Only 9% of renewables announced since 2018 currently being installed: Report

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June 12, 2021 1:30 AM

Currently the installed renewable energy capacity in the country is 95,656 MW, and the report says that cumulative capacity addition in 2021 and 2022 is expected to be 17,100 MW. This pace makes it impossible to achieve the target of 1,75,000 MW of renewable energy capacity by 2022-end.

To help these projects find buyers, the report suggested that the central off-takers (SECI, NTPC) “can explore a tariff rediscovery mechanism for stranded projects in consultation with the project promoters”, which can “turn around many stranded projects with better deals to the state-run power distribution companies, already stressed with high power purchase cost”.

Among the 84,408 mega-watt (MW) of large-scale renewable energy projects announced since the beginning of 2018, only 8,039 MW are currently under-construction and the remaining capacities are still under various stages of implementation, a report jointly released by Ficci and Ernst & Young pointed.

The report, which tracked the development of 332 renewable energy projects of 84,408 MW capacity announced since 2018, found out that tariffs have already been discovered through auctions for 57,154 MW renewable energy projects, but these are under various stages of signing power purchase agreement (PPA), getting approvals from regulators, completing financial closure, land acquisition and seeking permission for grid interconnection.

Currently the installed renewable energy capacity in the country is 95,656 MW, and the report says that cumulative capacity addition in 2021 and 2022 is expected to be 17,100 MW. This pace makes it impossible to achieve the target of 1,75,000 MW of renewable energy capacity by 2022-end.

As FE reported earlier, of the 1,43,000 MW of tenders floated for building solar capacities since FY17, around 78,000 MW have been cancelled. Discoms had developed cold feet on buying power from these projects at tariffs discovered under auctions after much lower prices discovered under subsequent auctions.

In the hope of finding better tariffs, Uttar Pradesh has recently cancelled the February, 2020 auction for 184 MW of solar power plants, joining the list of Gujarat and Andhra Pradesh that have taken similar steps.

“Our analysis of the utility scale RE power project pipeline indicates that projects with around 20 GW of contracted capacity from auctions held in the years 2018, 2019 and first half of 2020 remain stranded without PPAs,” the report said, adding that the average tariff discovered for all the stranded projects are 12% higher than those for which PPAs are executed.

To help these projects find buyers, the report suggested that the central off-takers (SECI, NTPC) “can explore a tariff rediscovery mechanism for stranded projects in consultation with the project promoters”, which can “turn around many stranded projects with better deals to the state-run power distribution companies, already stressed with high power purchase cost”.

The 84,408 MW green power projects in pipeline would need around Rs 4.25 lakh crore of capital infusion for operationalisation, translating into Rs 1.27 lakh crore of equity infusion and Rs 2.97 lakh crore of debt. Much of this capital infusion is expected from the private sector increasingly backed by private equity investors, sovereign wealth funds and other specialised institutional investors, the report pointed.

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