Wind power projects' auction in Gujarat: Tariff tumbles to Rs 2.43 per unit

Actis Energy fund-backed Sprng Energy quoted the lowest bid

In the long-pending tender issued by the Gujarat government for wind power projects discovered a new low tariff of Rs 2.43 per unit. Leading players, including Actis Energy fund-backed Sprng Energy quoted Rs 2.43/unit, French electric company ENGIE, UK’s EDF Energy, Gujarat based K P Energy and Powerica Limited, which quoted Rs 2.44/unit for different capacities, were declared winners. 

Gurgaon-based ReNew Power quoted Rs 2.45 per unit as the winning bid for 200 MW but will get 17.9 Mw as the bidding follows bucket fill method. Sprng was allocated 197 Mw. Capacity of 75 Mw was kept aside for a public sector utility to build at the lowest quoted price. If the PSU's capacity declines, ReNew will get that additional capacity, officials said.

This is the fourth round of auction held for wind power projects, since February this year when the Centre introduced bidding in the wind sector. The first tender of 1,000 Mw by state-owned SECI witnessed tariff of Rs 3.46/unit, much lower than the prevailing feed-in tariff of Rs 5 per unit in the wind sector. It fell further to Rs 2.64 in second bidding held in October. In August, Tamil Nadu hosted the first state-level bidding for 500 Mw of wind power projects wherein tariff discovered was Rs 3.42/unit. 

The current government has retired the feed-in-tariff regime in the wind sector to introduce more competition and bring down prices. Aiming at an ambitious target, the ministry of new and renewable energy plans to auction wind power projects every month. However, it will strictly monitor the bid prices to keep them in affordable levels, ministry officials said.

To facilitate successful leap to bidding method, the Centre recently also notified wind bidding guidelines. As per Sections 62 and 63 of the Electricity Act, states cannot call for bidding of power projects if the Centre has not set any bidding guideline.

The bidding in Gujarat was thereby embroiled in legal tussle as wind power developers moved the High Court challenging the state’s move to call for bidding without any guidelines.