Bids dry up in successive Indian wind auctions

At a time when India is being hugely criticized for its continued support of cheap and dirty coal power plants, its failure to tempt international bidders to take up the next slice of wind power has to be seen as disastrous.

It has experienced a shortfall in its VII auction for wind project developers for 1.2 GW of capacity, finding that only 4 successful applicants could live with its maximum price of $0.04 per KWh. The story broke in trade title Mercom India, which said that in all, bids totaling 600 MW were submitted against a tendered capacity of 1,200 MW. Engie bid for 200 MW, Sprng Energy bid for 100 MW; ReNew Power bid for 50 MW and Adani Green Energy for 250 MW.”

The auction was being run by the Solar Energy Corporation of India’s (SECI) for ISTS-connected wind power projects on a pan-India basis under tranche-VII. If India is overaggressive on price and runs too many successive auctions, it may find that local developers have insufficient appetite and will need help from largely international bidders.

There are a succession of bid deadlines being extended as you go through successive projects run by SECI. Just a few days earlier one had to be extended for the setting up of 3 GW of solar capacity, in a contract tied to a local plant being built with a panel capacity of 1.5 GW per annum.

It is ironic that an earlier similar slice of these wind auctions were oversubscribed by a massive 1,125 MW, with bids totaling 2,325 MW being submitted by a total of nine participants with some bidding below, rather than on, the tariff cap.

Local sources said this was because the best wind sites have been already taken in earlier auctions, so finding new sites is getting tougher. Also companies that engaged in the first auction are finding it’s tough to generate the power that was anticipated. This in turn is pushing developers to costlier,  but more experienced, foreign equipment suppliers.

The SECI has already announced another tender for 1.8 GW of wind power projects under Tranche-VIII in India and it may have to ensure that overseas players are enticed to enter this auction.

ReNew Power is the developer that leads in Indian wind auctions having secured over 1.8 GW in energy auctions with an average win of just over 300 megawatts but this this auction it only for 50 MW.

In earlier rounds other bidders included Mytrah Energy, Alfanar Energy, Continuum Energy, Hero Future Energies, and SB Energy but these decided not to enter this time.