Firms bid Rs2.44 per unit in India’s wind power auction

New Delhi: India’s wind power tariff firmed up to Rs2.44 per unit in an auction conducted by state-run Solar Energy Corp. of India (SECI) for 2 gigawatt (GW) of wind power contracts that ended on late Tuesday evening, said a person aware of the development.

Torrent Power, Goldman Sachs-backed ReNew Power Ventures Pvt. Ltd, Singapore-based power producer Sembcorp Industries Ltd’s Green Infra Wind Energy Ltd and Inox Wind Infrastructure Services Ltd bid Rs2.44 per kilowatt-hour (kWh) to win contracts for 499.80 megawatts (MW), 400 MW, 300 MW and 200 MW, respectively. Adani Green Energy (MP) Ltd, Saudi Arabia’s Alfanar and Betam Wind Energy Pvt Ltd also bid Rs2.45 per unit to win contracts for 250 MW, 300 MW and 50.2 MW, respectively.

“This was India’s largest wind capacity auctioned till date by SECI,” added the person cited above, on the condition of anonymity.

Wind power tariffs had plummeted to a record low Rs2.43 per kWh at an auction conducted by state-run Gujarat Urja Vikas Nigam Ltd in December last year, beating the record low solar tariff of Rs2.44 per unit registered in May.

Torrent Power, ReNew Power, Green Infra, Inox Wind, Adani Group, Alfanar and Betam Wind couldn’t be immediately contacted.

These contracts will help the country reach its ambitious clean energy target of 175 gigawatts by 2022, as part of India’s commitments to the United Nations Framework Convention on Climate Change in Paris in December 2015.

These aggressive bids come at a time when concerns have been expressed over some states looking to renege on their offtake commitments for projects awarded at a comparatively higher tariff.

This concern was flagged by the Economic Survey presented last month which stated that India’s quest for low clean energy tariffs “possibly contributed” to demands for renegotiation of the already signed power purchase agreements (PPAs). This, in turn, may result in legal battles and bring uncertainty for the sector, with banks becoming wary to lend to such projects, the Survey cautioned.

Tuesday tariffs are lower than the average rate of power generated by coal-fuelled projects of India’s largest power generation utility, NTPC Ltd, at Rs3.20 per unit. The price gap between electricity generated from thermal, solar and wind projects has been bridged. This is primarily due to costs of solar modules and wind turbine generators falling by 80% and 20%, respectively, over the past five years.

While solar power tariffs rose to Rs2.65 per kWh at an auction conducted by the Gujarat government in September, last December’s auctions conducted by SECI threw up winning bids of Rs2.47 and Rs2.48 per unit.

India has lined up an ambitious plan to award 23GW wind power contracts by March 2020. While 100GW of the government’s targeted renewable energy capacity is to come from solar projects by 2022, 60GW is expected to be generated from wind power plants.

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