According to reports, in the country’s first competitive bidding for wind power projects, developers have overwhelmingly chosen Tamil Nadu to set up their units.
Thirteen wind power producers have bid for a total capacity of 2,644 MW. The bidders specify the State where they intend to put up their projects.
Eleven bidders have said they would set up projects in Tamil Nadu, and the total capacity of Tamil Nadu bids adds up to 1,794 MW.
The winners will be chosen on the basis of the tariffs. Those who offer to sell their power the cheapest will get to sign power purchase agreements with the Solar Energy Corporation of India (SECI), the Central government agency organising the bidding.
SECI, in turn, will enter into back-to-back power sale agreements with electricity distribution companies of various State governments. The tariff bids will be opened in about three weeks. Experts expect the tariffs to be around ₹4.5 a kWhr.
This is the first time that such an exercise has been organised in the country. Up until now, the tariff (called ‘feed-in tariff’ or FiT) that wind power companies get was decided by the respective electricity regulatory commission of the State.
Power companies could also set up wind projects and sell electricity to third parties with tariffs agreed to bilaterally. Unlike in the case of solar, tariffs have never been arrived at through a competitive bidding process.
The wind industry has until now resisted competitive bidding, fearing that it would become the norm and bring down tariffs. Rajasthan first spoke of bringing in bidding, but it never happened.
In July 2016, the Ministry of New and Renewable Energy brought out ‘draft guidelines’ for the bidding scheme, kicking off the process that culminated in the submission of bids on Monday. Now, there is talk of other States, notably Rajasthan, following suit.