[ exact phrase in "" • results by date ]

[ Google-powered • results by relevance ]


Add NWW headlines to your site (click here)

Get weekly updates

when your community is targeted


RSS feeds and more

Keep Wind Watch online and independent!

Donate via Paypal

Donate via Stripe

Selected Documents

All Documents

Research Links


Press Releases


Campaign Material

Photos & Graphics


Allied Groups

Wind Watch is a registered educational charity, founded in 2005.

News Watch Home

Plummeting wind tariffs raise questions of viability 

Credit:  M Ramesh | The Hindu Business Line | February 24, 2017 | www.thehindubusinessline.com ~~

What they feared, has happened.

For long, the wind turbine manufacturers have been resisting any move for auctioning wind power capacity on the basis of competitive tariff bids, fearing an intense auction room battle would hammer down the prices.

For the machine manufacturers like Suzlon, Gamesa and Inox, the customers are the wind energy companies—the ‘independent power producers’ (IPPs). If the IPPs get low prices for their electricity, pressure would be on the manufacturers to drop prices.

On Thursday, in the country’s first ever wind capacity auctions, four companies won mandates to set up 250 MW of projects each, quoting a shocking Rs 3.46 a kWhr. Six others lost in the race. But all the ten had quoted tariffs under Rs 4. The highest quote from the ten bidders was Rs 3.92 by Leap Green.

The fact that at least ten companies have been willing to sell wind power at less than Rs 4 a kWhr implies that wind tariffs are decisively declining. The winning tariff of Rs 3.46 sets a new benchmark, and will be the reference point in all future negotiations.

Until now, wind power companies has been selling power at ‘feed-in tariffs (FiT)’ determined by the various state electricity regulatory commissions (though, some also sell directly to customers at mutually agreed prices or over the power exchanges.)

At present, these tariffs are: Andhra Pradesh Rs 4.84; Gujarat Rs 4.19, Karnataka 4.50, Madhya Pradesh Rs 4.78, Maharashtra between Rs 3.82 and Rs 5.56 depending on the location, Rajasthan similarly between Rs 5.76 and Rs 6.04 and Tamil Nadu Rs 4.16. These tariffs were fixed at various points in time in the past, but they are passé.


The advent of ‘competitive bidding’, the wind industry knew, would stomp prices, but nobody expected it to go as low as Rs 3.46.

“Completely unexpected,” said Ramesh Kymal, Chairman and Managing Director of Gamesa Renewables, India’s largest wind turbine manufacturers.

He observed that unlike the solar tender earlier there is no guarantee of grid availability or payment security.

However, winners claim they are playing to their strengths. One is possession of lands. Typically, IPPs buy chunks of developed projects from turbine manufacturers. Since land and machine are bundled together, there is less competition among the manufacturers. The competition is reduced to only those manufacturers who possess lands. Companies such as GE, Vestas, Acciona, Senvion, who have good machines sell less because they do not wish to get into acquisition of land and developing it—they would rather sell their machines and leave it to the customer to do the project development himself.

As such, an IPP who has lands can get a turbine cheaper. Both Ostro and Mytrah are understood to be in possession of lands—in Gujarat and Tamil Nadu, respectively.

One source said that while there is no promise of grid uptime or prompt payment of dues, these are no issues. The projects connect to the central grid, owned by the public sector PGCIL, which is up all the time. Likewise, the power purchaser is another government company, PTC, a credible and solvent customer.

Turbine manufacturers fear that state governments will follow the example of this tender and scrap the system of fixed FiTs. However, an industry expert, who did not wish to be named, said that the turbine manufacturers ought not to be worried about their margins shrinking, because what they might lose in margins, they will make up in volumes.

Competitive bidding expands the market. Today, the wind market comprises only eight windy states. PTC, buy purchasing wind power from developers in these states and selling it to, say, Bihar or Haryana, opens up new markets. Further, falling tariffs would attract more customers and state-owned electricity distribution companies, even in the eight windy states, will buy more.

Source:  M Ramesh | The Hindu Business Line | February 24, 2017 | www.thehindubusinessline.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

Wind Watch relies entirely
on User Funding
   Donate via Paypal
(via Paypal)
Donate via Stripe
(via Stripe)


e-mail X FB LI M TG TS G Share

News Watch Home

Get the Facts
© National Wind Watch, Inc.
Use of copyrighted material adheres to Fair Use.
"Wind Watch" is a registered trademark.


Wind Watch on X Wind Watch on Facebook Wind Watch on Linked In

Wind Watch on Mastodon Wind Watch on Truth Social

Wind Watch on Gab Wind Watch on Bluesky