There has been a lot of doom and gloom surrounding the Indian market in recent months.
In January, the Indian Credit Rating Agency (ICRA), an arm of financial services company Moody's, downgraded wind sector outlook from stable to negative due to uncertainties related to tender participation and implementation issues.
ICRA noted that tendering levels had fallen by 67% with only 2.8GW tenders rolled out by central government agencies, against 6.9GW in 2018.
The 2019 annual capacity installation was also muted at 2.4GW, only marginally more than 2.3GW in 2018 but way below the requirement if India is to achieve its 60GW target by 2022.
In October 2019, ICRA downgraded nearly 1.9GW of wind and solar capacity in the face of delayed execution due to land and grid issues and persistent payment delays from utilities.
However, the rating downgrade seems to have had a limited impact on new investments in the wind sector and the appetite of foreign backers remains high.
At the World Economic Forum in Davos this year, the government of Madhya Pradesh secured investment commitments of INR 40 billion ($560 million) for two wind power projects of 325MW each from Japan investor Soft Bank Energy and the UK-based private equity group Actis.
The year-old government assured investors it would provide all facilities including land and infrastructure for development.
The new projects could be the first in Madhya Pradesh after a hiatus of nearly three years since the introduction of the tender regime in early 2017.
Another major overseas investment has come in the form of a new renewable energy platform for India, O2 Power, launched by Swedish Private Equity company EQT Infrastructure and Singapore-based holdings company Temasek.
The platform has already received $500 million of equity commitments and aims to achieve 4GW of installed solar and wind capacity.
Fabian Gröne, investment advisor to EQT Infrastructure said, "India presents significant investment opportunities being the second-largest renewable energy market in the world."
More importantly, there have been a few silver linings related to new tenders.
In one of the major development, India's first wind-solar-storage hybrid tender found bidders for 1.2GW capacity that offered a peak hour tariff of INR 6.12-6.85/kWh ($0.086-$0.096/kWh).
The ability of these projects to deliver power at peak times with these attractive tariffs can change the game for renewables significantly.
Another major 700MW private wind-solar hybrid tender from the utility Adani Electricity Mumbai was won by Adani Green Energy at a competitive tariff of INR 3.24/kWh ($0.045/kWh).
In addition, the government is also contemplating new initiatives like opening the private market for renewables, combining renewables with thermal power as a sales unit, and removal of ceiling tariffs from the federal tenders.
These initiatives, once implemented, can significantly alter market dynamics in the months to come.