ICRA Ratings today said the wind power capacity addition will improve to 3 GW this fiscal, backed by project awards by Solar Energy Corporation of India (SECI) and state utilities.
“The capacity addition in the wind power sector is expected to improve to about 3 GW in FY2019, backed by the project awards by the SECI and state distribution utilities since February 2017,” said Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings in a statement.
Majumdar further said the SECI and the distribution utilities in Gujarat, Maharashtra and Tamil Nadu have issued bids for wind-power capacity of 7.5 GW over the past 14 months. This capacity is expected to be commissioned over the next 6-18 months, which would support capacity addition in FY2019 and FY2020.
The Ministry of New and Renewable Energy (MNRE) announced the trajectory for award of wind power projects through competitive bidding to achieve the cumulative wind capacity target of 60 GW by FY2022.
In line with this target, bids for about 20 GW wind-based capacity are proposed to be awarded over FY2019 and FY2020. This bidding programme, if implemented in a timely manner, provides a visibility to support the capacity addition over next four-year period, it added.
PPAs
The timely completion of project awards and subsequent signing of both power purchase agreements (PPAs) by the SECI and back to back power sale agreements (PSAs) with state-owned distribution utilities is required, ICRA said, adding that in this context, the willingness to participate and sign PSAs by discoms especially in states with limited wind energy potential remains critical.
The wind energy sector witnessed a capacity addition of only 1.7 GW in FY2018, which is a significant drop from the 5.5 GW capacity added in FY2017.
“This was driven by a transition from the existing feed-in tariff-based PPA regime to a competitive bid-based PPA regime in the wind energy sector, following the large reduction in tariffs discovered through the competitive bidding route against the earlier feed-in tariff regime,” the report said.