MNRE SECI Wind 2 GW ISTS Program

The Solar Energy Corporation of India (SECI) will be tendering 2,000 MW of inter-state transmission system (ISTS)-connected wind projects to be developed across the windy states in December 2017. The President of India has given his approval for implementation of program to set up 2,000 MW of ISTS-connected wind projects, SECI will be the implementing agency.

According to SECI, after the discovery of competitive tariffs in wind sector the distribution companies (DISCOMs) are willing to purchase more wind power to comply with their non-solar renewable purchase obligations (RPOs).

The objectives of this program include facilitating fulfilment of non-solar RPOs of DISCOMs of non-windy states and encouraging competitiveness in the wind power sector. The wind projects developed under this program will be set up on build own operate basis.

Guidelines for Implementation of the Program

  • SECI will be the implementing agency.
  • Bidders will be selected through reverse bidding.
  • A single bidder can bid for a minimum of 50 MW and a maximum of 400 MW of wind projects.
  • SECI will enter into power purchase agreement (PPA) with developers and power sale agreement (PSA) with buyers for a 25-year period.
  • SECI will develop a mechanism for online project performance monitoring.
  • The project completion timeframe will be 18 months.

In November 2016, SECI tendered the first 1,000 MW of wind at the behest of Ministry of New and Renewable Energy (MNRE). The first wind auction saw developers winning projects by quoting a low tariff of ₹3.46 (~$0.051)/kWh.

Seeing that the wind tariffs dropped below ₹3.50 (~$0.054)/kWh mark in the first-ever reverse auction for wind, in June 2017, SECI tendered another 1,000 MW of ISTS-connected wind power projects under Tranche-II. In the second wind auction, ₹2.64 (~$0.0413)/kWh was the lowest tariff quoted. In a span of two auctions wind tariff fell by ~24 percent.

This 2 GW of wind when tendered will be a good bet for wind project developers, they need not worry regarding payments or delays. SECI is now turning into a power trader. Recently, SECI invited trading licensees to participate in a tender for providing support services to facilitate the trading of power at SECI, New Delhi.

Unlike few other state-specific wind tenders like the ones in Tamil Nadu and Gujarat, which faced difficulties due to the petitions filed against the tendering; this tender when issued by SECI will be under the MNRE guidelines, no one can contest its legibility.

When contacted, an MNRE official told Mercom, “Competitive bidding has changed the landscape of wind energy sector, plus the power sector is evolving, allowing for the ISTS connectivity; it is a good move to make most of the investment made in new transmission and evacuation system. There are many places with ISTS connectivity where solar generation is not possible, but wind is.”

When asked regarding the exact date on which SECI will tender this capacity, the MNRE official said, “In the implementation guidelines it is mentioned that SECI will issue a request for selection (RfS) 10 days after the approval, so it must be in December, now it is up to SECI. The MNRE has already issued guidelines regarding transparent reverse bidding.”

Mercom previously has published on the impact of reverse auction on the wind sector. According to MNRE, cumulative wind power installations have reached 32.7 GW as of September 2017.

According to Mercom’s recently released Q3 2017 India Solar Market Update, Solar and Wind power accounted for over 60 percent of new power capacity additions in the first nine months of 2017.

Image credit: Inox Wind