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Relief for smaller wind power projects as feed-in tariffs to stay

Power News - Published on Fri, 12 Jan 2018

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Business Line reported that coming to the aid of small wind power players, the Centre proposes to continue with the feed-in-tariffs mechanism for such producers. Last year, when the government went in for auctioning of wind projects, it moved away from the feed in tariffs concept. However, with tariffs reaching a low of INR 2.43 a unit, players with low capacity were finding the going tough.

Seeking redressal, the industry had not only approached the Minister for New and Renewable Energy but also knocked on the doors of the Prime Minister’s Office.

Mr K Kasthurirangaian chairman of the Indian Wind Power Association, told BusinessLine that “The Secretary, Ministry of New and Renewable Energy, had held a meeting with with industry players on January 2. He added that “At the meeting it was decided that wind energy projects of less than 25 MW will be allowed to operate under the feed-in-tariff regime. The Secretary said that he would write to State governments to enable the same. The existing rates for feed-in-tariffs are expected to continue.”

Tariff decline
Wind energy tariffs had crashed with the introduction of reverse auctions for the award of wind energy projects.

Tariffs fell further to INR 2.43 a unit in December 2017 for the auction of a 500 MW wind power generation project in Gujarat.

Girishkumar Kadam, Sector Head and Vice-President, ICRA Ratings, had said that “The viability of such tariffs remains a challenge and it would depend up on the availability of long-tenure debt at cost competitive rates, capital cost, plant load factor level and the ability of the developer to identity locations with high generation potential.”

A wind energy player said that “smaller players cannot operate with such low tariffs and subsequently lower margins. State governments are now shying away from awarding projects under the FIT regime. The Centre must push States to ensure that smaller projects get the fixed rate.”

This view has found favour with the Central government.

According to an MNRE official, “The guidelines for tariff based competitive bidding for procurement of power from Grid Connected Wind Power Projects specify that all projects above 25 MW will be auctioned. It has not been specified how the smaller projects will be awarded. We believe that the feed-in-tariff approach can continue there.”

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Posted By : Nanda Koijam on Fri, 12 Jan 2018
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