Green power hits record low prices with auction of 1000 MW Wind projects

India's goal for renewable energy production in 2020 is 175 GW

The Dollar Business Bureau 

The government's commitment to augment commercial production and use of renewable energy has, for the second time brought cheer, as wind power tariffs fall to record lows of Rs. 3.46 per unit. So far, prices have ranged in the 3.9 - 5.9 bracket. 

As many as five bidders quoted all-time-low prices in a fierce auction held by government body Solar Energy Corporation of India (SECI). A capacity of 1,000 MW was auctioned on February 24, 2017. 

This is in line with the Centre's promise to increase by approximately five times, India's renewable energy production to 175 GW by 2020. The target for wind energy is pegged at 60 GW by 2020. To combat climate change and cut India's green house emissions, it is necessary to reduce dependence on traditional coal-intensive means of power generation. This is only commercially viable if prices of renewable energy, hitherto very high when compared to thermal power, become competitive. 

Transparency in auction has brought about this much-required drop in clean energy prices, both in solar and wind energy. Earlier, prices of solar power also hit record lows of Rs. 2.97 per unit. Gradually falling prices have been facilitated by a parallel drop in prices of solar power modules and wind turbines over the last five years. While solar modules have experienced 80% cost-cut in this period, wind turbines boast a 20% cut. 

Three bidders won 250 MW capacity each, namely, Inox Wind Infrastructure, Ostro Kutch Wind, Mytrah Energy. Green Infra Wind Energy won another 249.9 MW and another 50 MW was bagged by Adani Green Energy. 

This marks some progress in compliance with the Paris climate accord, a historic agreement that binds the international community in a measurable effort towards reduction of global warming. It was signed by 194 countries and ratified by 132 in 2016. 

The Dollar Business Bureau - Feb 27, 2017 12:00 IST