India’s New Wind Energy Auction Guidelines Will Cut Tariffs
India has approved a new set of guidelines for the auction of wind energy projects under the central government policy. The guidelines are expected to push the tariffs even lower, as they include some crucial offerings to developers not seen in the sector before.
The Ministry of New and Renewable Energy recently announced fresh guidelines for the competitive auction of wind energy projects by the Solar Energy Corporation of India. The guidelines offer a further boost to the project developers through a PPA intermediary and payment security mechanism.
The guidelines specify a minimum capacity of a 5 megawatt project at a single site with a minimum bid of 25 megawatts for intra-state projects, that is, where power generated from the project is consumed within the host state.
For inter-state projects, the minimum project size as well as the minimum bid size is 50 megawatts.
The Solar Energy Corporation of India has already auctioned 1,050 megawatts of capacity each in two auctions. The tariffs have, between the two auctions, collapsed from ₹3.64/kWh (¢5.7/kWh) to ₹2.46/kWh (¢3.8/kWh). This pattern has been prevalent in the solar power sector, especially in the auctions conducted by or on the behalf of NTPC Limited, India’s largest power generation company.
NTPC Limited acts as an intermediary between solar power developers and the power distribution companies. This helps cushion the solar power developers from the risk of payment default by the power distribution companies.
The same concept has been replicated in the wind power sector as well. Here, the intermediary is PTC India Limited, another government entity which will sign power purchase agreements with wind power developers and then back-to-back power purchase agreements with power distribution companies.
Additionally, the wind power developers wiall also have access to a payment security fund which will be mobilized in the event of any payment default from power distribution companies. This is a recent concept developed by the SECI after the Ministry of New and Renewable Energy received several complaints from project developers regarding long delays in payments.
India aims to have 60 gigawatts of installed wind energy capacity by March 2022. The central government will auction 20 gigawatts between April 2018 and March 2020. State governments would presumably organize their own auctions separately. India’s current operational wind energy capacity stands at 32 gigawatts.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Latest CleanTechnica.TV Video
CleanTechnica uses affiliate links. See our policy here.
