Bring back feed-in tariff to fully tap potential of wind power

With a potential to add about 8,000 MW to 10,000 MW annually, India managed to add about 1,750 MW last year, due to implementation challenges and regulatory issues, according to a senior executive engaged in the wind energy sector.

Backing the Solar Energy Corporation and State discoms’ move to encourage new projects, the wind power generation sector is keen that certain regulatory tweaks and policy changes need to be put in place to accelerate growth. The country’s installed capacity is pegged at 34.4 GW as on July 2018.

Ramesh Kymal, Chairman CII-SR Power, Renewable Energy & Infrastructure Subcommittee, told BusinessLine the government should consider offering ‘feed-in tariffs’ as it had done till 2017. “This paved way for price discovery through the competitive bidding process,” he said.

“From an industry perspective, for the long-term growth of the wind energy sector, we believe that the feed-in tariff regime with an average projected price augurs well,” Kymal, CEO, Siemens Gamesa India, said.

With wind speeds varying from one State to another, traditionally Tamil Nadu and Gujarat are most sought after for wind power generation. However, there is potential for wind power in other States such as Andhra Pradesh, Karnataka, Madhya Pradesh and Maharashtra.

From February 2018, when SECI auctions were offered, tariffs came down and all the bids have been for TN and Gujarat with all the capacity of 6,500 MW in two States, leaving others without any fresh orders.

“This has also made it tough for MSMEs to be a part of the auction process and the growth has been skewed in favour of a couple of States, while we could develop in more States, given the huge potential,” Kymal explained.

PPA sanctity

One of the issues that the wind power sector and the CII are seeking to ensure is the sanctity of power purchase agreements (PPAs) be honoured at any cost as any violation has adverse impact on developers, investors and financial institutions.

The CII is keen that the auctions could have enabling provisions to allow small investors to participate in the bidding process as this would facilitate investments coming from domestic investor with long-term commitment.

The industry is in favour of closed bidding process instead of reverse bidding as there are many parameters that vary between wind and solar sectors. In solar sector, the reverse bidding has been successful.

Referring to manufacturing in the wind sector, Kymal explained that bout 85 per cent of wind turbines and components are manufactured in India, unlike solar components that are being imported without conforming to any quality standards.

With substantial manufacturing capacity both for wind turbine and generator (WTG) and components, policy support is required to encourage more export by way of interest subventions, reduced freight charges through bilateral and multilateral agreements.

While stating that Green Corridors have helped transmission related concerns, issues relating to inter-State transmission charges continue to create problems for the sector and need to be sorted out, he said.

Source: The Hindu Business Line