India removes tariff caps on solar and wind tenders

This could hike tariffs for wind auctions.

The Ministry of New and Renewable Energy (MNRE) of India has issued a new regulation authorising the tendering agencies and state utilities to remove tariff caps from wind and solar tenders. The upcoming federal tender (Round Ten) should not include a tariff cap. The decision is not expected to make a major difference for solar auctions, as prices are already quite low at $0.03/kWh (INR2.5/kWh) in the latest round but could lead to a higher tariff for wind.

Recent allocation rounds faced massive under-subscription, and the latest wind tender (Round Nine) for 1.2GW, which included an $0.04/kWh (INR2.9/kWh) tariff cap, was rescheduled several times owing to a lack of interest from industry. As a consequence, the wind sector saw only 2.4GW of new wind projects, in spite of a huge amount of auctioned capacity.

According to the government of India, installed renewable power capacity in India crossed the 84GW threshold in December 2019 (84.4GW), with wind power capacity reaching 37,280MW, solar capacity 32,530MW, biomass capacity 9,940MW and small hydropower capacity 4,650MW. India has set a target of 175GW of renewable power capacity by 2022, including 100GW from solar, 60GW from wind, 10GW from biomass and 5GW from small hydropower.

This article was originally published by Enerdata.