India’s authorities will cease the digital reverse auctions of renewables initiatives within the nation amid fears it’s resulting in “unhealthy competitors”.
Reported final week (14 July) by The Financial Instances India, the transfer has been described as essential to reverse the pattern of artificially low tariffs resulting in unhealthy competitors.
Secretary of the Ministry of New and Renewable Power (MNRE), Indu Shekhar Chaturvedi, mentioned on Thursday that the choice had been made “in-principle”.
“An in-principle determination has been taken. There have been complaints from the trade that e-reverse auctions is resulting in the tariffs being artificially lowered resulting in unhealthy competitors,” he mentioned.
Initially targeted on wind energy, the choice to revert again to the traditional single bidding route is more likely to filter all the way down to different renewable applied sciences. The Financial Instances India cites a senior government on the MNRE as saying, “If the e-reverse public sale for wind is being taken down on transparency considerations, how can it’s sustained for different renewable vitality initiatives.”
Some, nonetheless, have questioned the knowledge behind the transfer, describing it as “the improper answer to the improper drawback”.
Vinay Rustagi, managing director of analysis agency Bridge to India, advised PV Tech that “to say that every one issues with unviable initiatives are all the way down to e-auctions is a gross misstatement”.
“Auctions have been a double-edged sword – they allowed bidders to go in at cheap ranges within the first stage after which play it relying on scenario within the dwell motion room,” Rustagi mentioned. “Now with just one shot at success and no entry to bidding information from the earlier spherical, builders will probably be bidding fully blind.”
Consequently, Rustagi believes aggressive bidding will proceed as “determined bidders will bid much more aggressively”.
“The actual drawback is threefold,” he prompt, “low demand, oversupply of capital and lack of self-discipline amongst builders, which is making bidders determined to win initiatives.”
We noticed a number of situations even with auctions the place folks went too aggressively in first spherical when there was little competitors.”
In the meantime, the Indian photo voltaic sector is affected by module shortages because the nation’s fundamental customs obligation on photo voltaic cells and modules have constricted provide. However the MNRE current mentioned there was no plans to vary this coverage.
That mentioned, Fitch Resolution forecasts that India will greater than double its photo voltaic capability within the subsequent decade, increasing from 49.3GW as of year-end 2021 to 139.5GW by 2031.