Power Ministry issues guidelines for tariff-based wind power auction

The power ministry has issued guidelines for transparent procurement of wind power through tariff-based competitive bidding in a bid to boost the clean source of energy.

The government has already auctioned 2 GW wind capacity so for in the first and second round this year. In the third round, it has floated tender for another 2 GW capacity last week.

The norms are significant because the government had decided to put for bidding 10 GW wind capacities each in 2018 -19 and 2019-20 to meet the target of 60 GW by 2022. At present, wind power installed capacity is 32 GW.

The government has issued guidelines under Section 63 of the Electricity Act, 2003, providing a framework for procurement of wind power through a transparent process of bidding including standardisation of the process and defining of roles and responsibilities of various stakeholders, a power ministry statement said today.

According to the the statement, these guidelines aim to enable the distribution licensees to procure wind power at competitive rates in a cost-effective manner.

It said the guidelines are applicable for procurement of wind power from grid-connected wind power projects (WPP) having individual size of 5 MW and above at one site with minimum bid capacity of 25 MW for intra-state projects.

Besides, it will also cover individual size of 50 MW and above at one site with minimum bid capacity of 50 MW for inter-state projects.

The key components the guidelines include compensation for grid unavailability and backing-down, robust payment security mechanism, standardisation of bidding process, risk- sharing framework between various stakeholders through provisions like change in law, force majeure, measures in case of default of procurer as also by generator.

The ministry said these guidelines will give boost to the wind power sector as it would facilitate the windy states to go for bidding process for procurement of wind power themselves.

After transition of tariff regime from feed in tariffs to bidding route, it was mainly the central government bids through SECI (Solar Energy Corporation of India), which were helping the sector. State bids from Tamil Nadu and Gujarat had objections from the wind sector in absence of guidelines, it added.

The ministry further said, “In view of very competitive tariffs of Rs 2.64 per unit discovered through the SECI’s second bid, the availability of these guidelines for states, the wind power sector is poised for a strong growth path towards achievement of 60 GW by 2022.”

Commenting on guidelines, Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings, said, “The payment security approved in the new bidding guidelines has not been seen in PPAs signed by the state distribution utilities (discoms) with wind power developers in the past.

“This along with the measures on compensation for grid curtailment and termination payments, if implemented, is favourable for the wind power developers and improves the bankability of the PPA document.”

Source: PTI


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