support, reveals a new joint report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

According to the report, the tender issuances for utility-scale renewable energy projects in the fiscal year 2024 (FY2024) far exceeded the government's target of 50 GW, signaling a substantial leap forward for the sector.

Vibhuti Garg, Director – South Asia at IEEFA, commented on the market's resilience, stating, "After a slump from 2019 to 2022 due to supply-chain issues and global price spikes brought on by the COVID-19 pandemic and Russia’s invasion of Ukraine, the market has rebounded and gone from strength to strength."According to the report, the tender issuances for utility-scale renewable energy projects in the fiscal year 2024 (FY2024) far exceeded the government's target of 50 GW, signaling a substantial leap forward for the sector.

Garg emphasized the attractiveness of the Indian renewable energy market to investors, citing factors such as its vast growth potential, government support, and favorable regulatory frameworks.

The report also highlighted significant innovations in renewable energy tendering, including India’s inaugural large-scale offshore wind tender totaling 4 GW and a forthcoming 500 MW concentrated solar + thermal storage tender.

Furthermore, there has been a notable increase in tender issuances for energy storage systems (ESS) projects, emphasizing their importance in India’s renewable energy infrastructure.

Jyoti Gulia, Founder of JMK Research, emphasized the growing preference for more reliable renewable energy output, stating, "Energy offtakers’ preference for a less intermittent and improved profile of renewable energy output has increased considerably."

Solar and wind tenders constituted just over half (57 percent) of the renewable energy tenders issued in FY2024, with the remainder comprising wind-solar hybrid and renewable energy combined with ESS.

State-level tendering authorities, such as Gujarat Urja Vikas Nigam Limited (GUVNL) and Rajasthan Urja Vikas Nigam Limited (RUVNL), played significant roles in FY2024 tender awards, highlighting the decentralization of the renewable energy landscape.

Ashita Srivastava, Senior Research Associate at JMK Research, noted that approximately 80 percent of tenders awarded in FY2024 were location-agnostic, offering developers flexibility in project placement with Inter-State Transmission System (ISTS) connectivity.

Despite the sector's momentum, challenges persist, including the imposition of 40 percent import duties on solar modules and requirements for developers to procure locally manufactured components.

Prabhakar Sharma, Senior Consultant at JMK Research, explained, "Solar module prices have halved since August 2022, however, this trend has not translated to solar tariffs," citing barriers such as basic custom duties and approved lists of models and manufacturers.

Gulia concluded, "Market stakeholders believe that annual tendering capacity will again cross the national target of 50 GW in FY2025, with accelerated allotment as unawarded tenders from FY2024 conclude their auctions."

The report remains optimistic about India's renewable energy trajectory, projecting that tendering activity in FY2024 affirms the country's progress towards achieving its 2030 target of 500 GW.