Karnataka Proposes Ceiling Tariff of ₹2.91/kWh for Wind Tenders

The Karnataka Electricity Regulatory Commission (KERC) has proposed a ceiling tariff of ₹2.91 (~$0.04)/kWh for the wind tenders issued by the distribution licensees in the state for the financial year 2021-22.

The stakeholders have time until April 08, 2021, to submit their comments and suggestions to the Commission.

The proposed tariff will come into effect from April 01, 2021, and will be valid until March 31, 2022.

The Commission noted that the wind tariffs discovered under the competitive bidding process have been under ₹3 (~$0.041)/kWh in the recent past. As per the details obtained from the Solar Energy Corporation of India (SECI), the tariffs discovered in the FY 2020 were in the range of ₹2.79 (~$0.038)/kWh to ₹2.83 (~$0.039)/kWh. For Tranche VII and Tranche VIII, the prices were in the range of ₹2.83 (~$0.039)/kWh to ₹2.84 (~$0.039)/kWh.


Citing the case of Tamil Nadu, the Commission noted that the Tamil Nadu Electricity Regulatory Commission had approved a tariff f ₹2.91 (~$0.04)/kWh for procuring wind power by the distribution licensee, which included ₹0.07 (~$0.0009)/kWh of trading margin.

In the earlier tariff order issued by the Commission, a generic tariff of ₹3.26 (~$0.044)/kWh was prescribed as the ceiling tariff for the reverse bidding for wind projects during the FY 2019-20. The tariff was also applicable for payment toward any banked energy purchased by the distribution licensee. The tariff determined in the order dated February 27, 2019, was in force from April 01, 2019, to March 31, 2020.

Later, through another order dated May 06, 2020, the ceiling tariff of ₹3.26 (~$0.044)/kWh was continued for the bidding process and the payment of banked energy purchased by the electricity supply companies (ESCOMs) for the FY 2020-21.

Considering all the factors, the Commission proposed a ceiling tariff of ₹2.91 (~$0.04)/kWh for the bidding process and the procurement of wind power by the state’s distribution licensees during the FY 2021-22. The proposed tariff will also be applicable for the payment toward any banked energy purchased by the distribution licensee.

Wind installations in India were up nearly 70% in the fourth quarter of 2020 (Q4 2020), with about 500 MW of capacity added compared to 295 MW installed in Q3 2020. However, installations year-over-year (YoY) were 13% lower than Q4 2019, which saw about 575 MW added during the quarter. Cumulative installations at the end of Q4 2020 stood at 38.6 GW.

In May last year, the Gujarat Electricity Regulatory Commission (GERC) announced the tariff framework for the procurement of wind power by distribution licensees. The Commission decided that the tariff for all wind projects in the state would be determined through competitive bidding, doing away with generic tariffs.

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