Wind energy tariffs in India are set to crash to levels of the lowest solar power tariff bids in the upcoming and the first-ever wind energy auction.

Media reports suggest that wind energy tariff bids could fall to as low as INR 4.00/kWh (5.90¢/kWh) once the 1 gigawatts of wind energy capacity is auctioned and allocated to project developers over the next few days. This will mark a 20% discount to the average wind energy feed-in tariffs determined by the various state regulators across India.

The auction, being organised by the Solar Energy Corporation of India, did not have a benchmark tariff but the general lack of high wind speed sites across the country may push the bidders to place quite competitive bids.

Interestingly, the capital cost for setting up each megawatt of solar photovoltaic power plant and wind energy project is fairly the same in India, around $0.73-0.88 million. The lowest solar PV tariff for utility-scale solar power project is INR 4.34/kWh (¢6.40/kWh). However, in that case land for the project was provided by the government while in the case of wind energy auction the project developers will have to acquire land.

Still, a parity between wind and solar power projects will be remarkable. Solar power tariffs in India have collapsed sharply over the last six to seven years specifically due to the introduction of competitive auctions. Wind energy sector has prospered into the largest renewable energy technology in terms of installed capacity due to higher feed-in tariffs which continued to increase despite a fairly stable capital cost requirement and introduction of larger and more efficient turbines.

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