Wind Energy

Developers fear states seeking low tariffs may backtrack on PPAs signed earlier

Renewable revolution is ‘imminent’, but what’s ailing India’s wind energy sector?

  • One of India’s fastest growing sectors has come down crashing
  • Only around 250-odd MW added in 2017 Q1
  • Experts blame govt’s auction route for declining capacity addition

The booming Indian wind energy industry – which added 5,400 MW last year – has come down crashing. Only around 250-odd MW was added in the first quarter of 2017. The sector is ‘in a mess’.

Industry experts blame the government’s decision to move to the auction route for the slump. Previously, power distribution companies (DISCOMS) would sign PPAs at predetrmined rates and offer a feed-in tariff with wind power developers. Under the new auction policy, developers fear the falling tariffs may cause DISCOMS to backtrack on their PPAs.

Without PPAs, the developers would have no one to sell power to, while the cashstrapped DISCOMS look for the lowest rates possible.

The crisis could jeopardise the target of 60 GW of wind power by 2022. With 32 GW currently installed, the sector needs to add 6 GW to the grid annually. This year, however, only 2 GW has been added.

Tamil Nadu, Gujarat, Andhra Pradesh and Rajasthan – which have planned to hold auctions – are yet to do so because of the lack of guidelines from the Central Electricity Regulatory Commission (CERC).

Renewable revolution imminent

Meanwhile, new research has shown that wind power costs could drop by a further 50%, while solar PV could provide 50% of global power by 2050.

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