Wind power auction sees one-year high tariff

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New Delhi | Published: February 16, 2019 6:10:00 AM

The sixth round of wind power auction by the state-run Solar Energy Corporation of India (SECI) that concluded on Thursday discovered a tariff of Rs 2.82/unit, the highest since February last year when the price bottomed out at Rs 2.44/unit.

wind power, wind power auction, centreAs of now, only 604.7 MW out of the 1,050 MW auctioned in February, 2017 — which was the maiden bidding hosted by central government — have been operationalised.

The sixth round of wind power auction by the state-run Solar Energy Corporation of India (SECI) that concluded on Thursday discovered a tariff of Rs 2.82/unit, the highest since February last year when the price bottomed out at Rs 2.44/unit. The results of the latest round of bidding have raised the fear that the “high tariffs”, which the state-run discoms could object to, might force the government to cancel the bids.

A similar rise in solar tariffs had resulted in auction process being put in abeyance. While solar tariffs reached the lowest level of `2.44/unit in 2017, it has since gone up to `2.71 in July 2018, leading to cancellation of the bids.

According to sources, of the 1,200 MW of wind power that went under the hammer, Adani Green, Ostro Energy (which was recently acquired by ReNew Power), Srijan Energy and Powerica have been allotted 250 MW, 300 MW, 150 MW and 50.6 MW respectively, for quoting the lowest price of `2.82/unit. SoftBank Group’s SB Energy has been awarded 325 MW against its bid of `2.83/unit, marking the Masayoshi Son-led firm’s foray into the country’s wind sector.

Hyderabad-based Ecoren Energy, which also quoted `2.83/unit has been allotted 125 MW.

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An industry official said that one of the possible reasons why prices are going up is because the favourable locations for setting up wind plants have already been taken up and there is a lack of clarity on the land availability. The industry is also jittery about the tariffs going up, given the precedents of bids getting cancelled in the solar sector due to higher prices. SECI had cancelled 2,400 MW bids from the 3,000 MW solar auction which was held on July 13, where tariffs ranged between Rs 2.44/unit and Rs 2.71/unit.

“The government’s reaction to such tariffs would be crucial,” said a senior official from one of the winning firms.

Issues such as land availability and lack of transmission infrastructure has recently slowed down the capacity addition of wind power units with only 600 MW getting installed in the first six months of FY19. The capacity of wind power projects offered in the fifth and sixth tranches of competitive bidding were slashed to 1,200 MW from the original proposal of 2,500 MW, after SECI cancelled 2,000 MW wind tenders on tepid industry response.

As of now, only 604.7 MW out of the 1,050 MW auctioned in February, 2017 — which was the maiden bidding hosted by central government — have been operationalised. To promote inter-state sale of renewable power, the government has waived the inter-state transmission charges and losses for wind and solar projects to be commissioned by March, 2022.

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