Wind energy is the new solar in India!
In a Solar Energy Corporation of India’s (SECI) wind auction wind energy has recorded the lowest tariff at Rs.2.64 (Read). Until now Rs.3.46 was the lowest wind energy tariff in India.
As wind tariffs start to hit the bottom, it is apt to say that the wind energy is the new solar in India. In both the renewable energy segments players are aggressively trying to position themselves in India by quoting low tariffs.
But this has been more evident in solar energy sector. The reason is that solar auctions in India have been taking place since 2015 whereas the auctions of wind energy have only started in 2017. More solar auctions in comparison to wind have brought down the solar energy tariffs. But now the trend is evident in wind energy sector as well.
So how is the wind energy going to blow following these auctions?
India has targeted 100 GW capacity from solar and 60 GW from the wind by 2022. Of the 100 GW solar, 60 GW will be ground-mount projects and 40 GW will be from the rooftop solar. The government had revised the targets in 2015. Project developers offering lowest tariff would win a project.
But the level of aggression was unprecedented in the solar sector and the tariffs have come down drastically. But it might have also prepared the developers to be equally aggressive for winning wind projects. Therefore what reverse auction did to solar energy is doing the same to wind sector.
The auction size was 1000 MW and a developer had to bid on a minimum size of 250 MW. Graph shows the winners, their capacities and tariffs.
Wind projects are riskier than a solar project. Wind energy is more intermittent by nature. Still, while it took some time for solar energy to breach the tariffs despite more auctions, wind segment has breached the levels in just two auctions.
Due to high risk, equipment cost has more to do with a low wind energy tariff. But if the developers have an in-house wind forecast team, it is an another attribute of the risk mitigation. But whatever the reason be, developers are replicating the solar scenario trends in wind segment.
Some lessons in solar sector were hard learnt. Replication of aggressive bidding in wind is fine but not the mistakes.