Solar Energy Corporation of India Limited (SECI) has played a pivotal role in driving the uptake of renewable energy projects by proactively floating tenders. It has also adapted well to the changing times, transitioning from standalone solar and wind tenders to storage and hybrid tenders. Going forward, SECI plans to become an active player in the green hydrogen and pumped hydro storage space, and also venture into the commercial and industrial (C&I) segment. In an interview with Renewable Watch, R.P. Gupta, chairman and managing director, SECI, talks about the key achievements of SECI, its experience with innovative tenders and the targets for the future. Edited excerpts…
What have been SECI’s key achievements over the past one year?
Last year, in 2022-23, we awarded an aggregate capacity of around 3.3 GW, which consists of 1.7 GW of wind, 1.17 GW of hybrid and 500 MW of battery energy storage system capacity. In addition, we commissioned around 4.7 GW of projects, with 2.5 GW of solar, 1 GW of wind and 1.2 GW of hybrid capacity, which we had previously awarded. Our trading volumes in 2022-23 increased by about 60 per cent over the previous year. We sold 35,000 MUs of electricity to discoms. In addition, we came out with an innovative tender of 500 MW/1,000 MWh of standalone battery energy storage capacity. We also awarded over 39,000 MW of solar PV manufacturing capacity under the production-linked incentive (PLI) scheme of about Rs 130.37 billion.
Overall, we have awarded about 60 GW of renewable energy capacity, which roughly translates into Rs 2,700 billion of investment. Of this, around 20 GW has been commissioned. We are also preparing to venture into the hydrogen space, and have floated two tenders with a bid submission deadline of November 30, 2023. These are for about 450,000 metric tonnes of hydrogen production capacity and 1.5 GW of electrolyser manufacturing capacity. Furthermore, we are transitioning from standalone solar, wind and storage projects to hybrid, round-the-clock (RTC) and firm end despatchable renewable energy projects. Going forward, renewable energy will be supplied as per the demand of discoms. With this, we will try to bridge the gap between thermal and renewable energy projects.
What has been the recent experience with RTC and hybrid tenders?
Our experience in the RTC space has been quite positive and the tariffs discovered have been reasonable. In view of the environmental costs associated with thermal energy, the rates of renewable RTC energy are very reasonable. This is important to bridge the gap between thermal and renewable energy as gradually the protections and support to renewable energy are expected to be reduced as the sector matures.
The effort to bridge the gap between thermal and renewable energy also extends to despatchability. We are hoping that emerging storage technologies and solar thermal technology will be promoted further.
What are your views on the initial challenges faced by developers regarding tariff approvals and delays in signing of PSAs? What is the current status?
Out of the 60 GW for which SECI has conducted bids, PSAs have been signed for about 50 GW
capacity. As far as the remaining 10 GW is concerned, some of the capacity has been dropped for various reasons while efforts are being made to sell 5-6 GW of capacity.
Earlier, renewable energy projects operated under the feed-in-tariff regime. The sector then transitioned to competitive bidding and now it is progressively moving towards the higher value chain. At every stage, there will be different challenges. These include challenges associated with the products and their implementation, challenges faced by discoms and developers, and regulatory issues. SECI addresses these challenges proactively by coming up with innovative solutions.
What is your outlook on tariffs discovered for solar and wind projects?
Solar and wind tariffs depend on demand and supply trends, particularly solar module and turbine costs. As demand goes up, prices are likely to go up, and when supply goes up, prices tend to decline. It is a dynamic mix of various factors, particularly supply and demand. The other key factors include price fluctuations in China and domestic taxes. We need to ensure that tariffs do not go very high as this could pose problems for discoms. This further increases the gap between thermal and renewable energy costs. Thus, measures must be taken to address this.
Do you think India will be able to meet its 2030 renewable energy targets? What can the industry stakeholders do to help achieve the targets?
I believe that India will not only meet its targets but also surpass them. Fortunately, developers, solar PV manufacturers and other stakeholders are keen to contribute to India’s ambitious renewable energy targets. We will be able to meet the targets with their cooperation. We have previously achieved our Nationally Determined Contributions (NDCs) ahead of schedule and thus were able to set even more ambitious targets for 2030. The NDC targets are only up to 2030. We must look beyond this target because our ultimate aim is to achieve net-zero emissions by 2070. Overall, I am confident that India will be able to achieve its climate targets.
What should the government do to address the issues prevalent in the renewable energy sector?
The government has already done a lot in the renewable energy sector. It recently introduced the modified renewable purchase obligations (RPOs) with a significant change. Earlier, the state electricity regulatory commissions (SERCs) used to determine the targets, but now the RPOs will be determined by the centre. This is a positive step according to me as some of the SERCs were setting low targets. Now, there will be uniform targets for all states, and of course there will be a provision for them to purchase renewable energy certificates from other states that have achieved their targets and exceeded them. This will promote flexibility. These are the market instruments that need to be further promoted.
Going forward, tenders need to be floated as per the discom requirements to facilitate their gradual transition away from thermal energy. Moreover, now we have four renewable energy implementing agencies instead of just SECI. The government is also promoting hydrogen, pumped storage and other kinds of energy storage technologies.
What is your take on the domestic manufacturing environment for solar components in India?
India has already introduced two PLIs in this space. In fact, there are capacities coming up beyond PLI, with players confident that their products will be able to compete in the market without any financial support.
What are SECI’s plans and targets for the near future?
SECI has been introducing new products and will continue to do so. We are planning to introduce a new product next year that will be include solar thermal and storage. SECI looks forward to setting up its own renewable energy projects. It will set up pilot projects for technologies that are relatively new and have not yet gained market traction.
Apart from solar and battery storage tenders, SECI will also float tenders for pumped hydro storage projects and other new storage technologies to test their viability. This includes exploring the use of green hydrogen as a storage solution and using surplus energy to convert it into hydrogen. Moreover, we are planning to venture into the commercial and industrial segment and trading on the power exchanges.
In the C&I space, we do not aim to become a dominant player. Our main role will still be more of a developer and facilitator. We are committed to maintaining our role as a facilitator in the renewable energy market. Our other major activities of providing project management consultancy services to those interested in setting up their own projects would be strengthened further.
