First wind power auction to be without surety on purchase, evacuation infra

The county would have its first auction of wind power projects, but with no surety on power purchase and lack of evacuation infrastructure. Developers are likely to hedge risks by quoting higher tariff.

Projects of 1,000 Mw will go under the hammer, but there is no surety of off-take — the Centre has not tied up with any state for power sale. Some of the leading companies in the sector — Suzlon, Hero Future Energies, Sembcorp India, ReNew Power, Gamesa India — are likely to participate in the bidding.

According to industry estimates, the tariff to be around Rs 4.5-4.8 per unit, as against the government’s claim that it will come down to the level of solar power tariff (Rs 4 per unit). Till now, wind power projects were offered under the feed-in tariff model, with states signing for power procurement with the developer for a singular tariff for 25 years.

Solar Energy Corporation of India (SECI) has been designated as the nodal agency for implementing this scheme. Power Trading Corporation of India has been selected by SECI for purchase and sale of wind power after entering into a power-purchase agreement for 25 years with the successful bidders.

However, with just a week to go for the auction, no state has come forward with an interest to buy the power from these wind projects. 

“We have written to the states but there has been no favourable response yet. The matter has been discussed with the potential bidders and they have been duly informed,” said a senior official in the Ministry of New and Renewable Energy. The last meeting was held in November last year.

The industry has mixed responses to the incomplete tender process. 

“It is a cause of worry that we don’t know who will buy the wind power. The wind-rich states in the south are already meeting their renewable energy targets. Whereas for the others, there is no evacuation from wind-rich south and west to the deficit north,” said a senior executive in a leading wind energy company.

The responsibility of getting the inter-state transmission system (ISTS) connectivity and long-term access (LTA) lie entirely with the wind project developer. For getting LTA, a developer needs to submit the power injection and drawl point. In this case, however, there is no information on the drawl point as the developers don’t know which state will procure. Even taking the connection till the nearest sub-station is also not shared. 

The tender document states the “Central Transmission Utility (CTU) may provide the details of ISTS substation of the windy states with indicative information on the total installed transformation capacity and capacity available in MVA which can be injected/evacuated from these substations at a particular time.”

Wind sector executives said no such data had been shared till yet. Second, there was also no information on the upcoming transmission network for these wind projects, said an executive requesting anonymity. 

Some are keeping their apprehension aside, as this would help wind come at par with solar, which has been grabbing headlines and policy push, lately. Wind energy capacity has slowed down in the past three years because of heavy dependence on tax benefits.

Piyush Goyal, minister of state for coal, mines, power, and new and renewable energy, recently asked state-owned Power Grid Corporation of India to look at the third phase of green corridors for wind energy projects. 

PGCIL is also the CTU. Green corridors are an alternative transmission network for wind power projects. 

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