Viability, implementation risks constrain outlook for wind energy sector; capacity addition to rise to 16 GW by 2023: Crisil
State auctioning slowed as several states signed PSAs with PTC and SECI to procure wind energy under the schemes auctioned by them, to help fulfil their non-solar renewable purchase obligations targets.
The shift to a competitive bidding mechanism has slowed industry growth due to a significant fall in tariffs
Capacity additions will primarily be driven by Central government allocations
Moving to competitive bidding mechanism in the wind energy sector has caused a slowdown in capacity addition
New Delhi: The country's wind energy sector is likely to see a slow growth with regard to capacity addition over the next five years, CRISIL Research said on Wednesday.
The shift to a competitive bidding mechanism has slowed industry growth due to a significant fall in tariffs, triggering a decline in both bid response and profitability for original equipment manufacturers (OEMs), CRISIL Research said in a statement.
It said capacity addition is expected to rise by 14 to 16 GW over fiscal 2019 to 2023, entailing investments of Rs 1,10,000 crore.
Capacity additions will primarily be driven by Central government allocations with relatively stronger counterparties like Solar Energy Corporation of India (SECI) and PTC, reducing risk as compared to direct exposure to state discoms, the statement said.
State auctioning, on the other hand, has slowed as several states have signed power supply agreements (PSAs) with PTC and SECI to procure wind power under the schemes auctioned by them, to help fulfil their non-solar renewable purchase obligations targets.
Moving to competitive bidding mechanism in the wind energy sector has caused a slowdown in capacity addition as participants are yet to adjust, with tariffs having fallen to Rs 2.4 to 2.6 per unit, from Rs 4 to 4.5 per unit under the feed-in-tariff regime.
Such low realisations remain unviable for the entire value chain at current capital costs of Rs 6.8 crore to Rs 7.2 crore per MW.
Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply
With all the progress that India has made in renewables, the bigger picture isn't all that rosy.
The divestment plan is seen as an attempt by SunEdison to monetise some assets to raise capital in the near term, having grown quickly through acquisitions and having this month posted a bigger than expected quarterly loss.
The Asian Development Bank will provide a $500 million loan to build a transmission system for solar and wind energy in western India, the bank said on Friday, a day after it announced a $400 million package for a water and sanitation program in the eastern part of the country.