Only a few states such as Gujarat, Maharashtra and Tamil Nadu have held wind auctions after they were initiated by the Solar Energy Corporation of India (SECI) early last year.
Bengaluru: Karnataka’s power regulator has fixed a ceiling tariff of Rs 3.45 per unit for wind auctions in the state and directed that all future purchases of wind power should be solely through competitive bidding.
Only a few states such as Gujarat, Maharashtra and Tamil Nadu have held wind auctions after they were initiated by the Solar Energy Corporation of India (SECI) early last year. Karnataka has yet to hold a wind auction and has been procuring all its wind power so far at the feed-in tariff set by the Karnataka Electricity Regulatory Commission (KERC).
The commission fixed this tariff at Rs 3.45 per unit last month, lowering it from the earlier Rs 3.74 per set last September, said the people cited above. With its recent order, KERC has ended the feed-in tariff route for acquiring wind power, and instead set the feed-in tariff as the reserve price for wind auctions.
The KERC order noted that, with 4,656 MW of commissioned wind power, the state was comfortably placed to fulfill its renewable energy purchase obligations (RPOs). The state’s renewable energy policy also envisaged adding only 975 MW of wind power per year in FY19 and FY20. It could thus afford to dispense with the feed-in tariff method of buying wind power.
“It is noted that in several states… bidding has brought down the tariff considerably to less than Rs 3.00 per unit in case of wind and solar power projects,” the order said. “Any future procurement from wind power should be based on ‘least cost procurement’ basis so that the benefit of reduced tariff goes to the consumers of the state.”
Wind tariffs dropped at each successive auction held last year, reaching a record low of Rs 2.43 per unit in a 500 MW auction conducted by Gujarat Urja Vikas Nigam Ltd (GUVNL) in December.
KERC’s order acknowledged that all states needed to contribute to the country’s effort of installing 60,000 MW of wind power by 2022 (this stood at 34,165 MW as of end-April). “But the tariff at which this energy is bought is equally important and hence competitive bidding is imperative,” it said.
Wind power tariff was the subject of a dispute between the autonomous KERC and the Karnataka government late last year. The regulator refused to endorse power purchase agreements (PPAs) the state discoms had signed at an earlier feed-in tariff of Rs 4.50 per unit (set in October 2015), once it had fixed its new tariff of Rs 3.74 per unit in September 2017, even though the PPAs were signed before KERC announced its order. KERC eventually had to accede to the government’s wishes.
Source: ET Energyworld