The new bidding round, launched under the “firm and dispatchable renewable energy” model, calls for developers to set up solar generation assets paired with advanced battery energy storage systems (BESS). Projects awarded under this tender must deliver a predetermined quantum of renewable electricity during specified peak demand periods, addressing long-standing concerns about intermittent power supply from traditional wind and solar plants.
According to SECI’s official announcement, the tender is open to domestic and international players with a proven track record in large-scale solar and storage development. The projects can be located anywhere in India, with connectivity to the national grid, and require commercial operation within a designated timeline after signing of power purchase agreements (PPAs).
“India’s latest tender signals a decisive shift toward firm, dispatchable green power, addressing not only the challenge of intermittency but also boosting investor confidence,” said Dr. Vibhuti Garg, South Asia Director at the Institute for Energy Economics and Financial Analysis (IEEFA), in an interview with The Economic Times.
Boosting Grid Reliability and Energy Security
The rapid adoption of renewable energy in India—now exceeding 125 GW of operational solar, wind, and hydro assets—has highlighted significant integration challenges. Resources such as solar and wind only generate electricity intermittently, causing volatility in the grid and requiring fossil fuel-based backup power.
SECI’s new 2 GW bid round emphasizes hybridization and storage to overcome these hurdles. By mandating BESS integration, the projects will provide continuous, dispatchable electricity during both peak and off-peak hours, ensuring grid stability as India targets 500 GW of non-fossil capacity by 2030. The approach closely aligns with global best practices in the US, Europe, and China, where hybrid projects are now a mainstay in new clean energy additions.
National Climate Goals and Industry Response
India is under increasing pressure to decarbonize its power sector and reduce dependence on coal, which currently accounts for more than 70% of electricity supply. The government’s National Solar Mission, along with financial incentives and policy support from the Ministry of New and Renewable Energy (MNRE), has positioned large-scale tenders like this as crucial levers in achieving national NDCs (Nationally Determined Contributions) under the Paris Agreement.
Industry analysts note that this 2 GW solar-storage tender follows a recent uptick in BESS-focused projects. SECI’s success with past hybrid tenders—including the landmark 1.2 GW round in 2023—has drawn enthusiastic participation from domestic conglomerates, global developers, and specialized storage technology firms.
“The scale and structure of SECI’s new round will likely attract tier-1 players and create benchmark pricing for integrated renewables and storage,” remarked Sujoy Ghosh, Vice President (India & South Asia) at First Solar, during a panel at REI Expo 2024.
Economic and Technical Considerations
Expectations and Requirements
SECI’s bid documents stipulate stringent technical criteria, including minimum guaranteed dispatch during peak periods and robust BESS safety standards. Winning bidders will enter long-term PPAs with SECI, offering predictable revenues as a counterweight to the higher upfront costs of incorporating battery storage.
Cost Implications
While storage costs remain a key challenge—lithium-ion BESS prices globally have fluctuated between $120 and $200/kWh—recent government incentives and maturing supply chains may help keep tariffs competitive. Experts believe that India’s aggressive market size, coupled with domestic manufacturing initiatives like the PLI (Production Linked Incentive) for batteries, will provide further cost reduction opportunities.
Next Steps and Upcoming Deadlines
Bidders have until late July 2024 to submit proposals, with SECI expected to close technical evaluation and award contracts by mid-September. Industry observers anticipate robust participation from leading Indian utilities (NTPC, Tata Power, Adani Green), global IPPs (Brookfield, Enel), and battery specialists, following the successful financial closure of several solar-storage projects earlier this year.
SECI’s latest initiative reinforces India’s commitment to accelerating energy transition while creating new opportunities for innovation, employment, and climate action.
