Wind auctions destroying the industry

Wind auctions destroying the industry
06/12/2017 , by , in ALLIED

Small scale manufacturers of components for wind turbines are being squeezed by the relentless fall of wind energy tariffs in successive auctions, according to the petition filed by the Indian Wind Energy Association (Inwea) in the Supreme Court, whose admissibility will be decided on Monday.

The petition, opposing the 500 MW wind energy auction Gujarat’s power utility Gujarat Urja Vikas Nigam Ltd (GUVNL) wants to hold, harps mainly on technicalities, maintaining that the auction is contrary to law because the Centre has not yet issued guidelines on the conducting of such auctions, as required by Section 62 of the Electricity Act, 2003, and Section 6.4(2) of the National Tariff Policy, 2016. Another industry body, the Indian Wind Power Association (IWPA), has also made an intervention in the matter, supporting Inwea’s petition with similar arguments.

But Inwea’s also draws attention to the plight of the segment due to the fall in wind tariffs. “Competitive bidding …could squeeze the developers of wind generators to put more pressure on the original equipment manufacturers (OEMs) …and in the absence of lowering of costs… developers would be forced to import the said equipment…thereby frustrating the Make in India policy,” it said. “It will lead to sustainability issues for the small scale sector …and would also affect scores of jobs ..

Wind energy tariffs, formerly fixed solely by the power regulators of the wind energy producing states, had varied between Rs 4 and 6 at the beginning of this year. The first 1000 MW wind auction, conducted by Solar Energy Corporation of India (SECI) in February, brought the winning tariff down to Rs 3.46 per unit, while the second, in October, lowered it further to Rs 2.64 per unit.

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