The first wind energy auction conducted by an Indian state generated a record low tariff of Rs 3.42 per unit, which the central government said is a positive development that will encourage distribution companies to buy more renewable power.
The lowest bidders in the sale by Tamil Nadu were ReGen Powertech, which sought 200 MW at Rs 3.42 per unit, Leap Green Energy, which asked for 250 MW at Rs 3.43 per unit, and public sector mining giant Neyveli Lignite Corp., which offered Rs 3.45 per unit for the entire 500 MW. Tamil Nadu Generation & Distribution Co. (Tangendco) had invited the bids.
Ministry of New & Renewable Energy Secretary Anand Kumar welcomed the fall in tariff. He informed media that the competitive bidding is done for fair competition. He further mentioned that as cost of renewable power goes down, discoms would willingly take renewable power.
The size of projects to be allocated is yet to be decided. Tangendco is trying to get the state power regulator’s consent to increase the total allocation to 950 MW so that the winners can be assigned the project sizes they sought.
The lowest wind tariff until now had been Rs 3.46 per unit, achieved at the first wind auction held in February by Solar Corporation of India, a firm under the Ministry of New & Renewable Energy. Tangendco’s auction, the first by a state, had set a reserve price of Rs 3.46 per unit.
The fall in tariff is likely to intensify problems of wind developers with partially completed projects or those without power purchase agreements. Many state distribution companies now refuse to buy wind power at previously set rates of Rs 4-6 per unit from these projects, putting them in jeopardy.
By Baishakhi Dutta
