NEW DELHI : According to a report by JM Financial Institutional Securities Ltd, only half of the 53 gigawatt (GW) solar energy contracts offered by India are under construction.

mint previously reported lower clean energy tariffs putting already allocated solar and wind capacity in limbo. Fund-strapped public electricity distribution companies (discoms) are unwilling to sign Electricity Supply Agreements (PSAs) with intermediary buyers such as the Solar Energy Corporation of India (Seci) operated by the Status for those previously awarded projects at a comparatively higher rate.

“The delay of the Discoms in the signing of the PSA results from the weak growth in demand and the fall in solar tariffs, which means that the last to sign the PSA obtains the cheapest electricity. However, we estimate 32 GW of new PSA potential if all states meet their RPO (Renewable Energy Purchase Obligation) targets, ”the report says.

This comes at a time when Chinese suppliers of solar equipment are increasing the price of solar modules to 25 cents per kWh, from 19 cents per kWh. Suppliers renounce their contracts for the supply of equipment already contracted, even if their bank guarantees are cashed.

The report said: “We only find 50% under construction because 35% are missing PSAs, while 14% have been canceled. Of the remaining 27 GW, approximately 44% include PSAs with discos while 56% include state tenders that have an implied PSA with respective discos. “

In addition, clean energy developers are considering riskier government contracts.

The report said: “With Seci’s tenders struggling to secure PSAs, the trend is again towards individual state tenders, which offer ready PSAs, although they present a high risk of debt to the credit rating of each state.

This comes at a time when the country’s peak electricity demand is increasing and surpassing the 200 GW mark. India currently has an installed renewable energy capacity of 89.63 GW, with 49.59 GW running.

According to ICRA Ratings, India’s renewable energy capacity addition will increase to at least 10.5 GW in the current fiscal year, compared to 7.4 GW in fiscal year 21. According to the rating agency, there is a strong project portfolio of 38 GW and an additional 20 GW of clean energy projects being tendered.

“The CoD calendar (date of commissioning) implies additions of 17 to 18 GW during fiscal year 22, on the impact of covid19 from fiscal year 21, which saw the addition of 5.5 GW versus the peak of 14.5 GW in FY17. Yet the pipeline beyond FY22 is weak, unless other tenders with signed PSAs emerge. The current bidding pipeline for fiscal year 22 is 10 GW, ”the report adds.

India has a solar power generation capacity of 41.09 GW, with plans to reach 100 GW of solar power by 2022.

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