Grid constraints damage auction appetite

INDIA: Since early 2017 India has seen nearly 7.5GW of capacity procured through auctions, but the industry growth looks set to slow down in the face of limited grid access.

India's transmission constraints are affecting developer confidence in tenders (pic: Catherine Early)
India's transmission constraints are affecting developer confidence in tenders (pic: Catherine Early)

According to local media reports, a recent tender from the Solar Energy Corporation of India (SECI) for 2GW of capacity has attracted only about 1.2GW in bids.

The four participants — ReNew Power, Adani Green Energy, Sprng Energy and Alfanar Energy — bid 300MW each.

By contrast, the past six federal and state tenders were oversubscribed by 20-60%.

Elsewhere, state utility Gujarat Urja Vikas Nigam (GUVNL), annulled a 500MW tender it was holding following several delays to address stakeholder queries.

Industry insiders attribute grid access issues for the lack of response in the SECI auction and Gujarat tender annulment.

The SECI tenders demand that wind power projects are to be connected to the central transmission utility (CTU) and the bidders are expected to ensure availability of required connectivity at the central transmission substations.

Although CTU’s infrastructure has adequate capacity to handle and integrate planned wind power capacity, the main bottleneck is the connectivity point to the substations.

The situation is aggravated by the fact that majority of the projects are concentrated in small areas.

Out of the 6GW capacity bid for the federal SECI auctions, nearly 5GW is concentrated across two substations: 4GW at Bhuj Pooling substation in Gujarat and 950MW at Tirunelveli Substation in Tamil Nadu.  

This level of concentration has severely constrained connectivity capacity availability.

For example, the Bhuj Pooling station can accommodate only about 2.7GW of capacity as against 4GW being planned for development.

Despite the slowdown, the government and industry believe the dip, though real, will only be temporary.

Plans for targeted infrastructure expansion are already in place and in many cases building work has already started. 

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