States may auction under-construction wind power projects, further lowering tariffs

States may auction under-construction wind power projects, further lowering tariffs

The disruption caused by India’s low clean energy tariffs is playing out, with rating agency Crisil cautioning that the risk profile of wind projects will increase. In a report, Crisil said that under-construction projects, as part of the feed-in tariff (FiT) regime, may be put up for auction by the states to further lower tariffs.

While these projects didn’t have a power purchase agreement, work had started on them on the basis of the licences awarded by the states. Feed-in tariffs ensure a fixed price for wind power producers.

Also, the firms that have quoted such competitive tariffs may generate only 12% equity internal rate of return (IRR), even after assuming high plant load factor (PLF) of 33-35% and a lower cost of borrowing at 9-9.5%, said the study, exclusively shared with Mint. Read More…

 

 

 

Credit By: Live Mint

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