Deals in renewables sector decline amid waning investor interest

MUMBAI : The renewable energy sector has seen a steep fall in interest from both developers and long-term investors. While the number of acquisitions of operating renewable energy power plants has dropped, bidding for new government projects have halved this year from the same period last year. Developers blame the slowdown on uncertainty over power purchase agreements (PPAs) being honoured and a lack of financing for the sector.

The Solar Energy Corporation of India (Seci), the arm of the ministry of new and renewable energy that conducts auctions for greenfield renewable power projects, saw its last two reverse auctions go undersubscribed. Before this, Seci cancelled auctions of 2.4 gigawatt (GW) of its 3.3GW interstate transmission system-connected solar auctions. For the first half of this year, data from market researcher Bridge to India shows that even in auctions that were concluded, the subscription multiple has halved from 2.24 in 2018 to 1.09 in 2019.