After two under-subscribed auctions, the Solar Energy Corporation of India (SECI) has floated a new tender for setting up 1,800 MW of wind power plants - making it the country's maiden wind bid announcement for FY20. Participating bidders cannot quote a tariff of more than Rs 2.85/unit.
In the previous round of wind auction, the SECI could allot only 480 MW capacity against the invitation of 1,200 MW. To date, 16 GW of capacity has been called for auction since February 2017 by various central and state government agencies. Out of this, 12.4 GW has been allotted.
The lowest tariff discovered in the last auction held in March was Rs 2.82/unit, much higher since February last year when the price had bottomed out at Rs 2.44/unit. Capacity addition of wind power units has recently slowed down, with 1,480 MW getting installed in the FY19 (against 1,865 MW in FY18 and 5,502 MW in FY17).
"The less capacity addition is due to the transition of wind power sector from feed-in tariff regime to transparent competitive bidding mechanism and issues relating to land acquisition in certain states," power minister RK Singh said on Thursday in a response to a question in Parliament.
The industry has also attributed lack of adequate transmission infrastructure as a reason behind tepid response to auctions. Wind power projects of around 8,590 MW capacity are currently under implementation.
The government provides various financial incentives to developers such as accelerated depreciation and concessional custom duty exemption on certain components of wind electric generators. Besides, a generation-based incentive (GBI) scheme was available for wind projects commissioned before FY17-end.
The Ministry of New and Renewable Energy has also issued orders to waive inter-state transmission charges and losses for inter-state sale of wind and solar power projects to be commissioned by March, 2022.
Further, wind and solar power projects are accorded 'must run' status.