Wind capacity addition to fall to 1.5 GW in FY18: India Ratings

Unwillingness on the part of state discoms to sign long-term purchase agreements at the higher feed in tariffs is likely to affect wind power generation as only 1,000-1,500 MW of capacity is likely to be added in this financial year, India Ratings (Ind-Ra) said today.

By: PTI | Mumbai


 According to the rating agency, there could be a substantial dip in capacity addition in FY18 to 1000-1,500 MW from about 5,400 MW in FY17. (Reuters)


Unwillingness on the part of state discoms to sign long-term purchase agreements at the higher feed in tariffs is likely to affect wind power generation as only 1,000-1,500 MW of capacity is likely to be added in this financial year, India Ratings (Ind-Ra) said today. According to the rating agency, there could be a substantial dip in capacity addition in FY18 to 1000-1,500 MW from about 5,400 MW in FY17. “This will be because of the unwillingness of state discoms to sign long-term purchase agreements at the higher feed in tariffs and unpreparedness on their part to come out with auctions in a big way in the near term. However, auctions can pick up from FY19,” it said. Ind-Ra further said though the Ministry of New and Renewable Energy has come up with detailed policies on re powering, hybrid and offshore wind power projects in the past, ground challenges and bottlenecks hinder a speedy progress on these fronts. “Distributed ownership of land and non-availability of contiguous land, due to urbanization in between, pose the biggest challenge to re powering the wind projects nearing the end of their life,” the agency said.

According to the rating firm, although a higher 200- 250 bps equity internal rate of return can be earned in re powering projects than new plants, these practical limitations can dampen the process and limit the overall progress to a fraction of the overall potential of 3,000 MW estimated by the ministry. Ind-Ra further said hybridization of the wind with solar power has major advantages as wind power peaks at night and solar power peaks during day hours, perfectly complementing each other. “Besides, there can be saved on the land and evacuation fronts. However, infrastructure bottlenecks are preventing hybridization of the existing wind power plants, while the same can be planned for upcoming plants.”

According to Ind-Ra, hybrid plants can offer about one percentage point higher returns than an individual wind or solar power plant without trackers. Given the marginal nature of incremental returns, industry players prefer to wait and watch before going up for the same in a big way.

Comments

Post a Comment

Popular posts from this blog

Expected rise in Solar Panel prices: custom duties here to stay

Image
The customs duty, which add up to 10% of Solar Panels cost, would NOT be scrapped altogether as confirmed after a meeting between MNRE and the finance secretary ( refer ) . This would mean that the presumptions, about decreasing price of solar, of many developers may not come true, based on which they may have quoted to their clients or PPAs signed. However, those developers who have won auctions expecting the customs duty would be ‘protected’. That does not necessarily mean that the exemptions would be provided to them. It may be given in another form too which has not been specified. Of course, this would be for projects that have already been won and not the ones that follow. What we can expect is the tariff of INR 2.44 to be a minimum point for solar tariffs, which would rise going further (at least for a while). On the positive side, an increase in solar panel prices imported from outside India would make the Indian panels at par with foreign ones possibly
Read more

Manufacturing Sector: The Golden Ticket for India to Become a Global Leader

Image
Greater manufacturing capacity and efficiencies hold the key to India’s growth and success in becoming the global leader. And recent initiatives by Government testify the country’s intent on claiming the mantle of the fastest growing manufacturing hub in the world. However, prioritizing the fastest growing manufacturing sector within the country (which is solar sector) and focusing on its growth (through domestic manufacturing) can help India reach great heights. Present Status of Manufacturing Sector in India Indian manufacturing sector has shown incredible growth in recent years. In the last 4-5 years India has executed nearly half of the 37 reforms, that were adopted in 2003. From facilitating the delays in getting construction permits, simplifying finance acquisition, registration of property, paying taxes, protecting minority investors, developing skill through training, resolving insolvency, and enforcing contracts; Government of India has acted aggressively on
Read more

The Grid Parity Race: Will Solar Make It

Image
The 100 GW by 2022 target has created an urgency driving up the solar capacity of the country. Besides highlighting India’s step to curb carbon emissions in the UN, this move towards green energy shift has also given India the opportunity to bridge its continuously increasing gap between energy generation and demand. India’s electricity consumption per capita has reached to 1010 kWh in 2015. And with booming population, (1,326,801,576 in 2016) the power demand is expected to rise significantly in 2017. In this scenario, trusting green energy rather than limited reserves of fossil fuel can help develop India into an energy rich country. However, regardless of the environmental benefits, solar has to match the pricing structure of conventional energy to win the race, encouraging common man to opt for green energy. Grid Parity: Current Scenario
Read more