The second-ever wind energy auction in India reaped encouraging results with nearly twice the capacity allocated as offered, and at record-low tariffs.
Earlier this year, the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) floated a tender to set up 500 megawatts of wind energy capacity. This was the first wind energy auction organized by a state after the central government, and many state governments, moved away from the feed-in tariff regime.
The Indian government, through the Solar Energy Corporation of India, offered 1,000 megawatts of wind energy capacity through competitive bidding. SECI allocated 1,050 megawatts of capacity at ₹3.46/kWh (6.8¢/kWh), which is lower than any feed-in tariff on offer across the country.
TANGEDCO had set ₹3.46/kWh (6.8¢/kWh) as the ceiling price for its 500 megawatt auction, so a new tariff record is not exactly unexpected.
The lowest bid was submitted by Regen Power Tech, a wind turbine manufacturer, for 250 megawatts of capacity at ₹3.42/kWh. Another company, Leap Green Energy, also secured 250 megawatts at ₹3.43/kWh.
Interestingly, coal mining company Neyveli Lignite Corporation secured 400 megawatts of capacity at ₹3.45/kWh. The company has stated ambitious plans to expand into the renewable energy market. It had recently won 709 megawatts of solar power capacity in a solar power auction also organized by TANGEDCO.
Tamil Nadu leads Indian states in terms of installed wind energy capacity – it has 7,500 megawatts of operational wind projects. The path that Tamil Nadu takes will very likely be emulated by other states. Already, Gujarat has issued a wind energy tender. Several other states have refused to sign power purchase agreements with wind energy projects ever since the tariff bids fell well below the average feed-in tariff of around ₹5.00/kWh.
While Tamil Nadu has moved to a more market-efficient model for setting up wind energy projects, it has yet to improve upon the operational conditions for wind projects. Several developers have complained that they are forced to reduce wind power generation in the absence of adequate transmission capacity while there have also been reports of delay or non-payment to the developers by power utilities.