In India, wind power tariff has dropped below ₹3/kWh for the first time with the lowest winning bid of ₹2.64 (~$0.0413)/kWh quoted in the second 1 GW wind auction conducted by the Solar Energy Corporation of India (SECI), which was tendered in June 2017.

With this auction result, wind tariff is now just 8% off the lowest solar tariff of ₹2.44/kWh. Wind and solar are now both below the average thermal power tariff.

In the second 1 GW wind auction by SECI, all bidders quoted below the previous low wind tariff of ₹3.46 (~$0.0541)/kWh quoted in the first ever wind auction in India. Between the two auctions wind tariff has dropped by ~24 percent.

In the auction ReNew Power quoted the L1 tariff of ₹2.64 (~$0.0413)/kWh to win contract to develop 250 MW of wind project, Orange Sironj Wind Power quoted ₹2.64 (0.0413)/kWh to develop 200 MW of wind project.

Inox Wind, Green Infra Wind Energy and Adani quoted a tariff of ₹2.65 (~$0.0414)/kWh to develop 250 MW each. Inox Wind and Green Infra were awarded 250 MW each and Adani was awarded 50 MW, according to a SECI official.

Overall, nine developers quoted tariff below ₹3 (~$0.0469)/kWh. BLP Energy, Sprng Energy, Hero Wind Energy and ReGen Powertech were the other bidders who participated in the financial round and quoted tariffs between ₹2.72 (~$0.0425)/kWh to ₹2.80 (~$0.0438)/kWh.

A ReNew Power executive said, “we are the lowest bidder and these tariffs are viable, the government body CERC has given directions for utilization of evacuation bays and this is a plus as we won’t have to wait to get connected to evacuation infrastructure once the project is complete.”

When contacted after the auction, an Inox Wind executive told Mercom, “As a procurement mechanism, reverse auctions are specifically considered to be effective in increasing cost efficiency and discovering the least price for generating electricity from a technology, due to their competitive nature.”

“The entire industry is taking a turn and along with the changing tax and regulatory structure, it will take some time to get settled. There are few positive aspects of certainty of PPA and payment from distribution companies (DISCOMs) which this mechanism has brought which may set off some part of impact that has occurred due to lower tariff. We, being the most cost competitive in the industry, see this as a golden opportunity to expand our business share. Let this mechanism get filtered and settled down. The only thing needed is to bring invention to further cut down the cost of generation,” added the Inox Wind executive.

The executive further said that, “on these tariffs if you want healthy IRRs, you need bigger turbines with bigger rotor diameter, which would help in yielding more energy compared to the added cost”.

An Adani executive told Mercom, “after solar the wind sector is picking up and introduction of reverse auction is helping boost wind project installation as the sector is being centralized via procurement through government contracts.”

Mercom previously has published on the impact of reverse auction on the wind sector.

According to MNRE, cumulative wind power installations have reached 32.6 GW as of August 2017.

Image credit: Inox Wind