New Delhi: Wind power tariffs followed the solar route and fell below Rs4 per kilowatt hour (kWh), in a 1 gigawatt (GW) tender by state-run Solar Energy Corp. of India (SECI).
The lowest bid was at Rs3.70 per unit as of press time on Thursday, when the sale process was still under way.
Wind energy firms were quoting these prices to win contracts for the tender that had received 2.6 times the grid-linked capacity being sold. Tariffs have hitherto ranged from Rs3.9 per kWh to Rs5.9 per kWh.
The sector has been hit by inordinate delays in signing of power purchase agreements and untimely payments; distribution firms have shied away from procuring electricity generated by wind projects.
After the financial bids were opened, a reverse bid auction process is being run to select the developers. The firms participating are: ReGen Powertech Pvt. Ltd, Mytrah Energy (India) Ltd, India’s first Formula 1 driver Narain Karthikeyan’s family-promoted Leap Green Energy Pvt. Ltd, Singapore-based Sembcorp Industries Ltd, Gamesa Renewable Pvt. Ltd, ReNew Power Ventures Pvt. Ltd, Hero Future Energies Ltd, Inox Wind Ltd, RP-Sanjiv Goenka’s Group CESC Ltd, and Adani Green Energy Ltd.
“This auction will be disruptive for the wind industry. It will be interesting to see how banks, original equipment manufacturers and developers work together to commission these projects—at the current quoted tariffs, these projects will need to be delivered at substantially lower project costs to ensure viability,” said Srishti Ahuja, director at consulting firm EY.
“Today, if you see, pan-India wind power tariff is between Rs 4-5 per unit... So these are a significant improvement from current prices,” added Vinay Rustagi, managing director at consulting firm Bridge to India. “These are going to be first wind power projects connected to national grid and would sell anywhere in India. So this significantly reduces the cost of renewable power.”
The government aims to hit 175GW of renewable energy capacity by 2022 as part of its commitments to the Paris climate change deal. This includes 60GW from wind power.
The price gap between electricity generated from thermal, solar and wind projects has been narrowing as costs of solar modules and wind turbine generators fell 80% and 20%, respectively, over the past five years.