Despite Record FY24 Auctions, Renewables Brace For Catch-Up Battle Towards 2030
The total awards were, however, lower by 54% as compared with the total tenders issued.
India’s renewable energy sector has seen a fivefold growth in tender auctions and awards in fiscal 2024 over FY23, as drop in panel prices and record imports on account of relaxation in the Approved List of Models and Manufacturers made it easier for companies to participate in tenders. However, that’s less than half of the total tenders issued during the year.
According to data collated by Crisil Ratings and shared with NDTV Profit, total tenders issued in FY24 were 1,11,749 MW, while total tenders auctioned or awarded were 51,732 MW. Though auctions rose five times year-on-year from 12,503 MW in FY23, the awards were impacted by a drop in the auctions for wind and storage projects.
Wind projects awarded in FY24 saw a decline of 36% to 1,844 MW from 2,881 MW a year ago, while awards in storage projects saw a fall of 88% to 250 MW from 2,010 MW a year ago. In comparison, tenders issued for wind projects rose over 149% to 8,450 MW from 3,390 MW a year ago.
“The sharp jump in award of hybrid projects using multiple technologies to diversify power output profile is an indication of the market's need. discoms (distribution companies) and other bulk buyers are moving away from standalone solar and wind projects as they want to manage renewable power’s variability risk," Vinay Rustagi, senior director at Crisil Ratings, told NDTV Profit.
"Many of the new hybrid project configurations use a wind-heavy profile, meaning a significant jump in wind installations over the next few years,” Rustagi said.
Solar project awards were up 523% to 35,391 MW in FY24, as compared with 5,682 MW a year ago. Total solar tenders issued in fiscal 2024 were 79% higher at 52,819 MW, as against 29,571 MW a year ago.
Outlook For FY25 And FY26
Analysts forecast that the outlook for new capacity addition in the coming years is extremely positive, on the back of a strong pipeline of projects in the construction stage.
All segments of the sector are expected to do well due to a sharp fall in module prices and expected jump in domestic module manufacturing capacity, Rustagi said.
Brokerage firm Nuvama said in a report that the solar module prices are expected to range at record lows of $0.11 per watt peak over 2024. Solar module prices stood stable at $0.11/WP in March 2024, down 50% YoY and flat month-on-month.
“We believe domestic manufacturers such as Waaree Energies Ltd., Vikram Solar Ltd. and Reliance Industries Ltd. shall continue with their expansion plans, further supported by strong demand in the high-margin US market,” the Nuvama report said.
The import of solar cells and modules by project developers touched an all-time high in January to 9.9 GW, which was up six times YoY, as developers took advantage of a relaxation in the imposition of the ALMM till April 1. These imported panels will be used for commissioning of upcoming projects, said analysts.
In calendar year 2023, India imported $5 billion worth of PV cells and modules, while exporting $1.9 billion, or 5 GW, worth of solar modules, primarily to the lucrative US market.
“We reckon exports to US shall continue over 2024 until new capacities come on stream in the US market,” the Nuvama report said.
The drop in cells and module prices is a win-win for Indian manufacturers as well as developers in the coming years, analysts said.