Uncertainty in power purchase deals to hit wind energy projects

Uncertainty in power purchase deals to hit wind energy projects
28/08/2017 , by , in ALLIED

India’s wind energy programme may get choked for 2 years and the momentum to shift to renewable resources will be severely hit as the distribution companies have practically stopped signing fresh power purchase agreements, reported a leading business daily quoting the central government.

India added 5,400 MW of wind capacity, in 2016-17, exceeding the target of 4,000 MW. In the previous year, it added 3,423 MW, which was a record then.

In the current financial year, only 228.40 MW has been added till end-June because many states and regulators are reluctant to sign power purchase agreement (PPA) for projects agreed upon when tariffs and costs were higher.

There are 3,000 MW of wind projects in various stages of construction and the country has the potential to expand wind energy generation substantially. The Ministry of New and Renewable Energy (MNRE) has cautioned principal secretaries (power) of the seven main wind energy producing states that if PPAs are not signed, there would be no further wind capacity addition either in 2017-18 or 2018-19.

States have been reluctant to sign PPAs since the only wind auction in the country held in February by Solar Energy Corporation of India (SECI), an arm of the MNRE. The winning tariff at the auction was Rs 3.46 per unit, lower than the Rs 4-6 per unit that discoms had been paying wind developers until then.

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