Near term capacity addition in wind energy sector to depend upon bidding plans by SECI and utilities: ICRA

The state distribution utilities (discoms) are expected to adopt the competitive bidding mechanism for awarding wind energy projects, going forward, given the significant decline in wind energy tariffs as observed in the bidding for the 1000 MW wind scheme by Ministry of New & Renewable Energy (MNRE) in February 2017.

Mr Girishkumar Kadam, Sector Head & Vice President, ICRA Ratings said, “While the introduction of competitive bidding remains favourable for the discoms, the fresh capacity addition in the wind power segment in the near term could be affected during the transition period from a feed-in tariff mechanism to a competitive bid based mechanism. The same would also depend upon the bidding plans by discoms and award of projects through bidding route in a timely manner. In this context, discoms in some of the key states have already stopped signing fresh power purchase agreements (PPAs) under the feed-in tariff mechanism and this would increase the risk profile of the wind IPPs which are under construction and without PPAs.”

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