Talk of ‘world record’ as India’s Adani bags 8GW, US$6bn solar contract

Facebook
Twitter
LinkedIn
Reddit
Email
It is understood that the 8GW solar fleet will span Rajasthan locations such as Jodphur and the Gujarat district of Kutch. Image credit: Nomad Bikers / Unsplash

India’s COVID-hit solar industry has entered the global spotlight this week, with a top sector player securing what is being described as the largest solar contract ever seen in the world’s history.

Earlier today, Adani Green Energy Ltd announced it has been chosen by the Solar Energy Corporation of India (SECI) to deploy 8GW of solar nationwide by 2025, a fleet backed by a 25-year power PPA that supposedly represents the “world’s largest solar award”.

Adani’s tender win will see it invest 45,000 Indian crores (US$6 billion) all in all. In line with the auction’s domestic manufacturing rules, the firm will finance the setup of a 2GW solar cell and module production line, with plans for the factories to be up and running by 2022.

In return for its pledge to invest in solar manufacturing, Adani will enjoy higher PPA tariffs than it otherwise would have. The firm will earn INR2.92 per kWh supplied (US$0.038/kWh), where a bid without the manufacturing element would have yielded a tariff of INR2.6/kWh (US$0.034/kWh).

In a statement to investors, Adani explained the plan is to bring the first 2GW of the 8GW solar fleet online by 2022, followed by annual 2GW add-ons in 2023, 2024 and 2025. One of the 2GW batches will be a single-site project and one of the largest such ventures worldwide, the firm claimed.

The renewable group did not specify where the 8GW of solar will be built, but Times of India reported that the sites are expected to include locations in the desert state of Rajasthan – Jaisalmer, Bikaner, Jodhpur, Jalore and Barmer – and the Gujarat district of Kutch.

Bright turn of events for COVID-hit Indian solar

Adani Green Energy’s solar announcement was greeted by a rallying of its shares on Mumbai’s BSE market, with the value of company stock rising by 5% to INR 312.75 (US$4.13) on Tuesday.

The group’s 8GW win brings a major boost to its target to amass an installed renewable portfolio of 25GW by 2025. Having now reached the 15GW mark, the firm is expecting to invest 112,000 Indian crore (around US$15 billion) overall to meet the 2025 target.

The news adds a bright spot to an otherwise bleak start of 2020 for Indian solar, pummeled by the COVID-19 crisis. With 267,249 infections and 7,478 deaths nationwide reported so far, the pandemic has stifled the flows of solar imports, putting a 3GW fleet at risk of construction delays.

Since late March, the country has acted to shelter renewables from the disruption, enshrining the sector as essential and granting deadline reprieves. It has also revived its push for a domestic solar manufacturing ecosystem, in a bid to minimise the reliance on Chinese imports.

The flurry of support measures has not prevented a slowdown of solar construction. Last week, analysis by consultancy Bridge to India revealed that just under 1GW was installed in Q1 2020, with deployment set to further tank to 500MW in Q2 2020.

A recent report by think tank IEEFA urged Indian solar players to keep an eye on costs as well as COVID-19. According to the study, the recent squeezing of tender tariffs has pushed investment returns down to a level – 12-13% – that leaves firms “very little margin for error”.

Read Next

September 23, 2022
India’s government has approved the second round of the production-linked incentive (PLI) scheme to incentivise domestic solar PV module manufacturing.
September 22, 2022
Tech major Amazon has expanded its renewables portfolio globally with 71 new projects with a total capacity of 2.7GW.
September 20, 2022
Private equity firm KKR and Hero Group have invested US$450 million in Indian independent power producer (IPP) Hero Future Energies (HFE) to support its renewables expansion.
September 14, 2022
Tata Power Solar Systems has received a “letter of award” of INR5.96 billion (US$75 million) from NHDC to set up a 125MWp floating PV project in India.
September 13, 2022
India-based Serentica Renewables has launched a renewables platform in India with plans to install 1.5GW of solar and wind power.
September 12, 2022
Renewables developer Amp Energy India has formed a joint venture (JV) with Websol Energy Systems Ltd. for manufacturing up to 1.2GW of monocrystalline PERC solar cells and modules in the north-western Indian state of West Bengal.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 27, 2022
15:30 AEST (UTC +10)
Solar Media Events
October 4, 2022
New York, USA
On-Demand Webinars, Solar Media Events
October 11, 2022
Virtual event
Upcoming Webinars
October 18, 2022
10am (EDT) / 4pm (CEST)