India’s government postponed its flagship event for global renewable energy investors in a move local commentators said reflects the mounting issues confronting one of the world’s most ambitious wind and solar programmes.
The country’s Ministry for New and Renewable Energy (MNRE) had spent months heavily promoting the Re-Invest conference and exhibition, scheduled to be held in New Delhi at the end of October and set to be opened by Prime Minister Narendra Modi and power minister RK Singh.
But on Friday a brief government statement said the event had been postponed by a year to October 2020 “due to certain unavoidable circumstances”, without giving further details. Re-Invest was supposed to help India attract multi-billion-dollar levels of investment in renewables and “present India’s renewable energy story to the world”.
The statement came days after Singh told reporters in India that retroactive changes to already-signed power purchase agreements planned by the key renewable state of Andhra Pradesh is already affecting international investment plans.
“What has transpired is exactly what I feared,” Singh told India’s Economic Times. India’s central government has strongly opposed Andhra Pradesh’s plans to enact the changes to PPAs since they were announced in July, with Singh warning of the chilling effect on the huge investment needed to reach its targets of 100GW of solar and 60GW of wind by 2022.
By mid-2019 the government said 29.6GW of PV and 36.4GW of wind was in place, but insists it is on course to meet the goals and press on to a new 500GW ambition for 2030.
However, the confidence blow of the Andhra Pradesh government’s raid on PPAs – which is currently the subject of court action – is one of a lengthening list of challenges facing India as it races to complete the build-out. Others include tariff caps, land availability issues, grid problems, distressed state power distributors and access to finance.
The most obvious symptom of the malaise has been the regular under-subscription of the large-scale wind and solar tenders run by the central government in an effort to spur development towards the target.
The most recent tenders for 1.8GW of wind and 1.2GW of solar received bids totalling just 550MW and 600MW respectively.
Respected Indian specialist analyst Bridge to India said in a note issued just before the cancellation of Re-Invest that “the renewable energy bull run is over”, with investor interest in the sector “falling sharply in the last 12 months”.
“In the wake of increasing costs and execution risks, difficulties in getting debt financing and delinquent [distribution companies], the developers are finally saying no to new tenders”.