Wind power prices have crashed to ₹3.82 a kWhr, and were still falling in the auctions at the time of going to print.

The country’s first ever auction of wind power capacity, determined by who offers to sell the power at the cheapest prices, is currently underway. The competitive bidding for a total capacity of 1,000 MW is being put through by the government-owned Solar Energy Corporation of India (SECI).

On January 10, 13 wind power companies had disclosed to SECI the capacity they wished set up and in which State they would do so (January 10 was the last date for the submission.)

The list included wind turbine manufacturers, Gamesa, ReGen Powertech and Inox, and wind ‘independent power producers’ such as ReNew Power, Hero Future Energies and Ostro Energy.

SECI received bids for 2,644 MW of capacity, against the offer of 1,000 MW.

Today, these companies are competing among themselves, each trying to out-bid the others by offering to sell power at lower tariffs. Hero Future, Inox, ReNew and Gamesa were among those that were still in the race at the time of going to print.

According to sources in these companies, by late evening of Thursday, the bids had gone way below ₹4 and bidders were quoting ₹3.82.

Power companies sell electricity to their customers either at prices fixed by the respective state electricity regulatory commission, or at prices determined by the market. Prices fixed by the regulatory commissions are called feed-in tariffs (FiT).

Market prices are discovered in many ways — bilaterally agreed, or determined by demand and supply in the energy exchanges or through a competitive bidding process.

Price discovery through competitive bidding has been common in the solar industry, but never in wind. This is the first time wind tariffs are bubbling up in an auction room.

This comes barely two weeks after solar tariffs similarly crashed – to ₹3.29 a kWhr, averaged over 25 years, in another auction.

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