· According to a report by Crisil, the capacity addition in the wind energy sector will slow down over fiscal 2019 to 2023, with only 14-16 GW being added, entailing investments of about Rs.1,10,000 crore.
· The decline is driven by the allotment of central transmission utility’s (CTU) grid connected capacities.
· The shift to a competitive bidding mechanism also slowed industry growth due to a significant fall in tariffs (to ₹2.4-2.6 per unit, from ₹4-4.5 per unit under the feed-in tariff regime), triggering a decline in both bid response and profitability for original equipment manufacturers (OEMs).
· According to Crisil, such low realisations are unviable for the entire value chain at current capital costs of ₹6.8-7.2 crore per MW.
· Capacity additions will primarily be driven by central government allocations with relatively stronger counterparties such as Solar Energy Corporation of India (SECI) and PTC India, reducing risk compared with direct exposure to state discoms.
· 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 fulfill their non-solar renewable purchase obligations (RPO) targets.
Source : The Hindu
07.03.2019