Wind power tariff plunges to record low of ₹2.64 per unit

NEWDELHI: India’s wind power tariff fell to a record low of ₹2.64 per unit in an auction conducted by state-run Solar Energy Corp. of India (SECI) for 1 gigawatt (GW) of wind power contracts that ended on Thursday.

While ReNew Power Ventures Pvt Ltd and Orange Sironj Wind Power Pvt. Ltd bid ₹2.64 per kilowatt hour (kWh) to win contracts for 250 megawatts (MW) and 200MW each, Inox Wind Infrastructure Services Ltd and Singapore-based Sembcorp Industries Ltd’s Green Infra Wind Energy Ltd bid a tariff of ₹2.65 per unit for securing contracts of 250MW each. Adani Green Energy (MP) Ltd also bid ₹2.65 per unit to win a 50MW contract.

“Against the 1,000 MW capacity SECI received 12 number of bids totalling to 2,892 MW capacity of which nine bids with a cumulative capacity of 2,142 MW were shortlisted for e-reverse auction,” the government said in a statement. These firms quoted the price at which they will sell electricity, to win contracts under the tender that received demand for three times the gridlinked capacity being sold.

These tariffs are lower than the average rate of power generated by coal-fuelled projects of India’s largest power generation utility, NTPC Ltd, at ₹3.20 per unit. The price gap between electricity generated from thermal, solar and wind projects has been bridged. This is primarily due to costs of solar modules and wind turbine generators falling by 80% and 20%, respectively, over the past five years.

Experts believe such tariffs couldn’t have been expected earlier. “These are unbelievable prices. One would have never imagined these kind of margins,” said Anish De, partner at the infrastructure and government practice at KPMG.

All the nine firms in the fray for the reverse auction bid below the earlier recorded low of ₹3.46 per kWh for another 1GW tender in February floated by SECI. In a reverse auction, developers are chosen on the basis of the lowest prices offered.

India witnessed record low solar tariffs of ₹2.44 per unit in May which firmed up to ₹2.65per kWh in an auction conducted by the Gujarat government last month.

While a Sembcorp spokesperson in an emailed response said, “Sembcorp Green Infra Ltd has participated in the second wind auction and has emerged as one of the successful bidders,” queries send to the spokespersons of a ReNew Power, Adani Group and Inox Group on Thursday remained unanswered.

India has a target of installing 175,000 MW of renewable energy by 2022. Of this, 100,000 MW are to be generated by solar projects and 60,000MW by wind projects.

INDIA HAS A TARGET OF INSTALLING 175,000 MW OF RENEWABLE ENERGY BY 2022. 100,000 MW ARE TO BE GENERATED BY SOLAR PROJECTS AND 60,000 MW BY WIND PROJECTS