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India plans 6GW wind bidding in 2017/18: MNRE secretary

India wants to bring forward bidding for 6GW of wind power in the current year ending April 2018, said renewable energy secretary Rajeev Kapoor, a higher level than had been expected and a boost to the country’s burgeoning wind supply base.

Kapoor said an initial 2GW tender will be announced as soon as next month for purchase by non-windy states.

The aspiration for 6GW of fresh procurement would keep the country on track for the average installation levels it needs to hit its 60GW by 2022 target, roughly double what’s in place now, said Kapoor.

“We should be doing 6GW every year on average. We’re hitting that,” said Kapoor, replying to a question from Recharge on the sidelines of the Windergy conference in New Delhi.

But Kapoor admitted that more would be need to be done to get India’s state-run power entities to buy renewable energy, and he will press the issue of compliance with renewable purchase obligations when he meets state ministers next month.

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Indian wind industry leaders had called on the government to rapidly advance its tendering system for wind capacity to maintain the sector’s momentum as it moves from tariff-based to competitive procurement.

A debut 1GW auction earlier this year produced what Kapoor described as a "turning point" for the industry when it drove wind power prices down by about 30% to 3.46 rupees/kWh ($0.052/kWh).

Sumant Sinha, CEO of leading Indian developer ReNew Power, told Recharge: “I think it's terrific. I think it will be phenomenal if we could get that done.

“Two or three years ago we were adding only 2GW or 2.5GW a year as an industry, now ramped up to five and a half. In that context to have 6GW of bids in a single year is very welcome," said the boss of ReNew Power, which counts Goldman Sachs and the Asian Development Bank among its investors.

Sarvesh Kumar, president of the Indian Wind Turbine Manufacturers Association (IWTMA) said the government’s lead is important as India – which added a record 5.4GW in 2016/17 – moves away from feed-in tariffs and sees key incentives such as the generation based incentive (GBI) disappear.

“Somewhere the thing has to start. State governments are ready to start competitive bidding, but the government has clearly indicated to us this they want to do another bid from their side, not only so price discovery can take place but to give a boost to the states to come forward.”

Speaking before Kapoor’s presentation to the conference today, Kumar struck an optimistic note and claimed that the industry could deliver 6GW of installations in 2017/18.

Other executives were more cautious about the immediate future. 

Sinha said with the industry on “a cusp” between tariffs and tenders, and some states waiting to consider the best way forward, installations could drop back this year.

However, Sinha admitted that the Indian wind sector had consistently outperformed projections for some years “and I hope I’m proved wrong”.

Ramesh Kymal, CEO in India for turbine group Siemens Gamesa – the market-leading OEM in the country, which installed 2GW last year – said the strength of 2016/17 had been partly down to the impending disappearance of incentives.

He said policies to underpin the viability of projects such as payment guarantees and grid improvements could all help make projects more viable.

Like all the executives at Windergy, Kymal was upbeat about the long-term prospects for wind in an Indian market that is already the world’s fourth-largest, and where a growing population and economy will drive power demand up inexorably.

“The target of 60GW we could easily surpass. The sky’s the limit for wind,” said Kymal.

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