Various government agencies floated solar tenders totaling approximately 5 GW in the first quarter (Q1) of the calendar year (CY) 2022, a decrease of 18% compared to the previous quarter, according to Mercom India Research. Tender announcements were down by 52% year-over-year (YoY) compared to the same period last year.

A slowdown in tender announcements by Solar Energy Corporation of India (SECI) in Q1 contributed to the decline in activity.

There was a 91% drop in SECI’s tender announcements compared to the previous quarter, as it has been trying to clear the backlog of power sale agreements with the distribution companies (DISCOMs).

The tender activity is expected to resume in the coming quarters.

The growth of solar in states is driven by the renewable purchase obligation of the DISCOMs. Most states are yet to notify their revised RPO targets aligned with 2022 capacity obligations, and many DISCOMs are waiting for these RPO revisions to prepare their plan of action.

Auctions were held for almost 2.7 GW of solar projects in Q1 2022, a 37% drop compared to Q4 2021. The auction activity was down by 66% YoY compared to the same period last year.

Clarity on the basic customs duty applicable from April 1, 2022, is also expected to pave the way for auction announcements in the next few months.

Top agencies issuing tenders

NTPC led the activity, with 35% of the total tenders floated in Q1 2022. Maharashtra State Electricity Distribution Company Limited (MSEDCL) issued 26% of the total tenders floated, followed by Gujarat Urja Vikas Nigam Limited (GUVNL) with 10%, Madhya Pradesh Urja Vikas Nigam Limited with 9%, and Gujarat State Electricity Corporation Limited with 6%.

SECI contributed about 3% of the tenders announced in the quarter, compared to 27.5% in Q4 2021.

Major tenders floated in Q1 2022

MSEDCL issued a request for selection (RfS) to procure 865 MW of solar power from existing and new projects to be developed in the state. The ceiling tariff for the tender was ₹3.10 (~$0.041)/kWh.

GUVNL invited bids from developers to purchase power from 500 MW of grid-connected solar power projects (Phase-XIII).

NTPC Renewable Energy invited bids from developers to set up interstate transmission system (ISTS)-connected energy storage systems of 3,000 MWh capacity with 500 MW renewable energy (solar or wind) capacity anywhere in India.

Important auctions in Q1 2022

In SECI’s auction for 1,200 MW, ISTS-connected solar projects (Tranche-X) in Karnataka, Project Eight Renewable Power (Ayana Renewable Power), and SolarOne Energy (Fortum) were declared winners.

NTPC announced the auction results for a balance of systems (BoS) package for the 735 (3*245) MW Nokh solar project in Rajasthan. The winners were Larsen & Toubro, Amara Raja Group, and Jakson Group.

Fortum Power (Alpha Energy), SJVN, Hinduja Renewables Energy, and UPC Renewables (AMSA Solar Energy) were declared winners in the GUVNL’s auction to purchase power from 500 MW of grid-connected solar projects (Phase XIII).

Subscribe to Mercom’s India Solar Tender Tracker to stay on top of tender activity in real-time.