56 Gw of wind power projects on offer without reverse bidding

The Centre will offer 56 Gw of wind power projects over the coming seven years under the new auction regime, which will have no reverse bidding.

Every year, 8 Gw of projects would be offered in a bundle for the eight windy states in the country, said a notice by the new and renewable energy ministry (MNRE).

“In order to ensure that wind energy capacity comes up in all the eight windy states, every bid will be a composite bid consisting of state-specific sub-bids for each of the eight states. The power generated from capacity established in each of the state sub-bids will be pooled and offered at pooled tariff to all procurers,” said the notice.

The bids will be on a single stage two envelope closed bid basis with one containing technical bid and other financial bid.

In five years of introducing it, the Centre in July decided to abolish reverse auction bidding in the wind energy sector, citing that the industry has long demanded for the same. Since 2017, the growth of wind energy in the country fell to nil compared to a double-digit growth every year during the last decade. 

Business Standard reported that the ministry was mulling a closed bidding, which will have several wind projects from several states bundled together. The lowest tariff or L1 would be averaged for these states. The power from these projects would be bundled and sold by SECI. 

In 2017, the central government had introduced a competitive bidding mode of awarding projects in the wind power sector. The sector worked under the ‘feed-in-tariff’ (FiT) regime till then, which means the power price would be in accordance with the cost of the project. It was done to introduce more competition and reduce wind power cost. In the first auction, the price fell to Rs 3.46 per unit from the prevailing Rs 5-6 per unit.

During 2018-19, 742 Mw of wind projects were commissioned. This is when the Centre tendered out close to 7,000 Mw of wind power projects in the past two years. Wind projects installation was record high of 5,000 Mw in 2016-17, a year before bidding was introduced. 

Several wind turbine makers facing unsold inventory laid off employees and shut down factory floors. Unlike solar, which is largely dependent on imports, wind manufacturing is domestic with even global players setting up manufacturing and/or assembly units in India.