India's ReNew Power signs baseload renewable power purchase agreement with SECI

India's ReNew Power has signed a 400-MW Power Purchase Agreement (PPA) for round-the-clock supply of green power to state-run Solar Energy Corporation of India (SECI), ReNew said in a statement Aug. 7.

Under a 25-year agreement, ReNew is to supply electricity in the first year at Indian Rupees 2.90/kWh (US$39/MWh). The price would increase by 3% annually for the first 15 years of the PPA, after which it would stabilize for the remaining 10 years.

The company, with a capacity of 10 GW of commissioned and under development projects, had won SECI's tender last year, it said.

The baseload contract would require 900 MW of wind and 400 MW of solar capacity, supplemented by battery storage capacity for a total project cost of around $1.2 billion, it said.

ReNew Chairman and CEO Sumant Sinha said the deal represented a "new era in renewables" with the project set to start feeding power in to the grid in the near term.

ReNew's current group of stockholders includes Goldman Sachs, CPP Investments, Abu Dhabi Investment Authority, GEF SACEF and JERA.

India's total renewables capacity including hydropower stands at 143.28 GW, or 37% of India's total installed capacity of 384.12 GW.

Both fossil fuels and renewable capacities are expected to rise substantially in the coming decade as power demand grows strongly.

Solar PV additions in India fell to 4.9 GW in 2020 as COVID-19 restrictions put a break on development. S&P Global Platts Analytics forecasts a conservative 7 GW installed in 2021, with annual additions increasing to 10 GW from 2022 onwards.

"After the record low tariff of $27/MWh for 500 MW projects in Gujarat in Jan. 2021, more recent solar auctions have seen PPA prices stabilizing around $30/MWh," it said in its most recent global solar market outlook. The premium in the ReNew contract reflected wind, storage and baseload components in the PPA.