Finance, Other, Wind

Get ready to offer discounts, Rajasthan tells wind energy developers

According to reports, Rajasthan is asking wind power producers to put up 300 MW of fresh capacity and sell the power generated at rates determined by competitive bidding.

This is bound to rub producers the wrong way as they have been opposing award of projects on the basis of tariffs determined through bidding.

The Indian wind industry is used to fixed tariffs, usually arrived at by the respective State electricity regulators after hearing both stakeholders — those who generate and those who buy.

Rajasthan seeks to determine tariffs through a ‘reverse bidding process’—that is, first fix a base rate and ask bidders to offer discounts on it. The Rajasthan Renewable Energy Corporation will sign ‘power purchase agreements’ with those generators who quote the lowest tariff.

The benchmark rate has been fixed at Rs 4.89 a kWhr (unit) for projects set up in Jaisalmer, Jodhpur and Barmer and Rs 5.13 for those in other districts.

The bidder (or its parent or affiliate) should have already set up at least 100 MW of wind power capacity anywhere to be eligible to participate.

The tender documents are clear that the successful bidders will get only the contracted tariffs; they will not be eligible for market tradable renewable energy certificates.

Rajasthan will award not less than 10 MW and not more than 120 MW to a single bidder.

Projects can come up in one or more locations, but only within the State .

In its Wind Policy 2012, which it unveiled in July, the Government said that it would promote setting up of 300 MW, 400 MW and 500 MW in the years starting 2013.

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