(Bloomberg) -- India will more than triple the capacity of auctions used to allocate renewable energy projects as the nation seeks more progress toward a 2030 clean power target.
A new federal government timeline outlines plans to strike agreements on installations of a total of 50 gigawatts of solar and wind projects during the year through March 2024. That compares with an average of 15 gigawatts auctioned annually in the last five fiscal years, according to BloombergNEF.
The nation is accelerating project installations to hit a goal to have 500 gigawatts of clean energy generation capacity in 2030, which will also include hydro and nuclear plants. Surging demand for electricity has underscored the need for new investment, though projects in India face challenges like high interest rates and competition from developed markets offering green subsidies.
Delivering more renewables projects will also require sufficient land to locate the installations and long-term buyers for electricity generated, said Rohit Gadre, a BNEF analyst. Those factors are “critical to the success of the plan, failing which the tenders will likely end up being under-subscribed,” Gadre said.
Read more: India Needs to Double Share of Clean Power to Meet Climate Goals
Rising energy demand is creating an incentive for some states to consider new long-term renewable power deals to supplement existing coal-fired capacity, while there’s also growing interest in contracts from the commercial and industrial sector.
According to the government’s calendar, India plans to auction 15 gigawatts of projects in each of the first two quarters of the fiscal year that began this month, with about 10 gigawatts offered in both of the subsequent quarters. State-run power companies Solar Energy Corp. of India Ltd., NTPC Ltd., NHPC Ltd. and SJVN Ltd. will be conducting the auctions for the government.
The schedule “will give developers visibility,” said Subrahmanyam Pulipaka, chief executive officer of the National Solar Energy Federation of India, an industry group. “There’s bound to be greater traction.”
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