星期日, 4月 11, 2021
Home PV News Backlog of unsigned power sale agreements risks slowing India’s renewable energy growth:...

Backlog of unsigned power sale agreements risks slowing India’s renewable energy growth: Report

It added that PSAs for 19 GW of capacity tendered by the SECI was yet to be signed by state-owned discoms

Delays in signing power sale agreements (PSAs) are a bottleneck in the growth of renewable energy capacity in India, dampening investor confidence and threatening the viability of projects, according to a latest study.

PSAs for 19 gigawatt (GW) of capacity tendered by the Solar Energy Corporation of India (SECI) was yet to be signed by state-owned discoms, according to the report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research.

It further added that manufacturing-linked solar projects accounted for the majority — 63 per cent — of this capacity.

“This situation is having an adverse impact on the morale of project developers and investors and is slowing overall progress on renewable energy installation,” said Vibhuti Garg, co-author, energy economist and India lead, IEEFA.

She added that the missing link of PSAs affected the entire value chain.

“For example, without the assurance of the offtake of power for auctioned renewable energy projects, it becomes virtually impossible for developers to secure debt financing,” said Garg.

The report said that developers with SECI-tendered projects in their pipelines awaiting PSAs included Adani, Azure Power, ReNew Power, and Greenko, which together formed 78 per cent of the total capacity in limbo.

On average, 37 per cent of the entire project portfolios of these prominent developers were SECI-tendered projects with non-executed PSAs, it added. And according to Garg, this significant share of capacity posed a risk to the overall conversion of projects in the pipeline.

Regarding the reason for the discoms’ reluctance to sign PSAs, the study said that falling solar tariffs, driven by declining solar module prices were the key reasons.

“In 2020 we saw solar tariffs hit a record low of Rs 1.99 per unit. Discoms are anticipating that solar module prices will decline further, leading to a reduction in future solar auction tariffs, so they are delaying signing PSAs at higher prices,” said Jyoti Gulia, co-author and founder, JMK Research.

Gulia, however, added that with electricity demand now picking up and the imposition of 40 per cent basic customs duty on solar modules, tariffs were not likely to fall further in the near-term.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Maxeon Solar might open a 1.8-GW solar panel assembly plant in the United States

When SunPower spun off its solar panel manufacturing efforts into new company Maxeon Solar Technologies in Aug. 2020, the plan was for SunPower to...

174 Power Global developing 200-MW Colorado solar project for regional utility

174 Power Global has entered a 15-year PPA with Black Hills Energy to develop the 200-MW Turkey Creek Solar facility in Pueblo County, Colorado. “We...

Wells Fargo sole off-taker on 58-MW solar project developed by NextEra Energy

Wells Fargo signed a 20-year PPA on a 58-MW North Carolina solar project being developed by a subsidiary of NextEra Energy Resources. The banking...

National Solar Tour will be hosted online and in-person this year

The American Solar Energy Society (ASES) announced the 2021 edition of the National Solar Tour. This annual grassroots solar event will take place virtually...