Wind power auction for 1 GW capacities postponed to October 4

The government has decided to postpone second wind power auction for 1 GW capacities which was scheduled for September 19 to October 4 in view of some issues about transmission connectivity between states, an industry source said on Friday.

Certain bidders and developers are grappling with the issue of inter state transmission connectivity.

"The government is waiting for a Central Electricity Regulatory Commission (CERC) clarification on inter state power transmission connectivity," the source said.

"Therefore, the wind power auction for 1 GW scheduled on September 19, has been postponed to October 4," he said.

The Solar Energy Corporation of India (SECI), which is nodal agency for conducting this auction, has informed developers about this decision.

According to the tender, one of the conditions in the bid is to have connectivity with Inter State Transmission System (ISTS). The responsibility to get connectivity is with the bidders.

The CERC has reserved its order on the petition, after hearing all the inputs pertaining to the relief sought.

The renewable energy players had sought immediate relief pertaining to connectivity for successful bidders for first wind power auction conduced earlier this year.

The developers had also pleaded for providing long term solution for issue of squatting over the infrastructure in terms of bay space in ISTS substation.

The issue came up before the CERC after the central transmission utility, Power Grid Corp, filed a case for preventing underutilisation of bays for connectivity granted to Wind/Solar generation projects.

In February, tariffs had dropped to all time low of Rs 3.46 per unit in India's first-ever auction for wind energy projects. The auction was conducted by the SECI.

For the second auction of 1 GW capacities, the SECI is the nodal agency for calling tariff based competitive bids to award 1 GW capacities.

The SECI had informed all prospective bidders on September 11, 2017 about E-reverse auction for 1 GW wind capacities on September 19, 2017.

The investors and renewable energy players had pleaded before the SECI and Ministry of New and Renewable Energy (MNRE) for postponing the second wind bid till a final order from the CERC is received.

Industry believes that inviting bidders for E-reverse auction without any resolution on the current petition may not attract active participation during E-reverse auction and would be against principle of fair competition

In absence of the clear direction on this issue, those entities already having connectivity will only be able to participate in the second bid, scheduled for September 19, 2017.

According to industry sources, there are few players who meet this condition. With total bid capacity of 1000 MW available and single bid of maximum 250 MW is allowed from a bidder, there would be minimum 4 entities that would be successful.

Thus with fewer bidders, the fair competition and expected price discovery may not be possible. Also, this is creating entry barrier for new players.