Karnataka Electricity Regulatory Commission (KERC) has decided to continue with the wind tariff it had determined for the last fiscal. The generic tariff will be INR 3.26 per unit. The original order was issued on 27th February 2019. The latest order on the wind tariff will be applicable from 1st April 2020 to 31st July 2021.
KERC has also mandated the procurement of wind power through competitive e-reverse bidding. Many states are gradually doing away with the generic/feed-in tariff for renewable projects. Renewable energy tariffs discovered via bidding methods are much more competitive to generic tariffs. The commission will, however, determine the generic tariff from time to time which will act as ceiling tariff for reverse bidding. The lowest wind energy tariff discovered through competitive bidding in India is INR 2.43 which is still lower than the lowest solar tariff of INR 2.44. Still, solar tariffs have been more competitive to wind as they have been consistently on the lower side- much lesser than INR 3 per unit. On the other hand, the tariffs for wind power plants have often been considerably over and above INR 3. Their tariffs have been in a range of INR 2.43-INR 3.46.
Low Wind Tariffs Can Help State DISCOMS In Reducing Their Power Purchase Cost
Ceiling wind tariff to INR 3.26 per unit will still help the Karnataka Discoms. The Average Power Purchase Cost (APPC) for the state is INR 3.50 per unit. By procuring more wind energy to meet its energy demand the state will be able to lower its APPC. APPC is calculated on Non-RE power procured. By increasing their dependency on RE sources and going by the merit order dispatch, the state DISCOMS can skim out the power sources offering energy at lower rates.
As of January 2020, Karnataka has installed 4819.34 MW wind power plants. This is less than 50% of the net allotted capacity. During FY19 and FY20 the state could install only 86.50 MW and 58.50 MW of wind power. Till the time the state initiates and invites bids for setting up wind power plants generic tariff for wind will continue to be INR 3.26 per unit.
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