India’s Wind Capacity Addition Falls To New Low In Q3 2017
Wind energy capacity addition in India has dried up, falling to perhaps to its lowest quarterly value.
India witnessed a wind energy capacity addition of just 192 megawatts in the quarter of July-September 2017, the lowest since data is available. Capacity addition declined from 228 megawatts, which was also the lowest until that time.
The decline was even more pronounced if one compares with the wind energy capacity added in Q3 2016 — 932 megawatts. The share of wind energy addition in total renewable energy capacity addition fell to just 10% as 1,854 megawatts of renewable energy capacity was added in Q3 2017, mainly backed by solar power, which had a share of 89%.
India’s shift to competitive auctions in the wind energy sector led to this sharp decline in capacity addition. Several states, including Tamil Nadu and Gujarat, have announced plans to auction wind energy projects instead of signing power purchase agreements directly under the feed-in tariff regime. Other states, like Karnataka and Andhra Pradesh, have not announced wind energy auctions but have advised their power distribution companies not to sign any power purchase agreements under the feed-in tariff regime.
India’s central government, through Solar Energy Corporation of India, has organized two wind energy auctions. The first auction in February 2017 awarded 1,050 megawatts of capacity among five developers at the lowest tariff of Rs 3.46/kWh (5.3¢/kWh). The second auction in October 2017 also auctioned 1,050 megawatts among five developers at a lowest tariff Rs 2.46/kWh (3.8¢/kWh).
Tamil Nadu became the first state to auction wind energy capacity. The state allocated 250 megawatts to two developers at the lowest tariff of Rs 3.42/kWh (5.2¢/kWh).
Since the central government, and many state governments, have moved to competitive auctions the capacity addition pipeline is highly regulated and predictable. Since all these projects are allocated in one go and in a centralized manner, the capacity addition is unlikely to be distributed across the year and instead be concentrated in a few months.
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