Tender, Tariff, and Takers: 2024 A Brief Review

The renewable energy landscape is witnessing a transformative shift, with bidding processes increasingly favoring innovative solutions like Round the Clock (RTC) energy, Firm and Dispatchable Energy (FDRE), and wind-solar hybrid (WSH) tenders. Notably, energy storage has emerged as a game-changer, becoming an integral component of many new tenders.

According to an SBI Caps report, storage elements were included in one-third of the tenders issued in the first eight months of FY25, a significant leap from 23% in FY24 and a mere 5% in FY20. This rapid evolution highlights a growing commitment to ensuring energy reliability and flexibility while driving the renewable energy sector toward a more sustainable future. Thus, the sector diversified its energy sourcing from FDRE, Battery Energy Storage Systems (BESS), Solar and Wind-Solar Hybrid Tenders, and solar cells with solar module manufacturing tenders. This diversification acts as a keystone to adding more renewable energy projects at the lowest tariff rates and expanding renewable energy sources.

This year, India’s non-fossil fuel capacity reached 211.36 GW from 186.46 GW, the Ministry of New and Renewable Energy (MNRE)’s data found the addition of 14.9 GW of new renewable energy capacities (excluding hydro) in the current financial year (till November 2024) in the country. Additionally, the Renewable Energy Implementing Agencies (REIAs) responsible for allocating renewable energy tenders leaped forward by adding around 127 GW of renewable projects to the country’s tendering process.  

Here is a list of tenders that offer the lowest tariff rate. Among these tenders, some stand out for being introduced for the first time, others for offering low tariff rates.  

#1 Solar Plus Energy Storage Tender 

In 2024, SECI awarded its first Solar plus energy storage (ESS) tender. The tariff for this project was discovered at Rs. 3.41/kw for a 1.2 GW project. The lowest bid under BOO mode was awarded to Pace for 100 MW at Rs 3.41/unit. This tender stands out for beating the recent price discoveries from plain vanilla RE hybrid tenders. This tariff discovery is the lowest ever for a solar plus storage tender, especially with ESS sizing at least 0.5 or 600 MWh.

This was the first Solar + BESS tender under build-own and operate (BOO) mode which was successfully bid for.  Min annual CUF is 17% (10% to -15% range for 1st 10 yrs, thereafter 10% to -20% till 25th year).  ESS Discharge has been set at 2 hours in a day (one cycle), to be informed to the developer on a day ahead basis by DISCOM as per requirement. Part commissioning is allowed, offering a minimum 50 MW capacity.

#2 NTPC Subsidiary NVVN First BESS Tender With VGF 

NTPC subsidiary NVVN also released its first 500 MW/ 1000 MWh (2-cycle operation) BESS tender offering a bid of INR 2.37-2.38 lacs/MW/month. The lowest bids were offered to IndiGrid, Kintech Synergy, and HG Infra at a discovered tariff of INR 2.37-2.38 lacs/MW/month. The project offers a VGF to the developer of Rs. 73,00,000/MWh or 40% of the capital cost of the Project Capacity awarded whichever is lower.

#3 RTC Gave Way To FDRE 

This year saw a rise in the Firm and Dispatchable energy tenders, with RTC tenders entering the tendering process in 2019 taking with 400 MW project awarded to Reliance at Rs. 2.9/kWh. 

After a gap of a year with the last RTC IV tender released by SECI in June 2023, RTC IV tender made an entry again with 1.2 GW solar project released by SECI.  

#4 NTPC Delivered Its First Long-Duration Energy Storage Tender With Vanadium Flow Batteries

This year NTPC allocated one of the first Vanadium Redox Flow Battery (VRFB) battery energy storage (BESS) projects to Gurugram-based Delectrik Systems, a flow battery OEM, won a tender from NTPC for its NETRA division (NTPC Energy Technology Research Alliance) to deploy a 3 MWh Vanadium Redox Flow Battery (VRFB) based Battery Energy Storage System (BESS).

This tender stands out because it offers flow batteries in its tender which are, relatively low-cost capital investment products. The Flow Batteries are 10-20x lower compared to lithium-ion battery (Li-ion) batteries. The company Vishal Mittal Founder and Chief Executive Officer (CEO) of Delectrik explained “This is key as India looks to ramp up its BESS manufacturing capability to >100 GWh. For large installations, the per acre capacity can be increased to 200MWh. This represents <1% of the area required for PV installation of equivalent capacity. The low-cost, long-life, and sustainability of Flow Batteries makes them an ideal asset to be paired with renewables such as PV/Wind and achieve Round-The-Clock clean affordable energy and help the country reach its Net Zero emissions target,” he added.

#5 SECI’s Largest Solar + ESS tender

SECI’s 4 GWh BESS Tender Finds Takers At Rs 3.52/kWh

NTPC Renewable Energy, Sembcorp Green Infra, Solarcraft Power India 8 and Hero Solar Energy have all bid at Rs 3.52 to emerge winners from SECI’s largest Solar+Storage tender till date for 2 GW Solar plus 4 GWh BESS.

Impeding Issue

However, in pending issues falling PPA’s remain a cause of concern even though the Ministry of New and Renewable Energy (MNRE has rushed to claim  that renewable energy projects in the country are not failing to secure Power Purchase Agreements (PPAs). This followed reports that over 9 GW of allocated projects with SECI are yet to find buyers.

However, on the issue of unsigned PPAs, he credited it mainly to the rise in the bidding quantity of renewable power. Shripad Yesso Naik, the Minister for MNRE, said, “The quantum of unsigned PSAs / PPAs is primarily on account of a significant rise in the quantity of renewable power that has been bid out in the recent past. PSAs and PPAs are being signed and REIAs have signed PSAs of around 15 GW in respect of renewable energy procurement bids issued by REIAs in FY 2023-24,” he added. 

However, the Minister may have to revise his assertions, going by the rejection last week by CERC to adopt tariffs for SECI’s very first storage tender in fact, that was awarded to JSW Energy. Delays in signing of PPAs was a key cause for the tender landing in trouble in fact.