New Delhi: Tariffs climbed substantially in the latest reverse auction of 1,200 MW of wind powerprojects, held by NTPC.
In the first wind project auction in four months, winning tariffs reached Rs 2.77-2.83 per unit. The last auction in April, carried out by Solar Energy Corporation of India (SECI), had seen prices of Rs 2.51-2.52. Industry insiders ascribed the increase to higher finance cost and limited availability of transmission facilities.
The lowest bid came from Sprng Energy, the renewable energy platform of London-headquartered private equity fund Actic LLP, which won 200 MW by offering to supply power at Rs 2.77 per unit. Local developer Mytrah Energy won 300 MW at Rs 2.79 and Singapore-based Continuum won 50 MW at Rs 2.80. Both Renew Power and Hero Future Energies sought 300 MW at Rs 2.81 and Rs 2.82, respectively. French state-run EDF won 50 MW at Rs 2.83 per unit.
Initially, NTPC was aiming to auction 2,500 MW of projects, but got bids only for 2,000 MW. After this, it reduced the tender to 1,200 MW.
“Sites in Tamil Nadu and Gujarat are taken already. Connectivity issues remain unsolved; transmission facilities are not keeping pace with power generation,” said a wind developer, explaining why the response was lukewarm. Tamil Nadu and Gujarat possess the best sites to generate wind power, whose production requires high wind speeds. Only eight states in India have wind speeds high enough to generate power.
SECI had cancelled a 2,000 MW tender it brought out recently due to poor response. Only four developers had submitted technical bids, all for 300 MW each. Others stayed away as they felt more substations and transmission lines needed to be built for smooth evacuation of the power produced.
“Another reason why participation has been lukewarm is because 8,000 MW of wind tenders are already in the pipeline following auctions that were held earlier,” said the same developer. It takes around 18 months to commission a wind power project.
Wind tariffs had dropped to a record low of Rs 2.43 per unit in an auction conducted by Gujarat Urja Vikas Nigam Ltd in December 2017