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Wind power tariffs in Gujarat auctions fall to Rs 2.43 per unit

Power News - Published on Tue, 26 Dec 2017

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Wind power tariffs in the country have dropped to a new low of INR 2.43 per unit in 500 mw reverse auctions conducted by Gujarat Urja Vikas Nigam Limited on Thursday. The striking drop in wind power tariffs is being looked at as a matter of concern by the wind industry.

The tariffs are lower than the previous record of INR 2.64 per unit in wind auctions conducted by Solar Energy Corporation of India in October. The previous lowest tariff was INR 3.46 per unit arrived at another SECI auction in February this year.

Leading industry players think that aggressive fall in tariffs do not make much sense as there is an entire pipeline of auctions announced by the government for wind and solar auctions.

Sprng Energy Private Limited and KP Energy Limited bid the lowest at INR 2.43 per kWh, for 197.50 MW and 30 MW capacities, respectively.

Mr Sunil Jain CEO of Hero Future Energies, said there must be a rationale behind developers quoting such low prices. Mr Jain who is also the president of Wind Independent Power Producers' Association said that "The falling tariffs are upsetting the applecart, and the industry could do very well at tariff around Rs 2.75 per unit, which would be a win-win situation for all parties.”

Indian Wind Energy Association (Inwea), in a petition filed in Supreme Court earlier this month, said "competitive bidding could squeeze the developers of wind generators to put more pressure on the OEMs."

Addressing concerns of original equipment manufacturers (OEMs), Jain said they need to fend for themselves and should set a lower selling price limit for developers.

Mr Jain said that "The bids are definitely aggressive, but if OEMs are worried about shrinking margins then they have to draw a line somewhere that they cannot go below a certain number. If you offer a developer low cost, he will pass it on to the tariff.”

A leading industry player said that "At this rate, wind power sector too may turn like solar where competition is ailing the sector. It's not in interest of Indian OEMs."

The second lowest bids in the auctions were received at INR 2.44 per unit by Verdant Renewables Pvt Ltd, Betam Wind Energy Pvt Ltd, and Powerica Ltd for capacities of 100 mw, 29.90 mw and 50 mw, respectively.

Leading independent power producer ReNew Power quoted INR 2.45 per unit for 200 mw capacity.

Among the 12 players who participated in the bid, the highest bid was placed at INR 2.95 per unit by Hero Wind Energy Private Limited.

Some industry experts believe that the Gujarat auction results are not representative of the industry and may not be sustained as the capacity scales up.

Mr Kameswara Rao, leader energy, utilities and mining at PwC India said that "A new low was not unexpected as the lull in wind energy PPAs made good sites and equipment available.”

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Posted By : Rabi Wangkhem on Tue, 26 Dec 2017
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