February 24, 2017
India

Wind turbine makers ask players to avoid bold bids

Sanjay Dutta | TNN | Feb 24, 2017 | timesofindia.indiatimes.com

NEW DELHI: The umbrella body of wind turbine manufacturers on Thursday advised major players and prospective bidders to avoid bidding “aggressively” in the country’s first auction of wind power projects, a move being seen as anti-competition and potentially encouraging cartelisation.

The advisory from the Indian Wind Turbine Manufacturers Association, sent hours before bidding for wind projects aggregating 1,000MW capacity began, cautioned bidders of “uncertainties”, especially the impact of GST.

The e-auction began with nine out of 12 bidders qualifying for bidding. The lowest bid in the qualifying round came in at Rs 4 per unit. During Thursday’s bidding, this level was breached at Rs 3.79 per unit till the time of filing this report. The second-lowest tariff stood at Rs 3.81 per unit. “As we all know, there seems to be a big risk on the GST front, and various estimates can put this anywhere between 5% to 12%… In case GST is pegged at 12%, then the project cost can increase anywhere between Rs 15-25 lakh per MW ,” IWTMA secretarygeneral D V Giri said in an email sent to major players, including Suzlon, Gamesa, GE, Reliance ADAG, Tata Power and Renew Power.

But executives of Solar Energy Corporation of India, the entity under the power ministry implementing the solar project, said any impact of GST is allowed to be passed on to consumers under the provisions of “change in law” in the tariff policy.

They also said there was complete fairness and transparency in the auction. On his part, Giri told TOI the advisory was not against competition but merely highlight ing industry’s concerns. But the content of the advisory reads otherwise. According to the advisory , the market for feed-in tariff (akin to a cashback scheme) available in various states may get destabilised.

Asking promoters to take a cue from recent bidding for solar projects, where the firstyear tariff slumped to Rs 3.30 per unit, the advisory raises the prospect of promoters unable to execute projects at a later stage in case of the quoted tariff being too low.

URL to article:  https://www.wind-watch.org/news/2017/02/24/wind-turbine-makers-ask-players-to-avoid-bold-bids/