Tamil Nadu, India issues 500 MW wind energy

Tamil Nadu, India issues 500 MW wind energy
12/07/2017 , by , in ALLIED

The massive response to the country’s first-ever wind energy auction has prompted Indian states to switch from feed-in tariff mechanisms to competitive auctions.

After Gujarat, now Tamil Nadu has also issued a tender to auction 500 megawatts of wind energy capacity. This marks a major shift in India’s wind energy market, which is also the largest contributor to its renewable energy capacity with a share of 56%. Tamil Nadu leads all states in terms of installed wind energy capacity.

Tamil Nadu aims to allocate 500 megawatts of wind energy capacity in order to secure enough electricity to meet its renewable purchase obligation, wherein all power utilities are required to source a set minimum percentage of electricity from renewable energy projects. At the national level, India targets a share of renewable energy at 15% of total electricity consumption by March 2022.

The maximum bid that can be submitted by a project developer for the tender is Rs 3.46/kWh (5.4¢/kWh), the tariff discovered in the first-ever wind energy auction in India. The auction was organized by the Solar Energy Corporation of India earlier this year.

The tender was oversubscribed with a total of 13 developers submitting bids equivalent to 2.6 gigawatts, in comparison to 1 gigawatts bids called for. Bids were received from major energy giants including Adani Power, Hero Future Energies, Renew Power, and Inox Wind. Most of the developers, i.e. 69%, bid to set up projects in the state of Tamil Nadu.

Mytrah Energy, Green Infra, Inox Wind, Ostro Energy, and Adani Group were the successful bidders grabbing a total of 1,050 megawatts of capacity at a tariff of Rs 3.46/kWh.

The auction route would be highly beneficial to the power utility of Tamil Nadu. Like several other utilities in India Tamil Nadu Generation and Distribution Company (TANGEDCO) regularly faces financial issues and delays payments to project developers.

With the benchmark set at Rs 3.46/kWh (5.4¢/kWh), TANGEDCO will get at least a 16.8% discount over the prevailing feed-in tariff in the state.

Already, Karnataka, Andhra Pradesh, and Gujarat have directed their power utilities not to sign power purchase agreements with wind energy project developers at feed-in tariffs. Gujarat recently floated a tender to acquire 500 megawatts of wind energy.

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