ENGIE, NLC India, Rays Power Infra Secure Wins in SECI's Landmark 1.2 GW Solar-Plus-Storage (3.6 GWh) Auction

In a significant boost to India's renewable energy ambitions, the Solar Energy Corporation of India (SECI) has awarded contracts for 1,200 MW of solar power capacity integrated with 600 MW/3,600 MWh (3.6 GWh) of energy storage in its Tranche XXI auction. French energy giant ENGIE, state-owned NLC India Renewables, Rays Power Infra (through RPIL Power Three), and Oriana Power emerged as the key winners, underscoring the growing competitiveness of hybrid solar-storage projects in the country.

The auction, which concluded recently, saw aggressive bidding with tariffs dipping to as low as ₹3.12 per kWh (~$0.0346), reflecting the maturation of India's solar market and the declining costs of battery storage technology. NLC India Renewables clinched the largest share with 600 MW at ₹3.12/kWh, followed by ENGIE's Indian arm securing 200 MW at the same rate. Rays Power Infra bagged 300 MW, and Oriana Power took 100 MW, both at a slightly higher ₹3.13/kWh (~$0.0347). The projects, to be developed on a build-own-operate basis, will be connected to the Interstate Transmission System (ISTS) and must include co-located energy storage systems (ESS) with a minimum ratio of 0.5 MW/3 MWh per MW of solar capacity.

Launched in June 2025, the tender aimed to address the intermittency challenges of solar power by mandating storage that can deliver reliable energy during peak demand hours, typically from 6 PM to 9 AM the next day. Developers are required to ensure an annual capacity utilization factor (CUF) between 19% and 30%, with the ESS providing at least one hour of continuous discharge. Projects must be commissioned within 24 months (extendable by six months), and power purchase agreements (PPAs) will span 25 years. Notably, solar modules must comply with India's domestic content requirements and the Approved List of Models and Manufacturers (ALMM), promoting local manufacturing. Developers can source up to 5% of the energy from power exchanges or bilateral agreements, adding flexibility to operations.

This auction follows SECI's Tranche XX in October 2025, which allocated 2 GW of solar with 1 GW/4 GWh storage, indicating a ramp-up in hybrid tenders to support grid stability amid rising renewable penetration. The low tariffs—down from previous auctions where rates hovered around ₹3.50/kWh—highlight improved economies of scale, technological advancements in lithium-ion batteries, and fierce competition among bidders.

Deeper Analysis: Strategic Wins and Broader Implications

The results reveal a mix of public sector muscle, international expertise, and agile private players, signaling a diversified landscape in India's renewable sector. NLC India Renewables, a subsidiary of the government-owned Neyveli Lignite Corporation, solidifies its pivot from coal to clean energy with this massive 600 MW win. As a public sector undertaking (PSU), NLC benefits from access to low-cost financing and land resources, allowing it to undercut private competitors. This aligns with India's push for energy security, where PSUs like NLC are expected to lead in achieving the 500 GW non-fossil fuel capacity target by 2030.

ENGIE's 200 MW victory marks another milestone for the French multinational, which has been expanding aggressively in India. With a portfolio already exceeding 1 GW in solar and wind, this project enhances ENGIE's focus on hybrid solutions, leveraging its global experience in energy storage from markets like Europe and Australia. The win could attract more foreign direct investment (FDI) into India's renewables, which saw inflows of over $10 billion in 2025 alone, driven by policy stability and incentives like the Production Linked Incentive (PLI) scheme for batteries.

Rays Power Infra and Oriana Power, both Indian firms, demonstrate the rising prowess of domestic developers in high-stakes auctions. Rays' 300 MW allocation—secured via its subsidiary RPIL Power Three—builds on its track record in engineering, procurement, and construction (EPC) services, potentially positioning it for larger international ventures. Oriana's smaller 100 MW slice, awarded through a bucket-filling mechanism to optimize capacity allocation, shows how innovative bidding strategies can enable mid-sized players to compete against giants.

Economically, these low tariffs could translate to affordable power for discoms (distribution companies), reducing India's reliance on imported fossil fuels and curbing electricity costs for consumers. At ₹3.12-3.13/kWh, the rates are competitive with thermal power (often ₹4-5/kWh including externalities), making solar-storage a viable baseload alternative. However, challenges remain: high upfront costs for storage (estimated at ₹5-7 crore per MWh) and supply chain dependencies on imported batteries could strain project viability if global prices fluctuate.

Environmentally, the integrated storage will mitigate solar's variability, enabling round-the-clock (RTC) renewable supply and reducing curtailment losses, which plagued India's grid in 2025. This supports the country's net-zero by 2070 goal, potentially avoiding millions of tons of CO2 emissions annually. On the grid front, the 3.6 GWh storage capacity—equivalent to powering over 500,000 households for several hours—will enhance stability in high-demand regions like northern and western India, where blackouts remain a concern.

Yet, the auction's success raises questions about scalability. With India's battery manufacturing capacity still nascent (targeting 50 GWh by 2030 via PLI), developers may face delays in sourcing compliant tech. Moreover, the 24-month commissioning timeline is ambitious amid land acquisition hurdles and regulatory approvals. If met, this could accelerate the hybrid model's adoption, paving the way for SECI's future tranches and similar tenders from states like Rajasthan and Gujarat.

Overall, this auction exemplifies India's transition to a storage-led renewable future, blending cost efficiency with reliability. As global energy markets grapple with volatility, such initiatives position India as a leader in affordable clean power, potentially influencing emerging markets in Asia and Africa. Stakeholders will watch closely as these projects unfold, setting benchmarks for the next wave of green investments.

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