A government initiative to establish 1,000 MW wind power projects that will be connected to the electricity grid is expected to invigorate the renewables sector
The Ministry of New and Renewable Energy (MNRE) has formulated a scheme for setting up of 1,000 MW Central Transmission Utility (CTU) connected wind power projects to provide a framework for inter-state sale of wind power at a price determined through transparent competitive bidding process.
This will not only facilitate the non-windy states to fulfill their non-solar renewable purchase obligations (RPO), but also boost investment in the sector, thus achieving the goal of reaching 60 GW of wind power capacity by 2022, a document on draft guidelines for the sector by the MNRE states.
Hailing the move, Sunil Jain, Chief Executive Editor of Hero Future Energies, says competitive bidding is a step in the right direction. “Presently, a lot of states have not been willing to sign wind power purchase agreements, so this will open up the market for wind and we will get an extra capacity of a 1,000 MW. From the Wind Independent Power Producers Association’s (WIPPA) side, we welcome this step,” he told indiaclimatedialogue.net.
Kasturirangian, chairman of Indian Wind Power Association (IWPA), who also welcomes the move, adds, “In India, wind energy is concentrated in eight states. If these states can generate wind power and supply it to the other states, it would help a great deal.”
Emphasizing on the need for wind prices to come down, he told indiaclimatedialogue.net, “Unlike solar, the prices of wind have never reduced. In spite of incentives such as subsidies and reduced cost of import duty that go into manufacture of the windmill, their prices have only risen. In 1994, the cost of Wind Energy Generation (WEG) was INR 40 million (USD 0.6 million) per MW and now it is INR 70 million (USD 1 million). Only when the prices of windmills come down will the price of wind power price reduce. For all those in this sector who want to grow and expand, reducing the price of wind is the best bet.”
Jain reveals that at the stakeholders’ consultation meet, there were discussions on how the policy of competitive bidding can be implemented. “There have been a lot of suggestions as to what can be done. Some of them were accepted and we now await release of the revised guidelines.”
An official source in the MNRE said that the tariff policy includes competitive bidding, wherein bidding guidelines are to be issued under Section 63 of the Electricity Act. The official declined to be named.
Meanwhile, MNRE has designated Solar Energy Corporation of India as the nodal agency for implementation of the scheme and issued draft guidelines for the purpose. “The scheme will be implemented by wind project developers on a build, own and operate basis. However, the capacity may go higher than 1,000 MW, if there is higher demand from Discoms of non-windy states,” the draft states.
It further adds, “In order to facilitate transmission of wind power from these States to other States, provisions have been made in the Revised Tariff Policy published in the Gazette of India on January 28, 2016, to waive off the inter-state transmission charges and losses for inter-state sale of wind power.”
A news release stated that this will encourage competitiveness through scaling up of project sizes and introduction of efficient and transparent e-bidding and e-auctioning processes. It will also facilitate fulfillment of Non-Solar RPO requirement of non-windy states.
The official source in MNRE told indiaclimatedialogue.net that currently, most states are fulfilling RPO. The long-term trajectory, however, is that the RPO should be uniform throughout India. “The tariff policy was amended on January 28, 2016, by the Ministry of Power (MoP) in consultation with the MNRE. This will ensure that there are no inter-state transmission charges and losses. The MoP has to notify the period for which the inter-state transmission charges will be waived off.”
Emphasizing on the need for guidelines for the wind energy sector, the source in MNRE admits that it has not been done since 1995-96. “Guidelines are important when it comes to factors like decommissioning a plant. The land is taken on lease for 25 years and when it comes to decommissioning, no norms are mentioned. It is also important when it concerns issues like health and safety. If a wind turbine is installed in a residential area, factors such as the level of noise need addressed,” the official told indiaclimatedialogue.net.
There are integration issues as well. For this, standards have been revised by the Central Electricity Regulatory Commission and Central Electricity Authority and the machines will have to comply with them. Micro-siting is another aspect which has been included in the guidelines. It mentions how a turbine has to be placed across the area. As per the norms, a larger area is needed, but with improved micro siting, a lesser space with higher capacity is ensured.
Despite attempts being made to revise norms, some challenges continue to plague the sector. Jain believes that the stumbling block could be the availability of a long term open access through different corridors. “The biggest challenge is that today, the South-North Corridor is not available and majority of the wind projects/sites are in the Southern part of India. Also, right now, we have very little corridor to bring the wind from South to North. Rajasthan is also struggling with evacuation and infrastructure. So, that is the area of concern which we need to look into.”
Agreeing, Kasturirangian cites the instance of Madhya Pradesh where a 1,000 MW WEG was set up. Now, they are finding it difficult to evacuate all the energy. “The scenario was similar in Tamil Nadu from 2010-12 when windmills of capacity 1000 MW were set up and there was an inadequacy of evacuation lines. This issue needs to be addressed.”
Moreover, power from this auction is to be sold to non-windy states only, so that they can fulfill their non-solar RPO obligations. States which already have wind are anyway reluctant to buy this power, adds Jain.
Blocking wind sites
Another issue is that a lot of people have been squatting on wind sites across India for many years. “These sites have to be vacated. People have blocked power evacuation infrastructure and windy sites over the last seven to nine years and have paper allocations without doing any development work,” states Jain. The state governments, he suggests, should come out with some regulations to get these sites vacated and let them go for bidding. “For example, in Karnataka, Rajasthan and Maharashtra, if one visits their websites, the state government’s order has been released to many of the developers over the last few years. In some cases, from 2002-2003, the so-called developers have not developed these sites and not put up any wind turbines.”
This point was raised at the meeting and the government taken note of it. However, at best, they can advise the state government to cancel the orders, but ultimately, the powers lie with state governments. In case something comes through, it will help the wind sector grow faster, feels Jain.
Kasturirangian believes that yet another challenge confronting the wind industry is the inadequacy of a transmission corridor. In order to address this issue, laying of transmission lines must be done two years in advance. “Since it takes 2 years to lay these lines, planning must be done in advance and the lines should be laid at windy locations in such a way that it is connected to the consumption area. The windy area must be connected to the load area so that transmission is taken care of.”