‘Competitive bidding positive for wind industry in the long run’

The first wind auction conducted in February led to a fall in tariff to ?3.46 per unit — down 16.8 per cent from the lowest prevailing feed-in tariff of ?4.16 among the windy States, India Ratings (Ind-Ra) said in a recent report.

The second wind auction rolled out in the beginning of July was oversubscribed 2.9 times, with more than 10 large developers participating. Although the reverse auction is being delayed and the tariff is yet to be discovered, analysts and industry players expect wind tariffs to go further down.

Hence, the cost of wind power is close to achieving grid parity which solar power has already did after the tariff dropped to ?2.44 per unit in the recent Bhadla solar park auction. Wind power, at the moment, is just 2 per cent above coal, according to Morgan Stanley report on India’s renewable sector.

Given the existing overcapacity and stagnant power demand, the state electricity boards (SEBs) are likely to choose solar or wind power instead of signing short-to medium-term (3-10 years) coal-based PPAs incrementally. Moreover, with wind power tariff dropping further, non-wind generating Statesmay be interested in procuring wind power from “windy” States by laying down transmission lines which will overall increase the demand and off-take for wind projects.

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