The leading solar developer will set up 8 GW of large-scale solar capacity worth Rs.45,000 crore in India over a five year period.
Adani Green Energy Limited (AGEL) has won the world’s biggest ever solar energy tender of 8 GW (gigawatts). The leading solar developer will set up 8 GW of large-scale solar capacity worth Rs.45,000 crore in India over a five year period.
India has set a target of 100 GW of solar energy capacity to be installed under the Jawaharlal Nehru National Solar Mission (JNNSM). As of now, the installed solar energy capacity reached 37.627 GW as of March 31, 2020. India still has to install 60 GW capacity in two years to reach the set target of 100 GW. This seems bleak at the moment considering the global health crisis that has spiralled into an economic crisis. India hasn’t been spared from this economic crisis and therefore capacity addition has stalled due to manpower shortage and cash crunch across industries. However, tenders like the one recently won by Adani gives hope to this sunrise sector that has been given a boost by various supportive subsidy schemes established by the Indian government.
The Solar Energy Corporation in India (SECI), a central nodal agency that works with the government on policy changes and tender disbursals, has selected Adani (AGEL) in a tender that is focussed on boosting domestic manufacturing in the renewable sector. Adani Solar is the Adani Group’s solar photovoltaic (SPV) manufacturing branch. Adani Solar is slated to increase it’s domestic solar cell and module manufacturing production capacity by 2 GW as part of the new deal. This additional manufacturing capacity has been scheduled to be operational by 2022.
The power tariff for Adani’s 8 GW project is Rs.2.92 per kWh (kilowatt hour), which is significantly higher than the lowest tariff of Rs.2.44 won in few of the Indian solar auctions till date. While low tariffs are good for making renewables competitive with their fossil fuel counterparts, tariffs that are too low are unviable for power producers and developers and cause issues with growth in the overall energy marketplace.
The project for establishing an 8 GW SPV plant and domestic solar manufacturing capacity will require an investment of Rs.45,000 crore which Adani has committed to make. The entity is also in talks with Total of France to invest in the project.
This is the world’s largest tender of such a large capacity in a single bid.
Adani Green Energy has a goal of becoming the world’s largest renewable energy company by 2025. This project has increased AGEL’s portfolio of renewable assets to a whopping 15 GW.
This project will aid in reaching COP21 (Conference of Parties 21) target by displacing 900 million tonnes of carbon dioxide over the tenure of the project.
This domestic manufacturing link tender is exactly what is needed for the solar manufacturing sector in India to get its much needed boost. Safeguard duty on Chinese solar panels is an added impetus to kick-start domestic manufacturing of solar cells and modules. AGEL’s project of manufacturing, construction and operation of this newly won 8 GW SPV project is expected to create approximately 400,000 jobs. This makes renewables not only an eco-friendly investment that displaces carbon emissions, but also an economy boosting measure that creates jobs and other benefits.
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