Wind tariffs may fall further in next sale

Wind tariffs may fall further in next sale
05/10/2017 , by , in ALLIED

The wind energy industry is bracing for a further fall in tariffs as an auction of projects, which attracted record-low bids in February and prompted utilities to seek low rates from old plants, resume this week. The Solar Energy Corporation of India’s (SECI) second wind energy auction follows the recent order of the Central power regulator that auction winners should not be given priority in according connectivity, which may reduce competition.

There are 13 bidders for 1,000 MW of wind projects, which can be located anywhere in India. The first wind auction held in February, also for 1,000 MW, saw a winning bid of Rs 3.46 per kwH, substantially lower than the price discoms buying wind power had been paying till then. The newly-discovered tariff led to most of the state discoms refusing to sign any more power purchase agreements (PPAs) with wind energy developers at the old rates, including those that were in final stages of approval. S ince no new rates had been fixed by the states, the signing of fresh PPAs virtually stopped.

A number of wind energy states are preparing to hold auctions of their own but so far only Tamil Nadu has done so in late August, at which the lowest wind tariff fell further to Rs 3.42 per kwH. SECI has not set any reserve price for Wednesday’s auction. “But we expect lowest tariff to drop beyond Rs 3.42 per kwH,” said an MNRE official. Most developers, however, doubted the difference would be large.

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