India, which currently derives about 85 percent of its energy from thermal capacity, got a fillip to its push for renewable energy on Friday when power tariff for wind energy dropped to a record low during auction for one giga watt (GW). The bids were won by listed entity Inox Wind, Mytrah Energy, Green Infra and Ostro Kutch Wind at Rs 3.46 per kilo watt hour (kWh).
The auction for awarding wind energy projects was conducted by state-run Solar Energy Corporation of India (SECI) that started on Thursday and concluded on Friday. Each of the four entities will generate 25 mega watt (MW) and sell it to the overall grid.
The prevailing tariff for wind energy in India is around Rs 4.16 to Rs 5.76 per kWh.
[1000 kw is equal to 1MW, 1,000 MW is equal to 1GW]
Inox Wind is listed on Indian stock exchanges and could see the impact of the auction on its share prices when markets open on Monday. The stock closed at Rs 178 on Friday on the BSE.
Mytrah Energy is the subsidiary of UK-based Mytrah Group with interests in renewable energy and its investors include Capital Group, Blackrock and Henderson.
Ostro Kutch Wind Private Ltd. was incorporated in June 2015 and backed by British private equity firm Actis. Green Infra is backed by Singapore-based Sembcorp Industries.
Other bidders in the first-ever auction for wind energy included ReNew Power Ventures, Gamesa Renewables Pvt. Ltd., Hero Future Energies Ltd and RP-Sanjiv Goenka Group's CESC Ltd.
Earlier, on Wednesday, India increased its solar power target from 20,000 MW to 40,000 MW under the Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects. The country aims to set up 50 solar parks by the financial year 2019-20 to achieve the target.
"The Ministry of New and Renewable Energy (MNRE) is already implementing a scheme for development of at least 25 solar parks with an aggregate capacity of 20,000 MW, which was launched in December 2014. As on date, 34 solar parks of aggregate capacity 20,000 MW have been approved which are at various stages of development," according to an official statement.
India aims to generate 60GW in wind power by 2022 while the overall RE target is 175 GW by that year, according to the Niti Aayog, the official think-tank of the Narendra Modi government. The current installed capacity of wind energy in India is 28,700 MW.
For the period April-December 2017, thermal energy accounted for 85 percent of the total electricity generated in India, according to provisional statistics released by the Central Electricity Authority. State-run NTPC is the largest thermal power producer of India.