Wind power tariff fell to a record low of Rs 3.46 per unit on Friday (February 24) in an auction of 1,000-MW capacity conducted by Solar Energy Corporation of India (SECI). This is another significant development for clean enegy after solar power touched all-time low of Rs 2.97 per unit earlier this month for Reva solar Park.
"After solar cost reduction below Rs 3/unit, wind power cost down to Rs 3.46/ unit through transparent auction. A green future awaits India," Power, Coal, New and Renewable Energy Minister Piyush Goyal said in a tweet.
Mytrah Energy (India) Ltd, Green Infra Ltd, Ostro Kutch Wind Pvt Ltd and Inox Wind Infrastructure Services Ltd quoted Rs 3.46 per unit to win contracts for 250-MW each, said several people aware of the development. Hero Future, Inox, ReNew and Gamesa were among those that were still in the race at the time of going to print.
Experts say that by the time the final winner is chosen from this bidding process, the tariff could be lower than Rs 3.46 per unit of wind energy.The bids received is extremely lower than the current average Feed-in-tariff (FiT) of Rs 5 per unit in the wind sector. Power Trading Corporation of India is the agency for purchase and sale of wind power after entering into a power purchase agreement for 25 years with the successful bidders.
There have been windy woes as despite of RPO obligations, electricity generated wind projects are not the preference of the distribution companies with the sector facing challenges of delays in payments and signing of PPAs.
The question is again on the sustainability of these projects. There is always an ongoing fight between the 2 sources- Solar and Wind with the former being cheaper. However, in the recent developments the price gap between electricity generated from thermal, solar and wind projects has been narrowing, owing to the costs of solar modules and wind turbine generators falling by 80 per cent and 20 per cent, respectively, over the past five years.
Wind hold one major advantage, while solar is dependent on the Chinese imports for panel, the equipments for generating wind energy are entirely made in India. Again, despite of the advantages, viability of these competitive tariffs will depend on the cost of the modules and budgeting of the finances.
There have been warnings by the experts time and again against the aggressive bidding in both the sectors. Therefore, these companies will have to tie up for innovative financing to make up for these low tariffs.
At present with respect to the global wind installed capacity, India stands at number 4 position. The 2022 target for wind capacity has been pegged at 60 gigawatt and the current levels stand at nearly 28.08 gigawatt. Despite all, this auction gains does hold significance, seeking the targets.
BW Reporters
Naina Sood is a Economics graduate and has done her post graduation in International economics and Trade. She has deep interests in Indian economy and reforms
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