(FE)
Electricity tariffs discovered in the latest reverse auctions conducted by the state-run Solar Energy Corporation of India (SECI) for 2,000 MW of wind power have brought relief to the industry. The lowest price quoted in the bidding which concluded late Thursday was Rs 2.51/unit, 16% higher than the previous low of Rs 2.44/unit discovered under any central government scheme. The latest bidding marks a reversal of the trend where tariffs discovered in every SECI auction was lower than the previous one. Srijan Energy Systems, Sprng Energy, BLP Energy, Betam Wind, Inox Wind and Adani Green Energy bid for 250 MW, 300 Mw, 285 MW, 200 MW, 100 MW and 300 MW, respectively, by quoting the lowest price. Mytrah Energy and ReNew Wind Energy were awarded 300 MW each for tariffs of Rs 2.52/unit.
The Rs 2.44/unit tariff was discovered in February 2018, which was about 30% lower than the tariff discovered in the first SECI wind power auction in February 2017. Industry experts claim this to be the end of the transitional phase in the wind industry, where tariffs are now determined through reverse auctions instead of the prevalent “feed-in tariff” (FiT) regime – a cost plus pricing mechanism. Wind industry players FE spoke to attributed the firming up of tariffs to the auction trajectory charted by new and renewable energy minister RK Singh and equipment manufacturers’ desperation to clear their inventory which had been piling up during the lull when wind capacity addition halted amid temporary uncertainties caused by the aforementioned transition and removal of government sops such as accelerated depreciation and the ‘generation-based incentive’ scheme.
“The government’s auction pipeline of 10GW each in FY19 and FY20 would lead to strong and sustainable growth for the Indian wind sector,” Kailash Tarachandani, chief executive officer of Inox Wind, said. Experts noted that this allows players to chalk out their financial plans accordingly. When asked if higher tariffs would raise the risk of discoms becoming more hesitant to procure wind energy, another wind company official, who did not wish to be identified, said since the latest wind prices are much lower than the average thermal cost of `3.20/unit, discoms should find this attractive.
