In an interview with Indian Infrastructure, R.P. Gupta, Chairman and Managing Director, Solar Energy Corporation of India (SECI), talked about the key achievements of SECI, its experience with innovative tenders and future targets. He also shared policy suggestions to further promote renewable energy uptake. Edited excerpts…
What have been SECI’s key achievements over the past year?
SECI has played an instrumental role in transforming the renewable energy sector and has acted as a key enabler in the country’s transition to clean energy by facilitating the development, expansion and implementation of renewable energy projects. In view of this, SECI was granted Navratna status on August 30, 2024, which will accelerate the company’s growth through improved agility, geographical presence and technology focus.
The key highlights of SECI’s physical and financial performance during 2023-24 are:
- Total awarded capacity: 8.44 GW (comprising 4.5 GW of solar, 2.1 GW of hybrid and 1.84 GW of wind power).
- Total commissioned capacity: 2.585 GW (1.377 GW solar and 1.208 GW wind capacity).
- Annual trading volume: Increased by 22.13 per cent over the previous year with 42,935 MUs of electricity being traded.
- Launch of firm and despatchable renewable energy (FDRE) tenders for Punjab, Madhya Pradesh, Haryana and Delhi.
- Total income: Increased by 20.91 per cent to Rs 131.358 billion compared to the previous year’s total income of Rs 108.6443 billion.
- Profit before tax: Increased by 37.97 per cent to Rs 5,844.5 million compared to Rs 4,236 million in the previous year.
- Net worth: Increased by 18.32 per cent over the previous year (the company’s net worth stood at Rs 28.1176 billion). Currently, there are 122.7 MW of operational renewable energy projects under SECI’s capex projects. The projects commissioned in 2023-24 are:
A 1.7 MW solar project in Lakshadweep with a 1.4 MWh battery energy storage system (BESS), aimed at decreasing diesel usage in the islands. The project was inaugurated by the prime minister in January 2024.
A 100 MW solar project in Chhattisgarh featuring a 40 MW/120 MWh BESS, intended to provide solar energy during peak evening demand periods. The project was inaugurated by the prime minister in February 2024. This is India’s largest solar-battery project, pioneering renewable energy innovation.
How has been the response to solar and wind tenders over the past year? What has been the trend in the tariffs discovered?
We have witnessed a healthy response to solar tenders over the past year, with some newcomers entering the sector. However, the vanilla wind tenders have received a relatively tepid response compared to the previous year. This is most likely due to a growing focus on hybrid and FDRE supply. Bidders appear to be saving the wind-resource-rich sites for such projects.
With respect to SECI’s tenders, solar tariffs have decreased from Rs 2.60 per unit (discovered in July 2023) to Rs 2.48 per unit (discovered in August 2024). Meanwhile, wind tariffs have witnessed a steep hike from Rs 3.18 per kWh (June 2023) to Rs 3.81 per kWh (October 2024).
“SECI will implement renewable energy projects of over 100 GW through the developer mode by 2030.
What has been SECI’s experience with round-the-clock (RTC), hybrid and storage tenders? What is the tender trajectory in this space?
I am pleased to state that the sector has responded quite enthusiastically to SECI’s innovations aimed at increasing the firmness and reliability of renewable energy in the energy mix. The first RTC tender was introduced in 2018-19. This concept has matured over the years, with an entire spectrum of FDRE projects. Assured peak supply through storage has become a favoured product by distribution companies (discoms).
The latest concept of solar combined with evening peak despatch has resulted in a highly competitive tariff of Rs 3.41 per unit, and we are hoping to discover even better tariffs in the future.
Hybrid and FDRE tenders have gained an increasingly higher share in the annual tenders issued by all four renewable energy implementing agencies. This bodes well for the sector, as it is the natural trajectory for the sector.
What other innovative tender frameworks can be expected in the near future?
The “demand-following” model has the potential to become a popular framework in the near future, as it provides the requisite level of flexibility and despatchability from renewable energy, as desired by discoms. The signing of a power sale agreement for the recently concluded auction for the FDRE IV tender will likely pave the way for more such procurements by discoms.
The other concept recently introduced by SECI is the supply of firm renewable energy solely during evening peak hours, using already operational solar connectivity. This concept is expected to offer 100 per cent renewable energy during peak hours at a relatively lower tariff than the current market price. This will also enable greater capacity utilisation of existing connectivity during non-solar hours. The connectivity regulations are expected to be modified to optimise transmission infrastructure. These tenders, leveraging storage systems effectively, will complement such changes.
What, according to you, are the key enablers for achieving India’s 2030 renewable energy targets? What further policy measures are needed to meet these goals?
Renewable purchase obligation (RPO) enforcement: To give a push to renewables, the government has set an RPO trajectory, which progressively increases to 43.33 per cent by 2030. This is aimed at driving renewable power uptake. Stricter compliance guidelines for discoms are expected to increase renewable energy uptake significantly.
Synchronised transmission infrastructure development: The main challenge lies in the time lag between the development of transmission infrastructure and renewable projects. Therefore, setting up robust transmission infrastructure is essential for the country to achieve its renewable energy targets.
Sustained market competition for economic tariffs: Sustained market competition for the expansion of renewable energy plays a critical role in driving innovation, reducing costs and accelerating the transition to cleaner energy sources. As the renewable energy sector continues to mature, competition will be a key driver of both environmental sustainability and economic growth.
Addressing grid integration issues: As the share of renewable energy increases, the grid must be upgraded to handle high levels of renewable energy integration. This includes investments in smart grids, decentralised generation and demand response systems to ensure reliable, affordable, electricity for all regions.
Investments for renewable energy: Significant investment is required for financing the renewable energy sector. Key investment areas include capital costs for technology and infrastructure, grid integration, and ongoing operational expenses to ensure the success and sustainability of renewable energy projects.
What are SECI’s future plans and targets?
The country’s Panchamrit targets include goals for the expansion of the sector to combat the climate change crisis effectively.
To give a push to renewables, the government has set an RPO trajectory, which progressively increases to 43.33 per cent by 2030. Further, the Ministry of New and Renewable Energy plans to achieve 1,800 GW of non-fossil capacity and a 77 per cent share of non-fossil fuel electricity generation by 2047. To further expand renewable power, SECI will implement renewable energy projects of over 100 GW through the developer mode by 2030.
In line with the government’s plans for indigenising the renewable energy supply chain, SECI has issued tenders for the production of green hydrogen and green ammonia, electrolyser manufacturing, solar components under PLI, etc. SECI is also planning to rapidly expand its capex footprint to 10 GW by 2030.
Going ahead, the share of renewable energy is expected to progressively increase in the grid. Many initiatives have been taken to improve grid integration of renewable energy and address grid-related challenges in the states. Therefore, going forward, RTC, FDRE and other such blended tenders will witness significant growth.
Further, there will be a greater contribution of renewable energy in non-electrical sectors such as green hydrogen, green ammonia and transport, which are crucial for achieving India’s net zero target by 2070. Another area of growth will be energy storage deployment for optimising transmission systems and ensuring the availability of renewable energy for longer durations. This option will be more viable in the coming years as the prices of storage components are gradually reducing.
SECI is planning to launch its IPO in the next couple of years and we are also eyeing the international markets, given the global push towards sustainability, decarbonisation and energy security.
“Going forward, RTC, FDRE and other such blended tenders will witness significant growth.”