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Table of Contents
Wind power market to transform with competitive bidding; 25-26 GW capacities expectedto be added over next 5 years.
FiTs to taper off; contracts for under-construction wind projects likely to be renegotiated
Going forward, the erstwhile FiT regime will cease to exist given the price differential between the prices discovered via market mechanism and existing tariffs. In fact with the discovered prices for wind energy falling as low as Rs. 2.43/unit (in 500 MW wind energy auctions for GUVNL), all wind energy rich states such as Karnataka, Rajasthan, Gujarat,Andhra Pradesh, Tamil Nadu, Maharashtra and Madhya Pradesh are unlikely to continue with the FiT regime. Further the relevant stakeholder from the states electricity sectorhave conveyed almost all wind-based energy would be procured through the competitive bidding route henceforth.
With the auction route anticipated to gain traction among states from H2 FY 2018, capacity additions are expected to rise from FY 2019 onwards. In fact SECI has already tendered 3 GW of ISTS connected wind capacities over past 10 months. Further SECI has plans to allocate ~1.5-2 GW of wind capacities in March 2018. Moreover governmenthas plans to bid out ~9 GW in the coming fiscal, providing a strong pipeline for the coming years.
The Centre also expects to auction 4-5 GW each year, which will also support additions. With the wide scale adoption of the auction route, tariffs are expected to remain low, which will support off-take.Subscribe to our reports