July 2017

Editor Dolly Khattar

wind power segment is going through an exciting phase as is evident from the ongoing developments. In response to the second tender issued by the Solar Energy Corporation of India (SECI), it has received bids for three times the 1 GW of grid-linked capacity on offer. This suggests that wind power tariffs may fall to under Rs 3.30 per kWh, even lower than the Rs 3.36 per kWh tariff achieved in the first auction.

As SECI gears up to conduct the financial bid round of the 1 GW tender, and other states including Tamil Nadu, Gujarat, Andhra Pradesh and Madhya Pradesh get ready to conduct their respective wind project auctions, Rajasthan has come out with a surprise announcement. At a time when most states are moving away from feed-in tariffs to competitive bidding, Rajasthan has chosen to buck the trend. The state’s electricity regulator has released levellised generic tariffs for wind power projects to be commissioned in 2017-18. These tariffs are Rs 5.26-Rs 5.52 per kWh without accelerated depreciation (AD) and Rs 4.87-
Rs 5.12 per kWh with AD. This raises doubts about the state government’s intention to shift to a competitive bidding regime. If it does not, at this tariff level, the state nodal agency will be inundated with project proposals from across the developer community.

In yet another significant development, after over two months of renewable energy certificate (REC) trading drama in the courtrooms, the Supreme Court has issued an order allowing resumption of wind REC trading. The issue first arose when the Central Electricity Regulatory Commission (CERC) issued new forbearance and floor prices for RECs. Post this, many REC generators filed petitions citing losses due to the exclusion of the vintage  multiplier mechanism in the new prices. The petitioners first approached the Appellate Tribunal of Electricity (APTEL) to suggest a way to clear the existing REC stock. While APTEL agreed to introduce the vintage multiplier, it refused to impose a stay on trading,
which led the petitioners approaching the Supreme Court. The Supreme Court imposed a stay on REC trading and the new prices introduced by the CERC. The issue has finally been resolved with the appellate court stating that there should be no problem if wind RECs were to be traded at the figures given previously.

This is welcome news for all the stakeholders involved. However, the stay on solar REC trading remains in place, and the hearing on that matter will be held in due course.

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