SunEdison wants wind tariffs competitively determined

Striking a discordant note with the rest of the wind power industry, SunEdison, a leading player in the renewable energy sector, today called for wind energy tariffs to be determined through competitive bidding process. (Today, wind energy producers get a fixed ‘feed-in tariff’ determined by each state electricity regulator—Rs 3.51 in Tamil Nadu, Rs 4.20 in Karnataka and Rs 5.92 in Madhya Pradesh.) 

“Why treat wind different than solar?” posed Pashupathy Gopalan, who heads SunEdison’s Indian operations.

SunEdison’s stand is at sharp variance with that of the others in the wind industry, who have been fighting tooth and nail to avoid competitive bidding. Leading wind industry players have been saying that any competitive bidding – as seen for ‘solar’ – might lead to maverick bids and a collapse of tariffs.

SunEdison is a leading player in solar which is currently building about 2,000 MW of projects in India. It recently made news by quoting the lowest ever tariff—Rs 4.63 a kWhr—in a NTPC tender. However, SunEdison is a marginal player in the Indian wind industry. The company has the 101.6 MW of wind assets that it acquired recently from the Spanish company, Fersa, and 51 per cent stake in another 24 MW wind farm in Rajasthan. In July, SunEdison announced that it would work with wind turbine major, Gamesa, to jointly develop wind farms in India, and then, take over the developed assets.

Today, addressing a press conference, Gopalan said that there had been no specific progress in the SunEdison-Gamesa joint development plan. He also formally confirmed the industry grapevine that SunEdison’s bid to acquire wind assets from Continuum Energy, had been terminated.

Asked in this context if SunEdison would continue to be interested in pursuing wind power development in India, Gopalan said that solar tariffs had dipped to below wind tariffs. He wondered if regulators would allow wind to continue to enjoy the same level of (high) tariffs as in the past, and noted that SunEdison itself was making more profits in wind than in solar.

If wind should continue to get fixed ‘feed-in tariffs’ then “why not give feed-in tariffs to solar as well,” Gopalan asked.

Sumant Sinha, Chairman and CEO, ReNew Power, another leading wind and solar company, said that he didn’t agree with Gopalan. “A lot of things, such as wind studies, land acquisition, clean-up of power evacuation allotments and blocking of land through ‘government orders’ need to come in place first,” he said.

“Eventually perhaps yes, but not too soon as in the interim, the market will collapse,” Sinha said.

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