Why India’s Wind Turbine Makers Are Under Stress

Why India’s Wind Turbine Makers Are Under Stress

Lower tariffs for wind power developers after India moved to competitive bidding has hurt wind turbine makers. The situation stems from transition from feed-in tariffs to auctions in 2017 that drove wind energy tariffs to record lows.

Earlier, wind power developers would set up projects before signing power purchase agreements with utilities and tariffs, set by state electricity regulatory commissions, varied between Rs 4 and Rs 6 per unit. This changed in February 2017 with the introduction of the auction regime, with power prices falling to Rs 3.46 a unit.

The shift to auctions and low tariffs disrupted wind capacity addition, which fell by half from the previous levels, Kameswara Rao, partner (energy, utility and mining) at PwC, told BloombergQuint in an e-mailed response.

This, he said, has put manufacturing supply-chain in stress. “The diminished competition could push up the project costs in future.” Read More

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