business

Updated: Feb 24, 2017 12:08 IST

After a sharp drop in solar tariff to Rs 2.97 per unit, wind power tariff also dropped to a record low of Rs 3.46 per unit in an auction of 1,000 MW capacity conducted by Solar Energy Corporation of India (SECI).

“Mytrah Energy, Green Infra Wind Energy, Inox Wind Infrastructure Services, Ostro Kutch Wind and Adani Green Energy have emerged as lowest bidders. All these five firms have quoted Rs 3.46 per unit rate for the 1,000 MW capacities on block,” a source said.

“After solar cost reduction below Rs 3/unit, wind power cost down to Rs 3.46/ unit through transparent auction. A green future awaits India,” Piyush Goyal, minister of power, coal and renewable energy tweeted.

The power from these 1,000 MW capacity will be supplied to states which do not have adequate wind resources.

SECI is the nodal agency for implementation of this scheme and is working on the e-bidding process followed by e-reverse auction for eligible bidders. Experts say that by the time the final winner is chosen from this bidding process, the tariff could be lower than Rs 3.46 per unit of wind energy.

To put this tariff in perspective, the lowest coal-based power tariff that India has seen in recent times was Rs 1.19 for Sasan ultra mega power project. The 4000 MW Sasan project was won by Anil Ambani owned Reliance Power in 2007. The project however has seen two tariff revisions in the last 10 years.

Later last year, SECI had floated this tenders for total wind power capacity of 1,000 MW. SECI will tie up long-term power purchase agreements of project developers with states to whom power will be supplied through the central transmission utility.

Under the scheme, the government will not acquire land or equipment as developers will have to do that on their own. They will also run and maintain their plants.

“While solar in cheaper than wind energy, the advantage of wind is that the equipment for generating it is entirely made in India. To produce solar power, Indian companies still have to depend on Chinese imports for panels etc.,” said Soma Banerjee, principal, energy and infrastructure at CII.

The wind power deployment in the country started in early 1990s. The current wind power installed capacity is nearly 28.08 gigawatt, accounting for around 9% of the total installed capacity of 310 gigawatt. Globally, India is at the fourth position after China, the US and Germany, in terms of wind capacity installation.

The auction assumes significance because India has set an ambitious target of having 60 gigawatt of wind power capacity by 2022.

India’s renewable energy commitments have seen global investors, energy majors and pension funds make a beeline for the country. But experts and bankers have time and again warned against the aggressive bidding that the sector has been witnessing.

The tariffs quoted by bidders in reverse auctions are “very aggressive and the viability of such competitively bid tariffs hinges on keeping the cost of modules and financing costs within budgeted levels,” ratings firm ICRA Ltd wrote in a report in April 2016.

(With inputs from PTI)