“In the wind energy space, grid connectivity-related concerns have forced bidders to skip auctions in the past. Last financial year was a year of under-performance for wind power projects,” the agency said.
Analysts consider unpredictability of wind resource as a major risk for wind powerprojects. Companies are managing that risk by portfolio diversification and maintenance of adequate debt coverage and liquidity.
A major positive for wind power projects is the stabilising grid availability. Tamil Nadudemonstrated a substantial improvement in grid availability between 2015-16 and 2017-18.
“Achieving financial closure for new renewable projects with highly competitive tariffs and refinancing of existing loans may be a challenge without sponsor backing, on account of the low margin for error,” In-Ra said.
It also noted that mergers and acquisitions activity in the renewable energy sector have been sluggish in the past 12 months, with major players counting on enough capacity available to bid for new projects.
The solar auction target for financial year 2018-19 might get missed on account of frequent changes in the implementation of safeguard duty, apprehensions about grid connectivity and land acquisition-related bottlenecks. Also, a depreciating rupee compared to the US dollar poses a threat to economical solar tariffs.
ET Energy World