India’s NTPC Awards 1.2 Gigawatts In First-Ever Wind Energy Auction

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Lack of transmission infrastructure seems to have shown its impact on the financial considerations of project developers in India. Project developers have quoted substantially higher tariff bids in a national-level wind energy auction organized by NTPC Limited.

The first-ever national level wind energy auction organized by NTPC Limited — India’s largest power generation company — saw a huge increase in the lowest tariff bid. NTPC had offered 1.2 gigawatts of capacity wherein developers were free to set up projects at sites of their choosing. 

Against the offered capacity of 1,200 megawatts, NTPC received offers to set up 1,750 megawatts from seven project developers. The lowest tariff bid was quoted by Sprng Energy at Rs 2.77/kWh (¢3.85/kWh) for 200 megawatts of capacity. This was followed by Mytrah Energy which placed a bid for 300 megawatts of capacity at Rs 2.79/kWh (¢3.88/kWh).

Continuum Wind Energy and SITAC RE secured rights to develop 50 megawatts of capacity each at Rs 2.80/kWh (¢3.90/kWh) and Rs 2.83/kWh (¢3.94/kWh), respectively. ReNew Power Ventures and Hero Wind Energy won 300 megawatts of capacity each at Rs 2.81/kWh (¢3.91/kWh) and Rs 2.82/kWh (¢3.92/kWh), respectively.

SITAC RE had placed a bid for 300 megawatts of capacity but managed to capture just 50 megawatts due to its relatively higher bid, and exhaustion of offered capacity. Adani Green Energy also offered to set up 300 megawatts but had placed a bid of Rs 2.89/kWh (¢4.02/kWh), the highest and the only non-qualifying bid.

The lowest bid of Rs 2.77/kWh (¢3.85/kWh) is over 10% higher than the lowest bid in previous national-level wind energy tender issued by the Solar Energy Corporation of India. The lowest bid in tranche-IV of the SECI wind energy tender was Rs 2.51/kWh (¢3.49/kWh). The lowest bid in NTPC tender is the highest for a national-level tender since the very first one organized by SECI in February 2017.

One of the reasons for such increase in the tariff bid is the lack of transmission infrastructure. We reported recently that of the 6.05 gigawatts of wind energy auctioned by SECI at the national level, transmission infrastructure is not available for at least 4.95 gigawatts of capacity. Construction of this infrastructure was approved only a few months back, and will entail an investment of $56 million. 

SECI itself had to cancel and re-tender a 2 gigawatt tender after developers offered to set up just 1.2 gigawatts of capacity for tranche-V of national-level tenders. The fresh tender will now offer just 1.2 gigawatts of capacity.

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