While significantly more solar power capacity was auctioned and tendered in Q2 over Q1, auctioning has slowed down since June due to several factors, including renegotiation risks for PPA tariffs to match quickly decreasing cost of solar power.
- Indian solar auction activity slowed down with only 76 MW auctioned in August 2017
- Auction activity decreased constantly from June to August
- Still, in Q2/2017, both total capacity tendered (3.4 GW) and auctioned (2.5 GW) was higher than in Q1
- In August, biggest tender capacity was 250 MW launched by NTPC
- Rooftop solar category saw only 67 MW auctioned in a tender that was oversubscribed
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Auction activity in Indian solar sector has dropped drastically in August, when only 76 GW solar capacity was auctioned, dropping 95% from June when auctioned capacity reached 1.5 GW (see India Tendered 1.36 GW Solar In June 2017). In July 2017, 554 MW was auctioned, according to Mercom Capital Group. This means, for three month in a row, auction numbers went down.
Tender announcements picked up pace, increasing sequentially 15% in August, after India saw 633 MW of solar power tendered in July, but this is not reflected in auctions.
Indian utility National Thermal Power Corporation (NTPC) tendered 250 MW solar power in the domestic content requirements category (see NTPC Floats 250 MW DCR PV Tender). Later, it also launched three separate DCR tenders of 241 MW cumulative capacity.
Another major tender during August 2017 was issued by Maharashtra State Power Generation Company (MAHAGENCO) with 110 MW capacity (see Maharashtra Tenders 110 MW).
In the rooftop category, over 67 MW was auctioned to a number of companies in a tender that was oversubscribed (see 67 MW Rooftop PV Awarded In Indian Railways Bid).
Overall, in Q2/2017, 3.4 GW of capacity was tendered, while 2.5 GW was auctioned. This is significantly higher than in the previous quarter – in Q1/2017 only 1.85 GW was tendered and 1.3 GW auctioned.
As much as the Indian solar sector is growing, challenges are also appearing that seem to be holding the market back. “Uncertainty around GST, the pending antidumping case, DISCOMs looking at developers to match the lowest possible tariff have all contributed to the freeze in solar auction activity in India,” said Priya Sanjay, Managing Director of Mercom India (see 7 GW PV In India Face Renegotiation Risk).