While the drop in wind power tariff to Rs2.64 per unit, at an auction conducted by Solar Energy Corp. of India Ltd on Thursday, may seem like a great positive, industry insiders feel it is likely to do more harm than good to the sector.
For starters, several state governments are already pressurizing renewable power producers to renegotiate existing deals at a lower price, and the new record low tariff for wind power is only likely to embolden them further. Tamil Nadu, for instance, has been trying to renegotiate agreements at Rs3.4 per unit as compared to Rs4.4 per unit that it has signed for. Karnataka, similarly, is vying for Rs3.75 per unit as against Rs4.5 per unit.
“Renegotiation of contracts is bound to dent the very little confidence that is left in India’s infrastructure sector. Read More…
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