SECI's 1,200 MW Wind Energy Sale Receives Lukewarm Response

Solar Energy Corporation of India’s (SECI) 1,200 MW wind auction witnessed a remarkably tepid response from developers, with techno-commercial bids of only 600 MW received. SECI confirmed the development.

Most SECI auctions are typically oversubscribed. Its last wind auction of 1200 MW in mid-February, for example, drew bids of practically twice the amount.

Some developers appealed that SECI’s enduring practice of setting a ‘ceiling tariff’ was the cause. This time the ceiling tariff was set at Rs 2.83 per unit. Projects can be set up anywhere across the country.

“The only state where such a low tariff is feasible is Gujarat,” said a wind developer who did not want to be named. “Perhaps only developers who already have land in Gujarat have submitted bids.” Gujarat has some of the best wind energy producing sites in the country, where wind speeds are very high.

Others accused the insistent problems of availability of land and transmission facilities. The most attractive state, Gujarat, for instance, has been unwilling to provide land for projects bid out by central agencies, doing so only for state sanctioned projects. It has no doubt recently released a land policy for renewable energy projects, which spells out how central projects can also get land, but there is much uncertainty on how the allotments will actually be made.

Government sources, though, noted that Rs 2.82-2.83 per unit were the winning bids in the February auction, and thus setting the ceiling tariff at Rs 2.83 per unit this time was by no means unreasonable. But industry insiders persisted that with the areas with the best wind speeds already taken up or hard to get (as in Gujarat), the ceiling tariff was unrealistic.

“We have not taken any decision yet on whether we will issue this tender again or not,” said a senior SECI official.