India’s largest power generation company, a predominantly thermal power company, has issued its first federal-level wind energy tender.
NTPC Limited recently issued a tender to auction 2 gigawatts of wind energy capacity across India. The tender is very similar to the ones floated by the Solar Energy Corporation of India over the one year.
Developers will be free to set up projects in states and at sites of their choosing. The minimum capacity bid a company can place is 50 megawatts, while the maximum is 500 megawatts. The developers will be required to commission the projects within 18 months from signing the power purchase agreement.
As in the case of SECI tenders, the developers will not sign power purchase agreements directly with the end buyers. In SECI tenders, the developers signed power purchase agreements with SECI which, in turn, signed agreements with power distribution companies interested in buying wind power to meet their renewable purchase obligations. SECI acts as a power trader and earns a commission as well.
In NTPC’s case, its trading arm NVVN Limited will act as the trader and also earn a commission.
The Indian federal government has announced an aggressive auction timeline for the wind energy sector as it aims to achieve an installed wind energy capacity of 60 gigawatts by March 2022. It plans to complete all auctions to reach that capacity by March 2020 so that developers have adequate time to commission their projects.
In addition to the federal government, which auctions wind projects through SECI, several state governments are also expected to launch wind energy tenders. Tamil Nadu, Maharashtra, and Gujarat have already auctioned more than 1.3 gigawatts of wind energy capacity. This accounts for about a fourth of the total wind energy capacity auctioned since competitive bidding was first introduced in India’s wind energy sector last year.