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Ministry wants competitive bidding for procurement of renewable energy

31 Dec 2012 Evaluate

Similar to the case of conventional power, the ministry of new and renewable energy wants to make procurement of electricity from renewable sources also via competitive bidding process. The Ministry has formulated the guidelines and standard bidding documents for tariff-based competitive bidding process for grid connected renewable energy power projects and has recommended them to the ministry of power for notification.

As per the ministry, the provisions of these guidelines would be compulsory for electricity distribution companies and any deviation from the guidelines would have to be got approved by the respective state electricity regulatory commission. The procurement of power from solar sources is already under competitive bidding.

However, wind industry has opposed these guidelines. Secretary of the Indian Wind Turbine Manufacturer’s Association D V Giri said that it is not the good time to bring in competitive bidding for the wind industry and the association has sent a petition to MNRE to seek removal of the applicability of the guidelines to the wind industry. While, Tamil Nadu Spinning Mills Association, whose members own about 3,000 MW of wind power capacity, has also opposed the guidelines. According to the Tamil Nadu association, wind power tariff cannot be determined on competitive bidding basis.

The Indian wind industry is already in trouble and its two major incentives like generation-based incentive and accelerated depreciation have been withdrawn from the beginning of the year. The industry is further suffering from non-settlement of dues by the state’s distribution company, TANGEDCO and non availability of the grid during windy periods. Due to these issues, the wind power addition in 2012-13 is expected to be about half of last year’s 3,170 MW.

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