Tariff for wind energy comes down

September 07, 2017 12:00 am | Updated 03:39 am IST - BENGALURU

Rate reduced from Rs. 4.50/unit to Rs. 3.74/unit; will be in force till March 31, 2018

The lower tariff is likely to persuade customers to resume purchasing wind power, as many had shifted to solar owing to more attractive rates.File PhotoK_Gopinathan

The lower tariff is likely to persuade customers to resume purchasing wind power, as many had shifted to solar owing to more attractive rates.File PhotoK_Gopinathan

After revising solar tariffs, the Karnataka Electricity Regulatory Commission (KERC) has ordered a mid-term revision of tariff for wind energy.

The Commission has revised tariff for wind power projects to Rs. 3.74 per unit, which will be in force till March 31, 2018.

This is a reduction from the Rs. 4.50 per unit fixed in February 2015. The 2015 revision took the tariff up from Rs. 4.20 per unit.

The tariff will be applicable to all new wind projects, Power Purchase Agreements (PPAs) entered into and approved by the KERC after September 4 and for PPAs entered prior to this date, which have not been approved by the Commission. The KERC order has fixed the tenure of the PPA for 20 years with an option for the developer to extend it for another five years.

Reasons for reduction

Stating that ‘periodic upward revision of tariff, especially for wind power, can no longer be taken as the norm for promoting the sector’, the Commission has cited a reduction in capital costs and an intention of promoting competition in the wind power sector among the reasons for the revision. “They also call for a mid-term tariff revision to ensure that consumers get the benefit of lower cost of wind power generation and adoption of efficient and improved technology in wind power projects by investors is incentivised,” the order said.

Hub height

Another reason cited for the reduction in tariff is the increase in hub height of wind turbines, which, in 2015, was 80 metres and above.

“The analysis of data furnished by the Karnataka Renewable Energy Development Ltd indicates that 75% of the projects allocated during the financial years 2016 and 2017 have hub heights in the range of 90 to 100 metres,” the order said.

The higher hub height is touted to cause an increase in power generation.

Tariff cited in other bids

Another major point the KERC has kept in mind is the bids called by the Solar Energy Corporation of India for procurement of 1,000 MW wind power in which the lowest tariff quoted was Rs. 3.46 per unit.

“The tariffs have been rationalised. The last revision was two years ago. There is major innovation happening now. Even in the case of solar panels, if the rates are falling every six months, we can revise the tariff accordingly. Yields have increased in wind energy. We cannot have old technology and old rates,” said KERC Chairman M.K. Shankarlinge Gowda.

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