ICRA Ratings today said the wind power capacity addition will improve to 3 GW this fiscal, backed by project awards by Solar Energy Corporation of India (SECI) and state utilities.
"The capacity addition in the wind power sector is expected to improve to about 3 GW in FY2019, backed by the project awards by the SECI and state distribution utilities since February 2017," said Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings in a statement.
Majumdar further said the SECI and the distribution utilities in Gujarat, Maharashtra and Tamil Nadu have issued bids for wind-power capacity of 7.5 GW over the past 14 months. This capacity is expected to be commissioned over the next 6-18 months, which would support capacity addition in FY2019 and FY2020.
The Ministry of New and Renewable Energy (MNRE) announced the trajectory for award of wind power projects through competitive bidding to achieve the cumulative wind capacity target of 60 GW by FY2022.
In line with this target, bids for about 20 GW wind-based capacity are proposed to be awarded over FY2019 and FY2020. This bidding programme, if implemented in a timely manner, provides a visibility to support the capacity addition over next four-year period, it added.
The timely completion of project awards and subsequent signing of both power purchase agreements (PPAs) by the SECI and back to back power sale agreements (PSAs) with state-owned distribution utilities is required, ICRA said, adding that in this context, the willingness to participate and sign PSAs by discoms especially in states with limited wind energy potential remains critical.
The wind energy sector witnessed a capacity addition of only 1.7 GW in FY2018, which is a significant drop from the 5.5 GW capacity added in FY2017.
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"This was driven by a transition from the existing feed-in tariff-based PPA regime to a competitive bid-based PPA regime in the wind energy sector, following the large reduction in tariffs discovered through the competitive bidding route against the earlier feed-in tariff regime," the report said.
In FY2018, the wind-based capacity addition was mainly seen in Karnataka (758 MW), Andhra Pradesh (344 MW), Tamil Nadu (336 MW) and Gujarat (273 MW). With this, the wind-based generation capacity has increased to 34.0 GW as on March 31, 2018, as against 32.3 GW as on March 31, 2017, it added.
The renewable energy (RE) sector has witnessed a capacity addition of 8.3 GW during the period from April 2017 to February 2018 and is expected to report a capacity addition of 11.5 - 12 GW for the full year of FY2018, mainly driven by capacity additions in the solar power sector. Moreover, the capacity addition in the RE segment is expected to surpass the 9.5 GW capacity added by the conventional power segment in FY2018, ICRA said.