NEW DELHI: India’s ambitious green energy programme took a giant leap as the country’s first wind energy auction has seen tariff dropping dramatically to Rs 3.46 per unit, mirroring the steep fall in the solar power sector and giving coal-fired plants another emission-free and competitive rival to worry about.
Solar tariffs have already fallen to Rs 2.97 per unit after a series of auctions in recent years in which companies that quoted the lowest tariff were awarded projects.
“These are exciting times, cleaner times. Our intention is to provide affordable 24X7 power, yet protect the environment and leave behind a brighter and cleaner future for the next generation,” Piyush Goyal, the minister for power, coal, renewable energy and mines, told ET.
The auction, conducted by Solar Energy Corporation of India, invited bids for 1,000 megawatts of wind projects that could be set up anywhere in the country. The winners are Mytrah Energy (India) Pvt Ltd, Green Infra Wind Energy Ltd, Inox Wind Infrastructure Services Ltd and Ostro Kutch Wind Pvt Ltd, all of whom quoted the identical tariff of Rs 3.46 per kwH and have been awarded 250 MW each.
Adani Green Energy (MP) Ltd also quoted the same tariff. An additional project of 250 MW is likely to be awarded to it, even though the original auction was for only 1000 MW. There were 10 bidders in all. The rest quoted higher tariffs.
So far, wind tariffs were set by regulators of the nine states producing wind power, unlike solar projects which for some years have been auctioned and awarded to companies quoting the lowest tariff.
Wind energy tariffs have varied from a high of Rs 6.04 per unit in parts of Rajasthan to Rs 4.08 for some projects in Maharashtra. Most have varied from Rs 4 to Rs 5 a unit. Other states where wind energy is generated are Tamil Nadu, Gujarat, Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Odisha.
The idea of holding wind power auctions had been mooted by the Ministry of New and Renewable Energy (MNRE) nearly a year ago, though three earlier attempts to hold them — once by Karnataka and twice by Rajasthan — had proved unsuccessful, with various legal issues raised by wind power associations holding them up. In October last year, however, the government issued a formal notice to auction 1000 MW of wind power projects. The last dates for submission of bids and their opening were twice deferred, until they were finally opened on Thursday.
Earlier this month, solar tariffs dropped to an all-time low of Rs 2.97 per kwH during the bidding to set up segments of a 750 MW solar project in Rewa, Madhya Pradesh, which is likely to be the largest solar plant in the world. The lowest solar bid till then had been Rs 4 per kwH.
Minister Goyal tweeted: “After solar cost reduction below Rs 3 per unit, wind power cost down to Rs 3.46 per unit through transparent auction. A green future awaits India.”
The fall in wind tariff is in some ways more significant than its solar counterpart. “There is some degree of government support in the (750 MW) MP solar project,” said Ashwini Kumar, managing director of SECI. “But for these just-auctioned wind projects, there is none.”
To encourage investment in renewable energy, the government has a scheme of providing viability gap funding (VGF) for renewable energy developers. But in the current wind auction, none of the winning developers have sought VGF.
Most of the new projects are expected to come up in Tamil Nadu and Gujarat. As of December 2016, India had installed wind power capacity of 28,700.44 MW.