The first-ever competitive auction in wind energy sector in India has received an overwhelming response from project developers with the tender being oversubscribed 2.6 times.
The Solar Energy Corporation of India (SECI) has floated India’s first wind tender for the development of 1 GW of wind projects earlier this month.
The tender was oversubscribed with total 13 developers submitted bids equivalent to 2.6 gigawatts in comparison to 1 gigawatts bids called for. Bids were received from major giants including Adani Power, Hero Future Energies, Renew Power and Inox Wind. Most of the developers i.e. 69% bid to set up projects in the state of Tamil Nadu.
The tender was floated for project sizes 50-250 megawatts. Bidders are free to set up project anywhere in India but are mandatorily required to connect their projects to 220 kV national grid allowing distribution companies to purchase power anywhere.
The SECI tender is unique in two ways – first, selected bidders will sign 25 year long-term power purchase agreements with power trading company, PTC India, which will sign back to back power purchase agreements with as yet unknown distribution companies; and second, existing operational projects and under construction projects are eligible to participate.
Most of the experts from the wind industry believe that competition like this would potentially bring down wind energy tariffs which currently ranges from INR 3.9 to 5.9 per kWh.
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.