India Relaxes Terms For Federal Wind Energy Auctions

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The Solar Energy Corporation of India has modified some requirements for the fourth federal-level wind energy auction. The modifications are likely to be welcomed by project developers, as participation has been made easier and penalties have been reduced slightly.

First, SECI has made amendments to the original Request for Selection (RfS) document so that project developers willing to participate in the auction can submit various kinds of fees through electronic means, in addition to submitting physical instruments. This would be highly beneficial to companies that are not located in close proximity to the SECI office in the National Capital Region of Delhi as well as foreign companies planning to participate in the auction.

Next, SECI has also diluted some requirements for foreign companies with regards to submission of audited financial documents. This will be a major breather for foreign companies looking to participate in the auction and also attract more international companies to India’s wind energy market. This is also important as India plans to open the offshore market soon where Indian companies have no experience and would likely partner with international firms.

There is also good news for successful developers in case they miss the scheduled date to commission projects. As per the original RfS document, developers would have faced a reduction in tariff by Rs 0.50/kWh (0.77¢/kWh) for each day of delay of over six months in project commissioning. This has now been reduced by 70% to Rs 0.15/kWh (0.23¢/kWh).

Several other provisions that project developers would find beneficial have been modified slightly. These include provisions to sell excess electricity generated by the projects to third-party buyers. A similar provision was included in the Rewa solar power park tender which is regarded as a milestone in India’s solar power market.

If the project is part-commissioned before the scheduled commissioning date, the developer can sell the power at 75% of the tariff discovered in auction to the designated power distribution company. This means that the developer would not be left high-and-dry to work out options to sell this electricity.

SECI plans to auction several gigawatts of capacity over the next few months on a regular basis in order to push the installed capacity to 60 gigawatts by March 2022. The third federal-level auction held last month saw tariffs stabilize at Rs 2.44/kWh (3.8¢/kWh), which remains the lowest wind energy tariff bid in India.

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An avid follower of latest developments in the Indian renewable energy sector.

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