Economy

Power producers seek tweaks in tender norms for 1,000 MW Gulf of Khambhat offshore wind project

ksenia kondratieva Mumbai | Updated on May 08, 2018

Power producers and transmission companies are expected to meet Power and New & Renewable Energy Minister RK Singh in an attempt to get revised India’s first offshore wind tender, invited by the New and Renewable Energy (MNRE) in April.

The country’s first offshore wind farm will be developed at the Gulf of Khambhat, 23-40 km on the seaward side from Pipavav port, according to the global expression of interest (EoI) called by the National Institute of Wind Energy (NIWE), an autonomous body under the MNRE. The deadline for submission of EoI is May 25.

Multiple industry players recently approached the Centre with proposals to change the structure of the ambitious 1,000 MW tender, three people close to the developments told BusinessLine on conditions of anonymity.

Trimming time

While some are seeking a relaxation of compliance norms for domestic bidders, others suggest that power generation and transmission be separated in order to discover a better tariff and cut down the timeline for execution.

Independent power producers (IPP) and power transmission companies such as Renew Power, Mytrah Energy, Hero Future Energies, Adani Group, Sembcorp, GE and Sterlite Power, and large foreign players like Vestas, Enercon, Nordex and Gamesa are among those considering bidding for the project, the sources said.

Rolling out an offshore wind project of such large capacity is very challenging and poses implementation risks, one of the power producers told BusinessLine.

“Offshore wind is a new concept for India and going straight on with 1,000 MW is a very big challenge. Ideally, they should have gone for an EoI for a smaller size plant,” he said.

Global tie-ups

Another issue, he added, is that domestic bidders have to tie up with international, mainly European, companies with at least 500 MW offshore wind experience to submit their bids. On top of that, domestic bidders must have an installed capacity of least 500 MW onshore wind and at least ₹500 crore annual turnover for the past two years.

These requirements limit the competition and eventually increase the cost of power to ₹8-9 per unit, which is way higher than the tariff of ₹2.44 discovered earlier this year, industry players argue.

The current structure of the tender is another factor contributing to the higher cost of power from the proposed plant. “As per the current EoI, the power producer has to take care of evacuation and transmission. This increases risks and the cost of power. By unbundling transmission and generation, the tariff could come down by 30 per cent,” another industry player told BusinessLine.

Published on May 08, 2018

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