India added about 715 mega watt (MW) of utility scale solar capacity in January-March 2020, down 67 per cent from 2163 MW during the same period last year, a report said.
According to clean energy consultancy Bridge To India, the country added 328 MW of utility scale wind capacity in the quarter ended March, which was down 65 per cent as compared to 944 MW in January-March 2019.
"India added total utility scale solar and wind capacity of 715 MW and 328 MW, respectively in the quarter ended March. For financial year 2019-20, total utility scale capacity addition was 7,408 MW, 34 per cent below the high of two years ago," the firm said in a report.
It further said the progress in second and third quarter would continue to be affected by coronavirus disruptions.
Although, project construction activities were allowed to commence from April 20, 2020, a further 2-3 months are expected to be lost in remobilisation effort and resolving shipment blockages.
There may be further hold-ups depending on government approvals, or reopening of power purchase agreements (PPAs) in case of open access projects.
Bridge To India also said that "faced with sharp demand slowdown and deteriorating financial condition, discoms are reluctant to sign long-term PPAs and commit to long-term purchases, the government may also have to struggle to find buyers for the recently completed auctions."
There are 37 gigawatt (GW) of solar and wind projects in the pipeline for auction, excluding 3 GW capacity in the manufacturing-linked tender, the remaining 34 GW is due for completion in the next two years.
The firm said it expects only 24 GW to be added in this period in view of the various operational and financing challenges.
There are multiple reasons for slowdown which include slumping power demand outlook, offtake concerns, challenges in tying up land and transmission connectivity, debt financing and depreciation of the rupee , and there is an urgent requirement of a revised road map in view of these challenges.
The government has been proactively dealing with coronavirus-related concerns of the renewable sector. But the underlying prospects are being seriously impacted by surplus power capacity on one hand, and various financial and operational challenges on the other hand.
"We believe that the government should be focusing on fundamental sector reform and easing supply side constraints instead of rushing out new tenders and auctions," Vinay Rustagi, Managing Director of Bridge To India, said.
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