Last Updated : 18 February 2013 at 20:00 IST
India wind energy sector has quietly been adding a few thousand Megawatts for the past years on a continuous basis. In 2000, the installed wind capacity stood at around 200 MW while in 2011, the figure was close to 16000 MW.
But this surge could very well come to an end if competitive bidding for tariff discovery is adopted by the regulators.
The case in point is Rajasthan Renewable Energy Corporation's proposal to introduce competitive bidding for tariff discovery in allotting wind mills to new players. While Indian Wind Turbine Manufacturer's Association have come against the proposal, the regulator may bring out that the model has worked out in the case of solar power wherein competitive bids have been received from players for tariffs. This could well be replicated elsewhere and the regulatory hues and cries now have a pan Indian voice.
While many people question the sustainability of the measures (players in solar may quote artificially low rates to win bids and then may seek bailouts), it has also to be remembered that wind sector has its own unique woes.
--Accelerated Depreciation Benefits that helped the industries to set up wind mills incurring low capital costs have been taken away; also Generation Based Incentives have been shut down. This in a way disincentivised the wind energy sector.
--The players in the wind energy sector are supposed to compete with coal and diesel based power generation which does not provide them a level playing field as both the commodities are heavily subsidised. (diesel may not be subsidised for bulk buyers, nevertheless the commodity may be sourced from retailers who enjoy subsidy).
--Often, when they get the best winds, the power from the wind energy sector is not allowed into the grid citing low grid capacity. Thus power evacuation and thereby revenues get curtailed. This is despite the grid code stipulating that power from the wind energy should not be disallowed grid entry. Industry players have raised the issue with regulators and they have been replied that utilities often lack the money to pay the wind energy sector! The thermal power plants are too difficult and too costly to be shutdown and then restarted.
Globally too the competitive bidding mechanism to discover tariffs has failed; the case of Brazil and Spain is worth studying in this regard.
So what is the alternative?
Let markets define the prices; if that is not feasible, initiate targeted subsidies: let poor receive the benefits of the subsidy and rich pay their dues.
Now with the introduction of schemes like AADHAR, it has become easier for the poor to be paid their due.
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