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Reverse auction of second tranche of 1 GW wind power projects delayed

According to reports, the reverse auction for the second tranche of 1,000 MW wind power projects, for which bids of more than 2,800 MW have already been received, will not be conducted before the second half of August, sources told FE. The auctions will now take place only after the Central Electricity Regulatory Commission (CERC) clarifies the procedure for allocation of transmission connectivity. The CERC ruling will also have a bearing on the aggression to be shown by the bidders. The government’s first wind auction held in February discovered record-low tariff of Rs 3.46 a unit, which is 17-30% lesser than the feed in tariff prices in windy states.

Clarity is lacking on transmission access related to wind projects where multiple developers have queued up for transmission connectivity for power evacuation. The issue would be heard by the CERC on August 16, the quasi-judicial body said on Thursday. If CERC rules that parties with project visibility would be prioritised while being awarded connectivity, it would mitigate the risk factor associated with the projects. The Solar Energy Corporation of India, which is conducting the bids, is learnt to have given verbal assurance to the prospective bidders that the reverse auction would be conducted only after the CERC order comes out.

Last week, renewable energy minister Piyush Goyal said he wants wind energy bids to be brought out every month. However, he added that the pace of this process should be monitored, not allowing the industry jack up (bidding) rates in the wake of higher auction frequencies. The government is looking into the option of having PPA tie-ups even before the next bids begin, Goyal said.

Sources said the renewable ministry has been suggested that tenders for subsequent bids would be opened only after the reverse auction has been executed for an ongoing bid. Not following this strategy may prevent developers from quoting lower rates. In order to achieve the target of 60,000 MW of wind energy by 2022, the country needs to add more than 6,000 MW of wind generation capacity on average, hence warranting a subsequent increase in the scale of auctions. Last week, PTC signed PPAs with developers which won tenders to build 1,050 MW of wind projects in February.

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