Indian federal government set to axe e-reverse auctions for renewables projects

Jul 19, 2022 11:28 AM ET
  • India's federal government will certainly quit the digital reverse auctions of renewables projects in the nation amid fears it is leading to "unhealthy competitors".
Indian federal government set to axe e-reverse auctions for renewables projects
Image: Government of India

Reported recently (14 July) by The Economic Times India, the step has been called necessary to reverse the pattern of artificially low tariffs bring about unhealthy competitors.

Assistant of the Ministry of New and also Renewable Energy (MNRE), Indu Shekhar Chaturvedi, stated on Thursday that the decision had been made "in-principle".

" An in-principle choice has been taken. There were complaints from the sector that e-reverse auctions is resulting in the tolls being unnaturally reduced bring about unhealthy competition," he stated.

Originally focused on wind power, the choice to return back to the normal single bidding process route is most likely to filter to various other renewable innovations. The Economic Times India cites a senior exec at the MNRE as saying, "If the e-reverse auction for wind is being removed on openness worries, how can it be sustained for other renewable energy projects."

Some, however, have doubted the wisdom behind the action, defining it as "the wrong solution to the incorrect problem".

Vinay Rustagi, taking care of supervisor of research study company Bridge to India, informed PV Tech that "to say that all problems with unviable projects are to e-auctions is a gross misstatement".

" Auctions were a double-edged sword-- they permitted prospective buyers to enter at reasonable degrees in the initial stage and after that play it relying on situation in the live activity room," Rustagi said. "Currently with only one chance at success as well as no access to bidding process details from the previous round, designers will certainly be bidding completely blind."

Because of this, Rustagi believes aggressive bidding process will proceed as "desperate bidders will certainly bid a lot more aggressively".

" The actual problem is threefold," he suggested, "low demand, oversupply of funding as well as absence of technique among developers, which is making bidders hopeless to win projects."

We saw multiple instances even with auctions where people went too strongly in first round when there was little competitors."

At the same time, the Indian solar market is suffering from component shortages as the country's fundamental customizeds responsibility on solar cells and also modules have actually tightened supply. However the MNRE recent claimed there was no strategies to alter this policy.

That said, Fitch Option projections that India will greater than increase its solar capacity in the next years, increasing from 49.3 GW since year-end 2021 to 139.5 GW by 2031.

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