The latest round of auctions for wind projects in Tamil Nadu and Gujarat – worth 1,000 MW in total – saw the lowest ever tariff of Rs. 2.64/kWh. The tariff is an impressive 23% drop from the previous lowest tariff of Rs. 3.46/kWh, which was discovered in February
The record low tariff is being attributed to the reverse auction route of price discovery, under which project developers bid for tranches of the total capacity at the lowest feasible price.
Experts question sustainability
However, experts are not convinced of the long term sustainability of the low tariffs.
Many say that wind turbine prices have not fallen enough to justify such low bids, and are instead a result of intense competition between project developers to secure contracts. They also fear that such low tariffs will eventually drive out the smaller players and leave only the developers with easy access to finance, who could in turn retail power at higher tariffs.
Study: Wind potential over oceans enough for all
Latest research says there is so much wind energy potential over oceans that it could theoretically be used to generate “civilization scale power” — assuming, that is, that we are willing to cover enormous stretches of the oceans with turbines, and can come up with ways to install and maintain them in often extreme environments.