Analysing the Impact of Tender and Auction Declines on India’s Clean Energy Goals
Tenders and auctions are the primary mechanisms through which renewable energy projects are allocated in India. These competitive bidding processes have helped drive down costs and attract private investments.
May 20, 2025. By News Bureau
Declining Momentum with Tender and Auction Slowdown
This decline stems from a combination of regulatory uncertainty, land acquisition challenges, grid integration issues, and financial instability among distribution companies (DISCOMs) such as:
- Delayed Power Purchase Agreements (PPAs) and Payment Defaults - DISCOMs often delay signing PPAs or make delayed payments, affecting the financial viability of projects.
- Ceiling Tariffs and Policy Uncertainty - Arbitrary ceiling tariffs imposed by the government reduce profitability, discouraging bidders from participating.
- Grid Constraints - Lack of adequate transmission infrastructure results in bottlenecks, especially for large-scale solar and wind projects.
Implications for India’s Clean Energy Goals
If this trend continues this may cause the following:
- India may fall short of its 2030 commitments under the Paris Agreement, undermining global climate goals.
- Private and international investors may shy away due to increased policy and financial risks.
- Delayed expansion in renewables can force reliance on coal and imported fossil fuels, increasing vulnerability to global energy price shocks.
- The renewable energy sector was projected to create nearly 1 million new jobs by 2030. A slowdown could stall employment growth in this critical sector.
The Way Forward and Addressing the Core Issues
-Strengthening DISCOMs - Financially empowering distribution companies through reforms, debt restructuring, and improved collection efficiencies is crucial to ensuring timely payments and signing of PPAs.
-Transparent and Investor-Friendly Policies - Removing tariff ceilings and offering greater predictability in policy frameworks can restore investor confidence. The introduction of Green Open Access Rules (2022) was a step forward, but broader policy coherence is needed.
-Accelerating Transmission Infrastructure - Investments in green energy corridors, especially under the GEC-II scheme worth INR 12,000 crore, must be fast-tracked to accommodate the surge in renewable energy supply.
-Decentralised and Hybrid Models - Encouraging rooftop solar, floating solar, and hybrid renewable models (wind-solar-storage) can help diversify generation sources and ease land acquisition challenges.
-Digitalisation and Forecasting- Using AI and smart grids for better demand forecasting and integration of renewables can reduce curtailment and improve efficiency.
The coming years will be critical in determining whether India can transform its clean energy vision into reality. Political will, regulatory clarity, and infrastructure readiness must converge to reignite momentum, ensuring that the world’s third-largest emitter turns into a leader in the green energy revolution.
please contact: contact@energetica-india.net.
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