Wind turbine manufactured by Suzlon Energy Ltd. operates beyond an electricity pylon at the Ostro Energy Pvt. Dewas Wind Project in Dewas, Madhya Pradesh. (Photographer: Dhiraj Singh/Bloomberg)

India To Issue Guidelines Allowing States To Conduct Wind Power Auction

The Ministry of New and Renewable Energy is likely to soon issue guidelines for states to participate in wind power auctions, according to a senior ministry official told BloombergQuint on the condition of anonymity.

The government’s decision comes after the Indian Wind Energy Association approached the Supreme Court to restrain Gujarat from holding its first wind energy auction on Nov. 1. The association may withdraw its petition once the new guidelines are in place, the official said. These will be in line with auctions conducted by the Centre, the official said.

According to the agenda document of the recently concluded conference of power ministers of states and Union Territories, also said wind bidding guidelines are likely to be issued by the Centre to enable states to bids for wind power projects.

Seeking Legal Intervention

In its petition, the Indian Wind Energy Association had alleged that the 500 MW wind energy auction proposed by the Gujarat power utility, Gujarat Urja Vikas Nigam Ltd., was contrary to law since the Centre is yet to issue guidelines on the same. This is required by Section 62 of the Electricity Act, 2003, and Section 6.4 (2) of the National Tariff Policy, 2016. The petition was admitted by the Supreme Court on Dec. 4.

The association approached the apex court after the Gujarat High Court quashed a similar plea and allowed the state to hold it’s first wind auction.

The Indian Wind Energy Association also filed a similar petition in Tamil Nadu High Court after Tamil Nadu Generation & Distribution Co ( TangedCo) invited bids for 500 MW in May but the petition was later withdrawn.

Tamil Nadu and Gujarat government announced reverse bidding on their own terms without waiting for the Centre’s guidelines, K Kasthurirangaian, chairman of the Indian Wind Power Association told BloombergQuint. “Because of reverse bidding, wind energy tariffs have fallen. Manufacturers have stopped manufacturing machines because we can't reduce the price so much. Half a dozen wind machine manufacturers have halted productions," he added.

The association is seeking aligning of the state and central government auction guidelines, Kasthurirangaian said.

India added nearly 5.5 GW of wind power in 2016-17. Wind power tariffs touched the lowest of Rs 2.64 per unit in the last auction conducted in October. The present wind power installed capacity in the country is around 32.5 GW which is nearly 55 percent of the total renewable installed power generation capacity. The government has set an ambitious target of 175 GW of renewable power capacity by 2022 of which 60 GW will come from wind.