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Suzlon likely to bag 250 MW order from Sembcorp

According to reports, as wind turbine manufacturers vie for a share of the 1,000 MW of capacity auctioned last month, the big buzz in the market is that Suzlon is likely to bag an order for 250 MW from Sembcorp.

Four companies – Sembcorp, Inox, Mytrah and Ostro Energy – won mandates to set up 250 MW each and sell the power to the government-owned Power Trading Corporation, at a tariff of Rs. 3.46 a kWhr, in the auctions put through by the Solar Energy Corporation of India (SECI), last week.

Industry sources say that Sembcorp had tied-up with Suzlon even before the bids, for the supply of wind turbines. While the deal is yet to be formalized, it is learnt that Suzlon will bag the order, following the arrangement.

Inox is a turbine manufacturer, therefore it will use its own machines. It is learnt that Mytrah and Ostro Energy are talking to many machine manufacturers, those in the forefront are GE, Vestas, Inox and Senvion.

Well-entrenched companies such as the market leader, Gamesa, ReGen Powertech and Enercon, are either unable or unwilling to sell at the prices that a low tariff of Rs. 3.46 would demand, industry sources said.

Gamesa’s Chairman and Managing Director, Ramesh Kymal, today told Business Line that the tariff of Rs.3.46, discovered through the bidding process was “an aberration that would be corrected.”

He said he expects the market to grow to 6,000 MW next year (from about 5,000 MW this year), because the market would expand as more auctioned off through the tariff-based competitive bidding route.

The wind industry also believes that the ‘generation-based incentive’ scheme, which pays 50 paise a kWhr, subject to a total payout limit of Rs. 1 crore a year to the company, will not be allowed to expire at the end of this month.

Thus, some turbine manufacturers prefer to wait till the market expands, rather than join the rat-race for business, today.

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