Wind energy capacity addition to increase to 3 GW in FY 2019: ICRA

Aerial view of wind mills

Aerial view of wind mills   | Photo Credit: K_K_Mustafah

Transition to bid-based power purchase agreement regime is cited as the reason for low capacity addition in FY2018.

The capacity addition in the wind power sector is expected to improve to about 3 gigawatts in FY 2019, after witnessing a weak performance in FY2018.

The wind energy sector witnessed a capacity addition of only 1.7 GW in FY2018, which is a significant drop from the 5.5 GW capacity added in FY2017, according to rating firm ICRA.

ICRA said that the lower capacity addition in FY2018 was due to the transition of the industry to a competitive bid-based power purchase agreement regime (where the energy is procured through auction route and the lowest bidder is selected). Earlier the practice was a feed-in-tariff regime where rates were fixed by the respective state electricity regulators.

Sabyasachi Majumdar, Senior Vice-President & Group Head, ICRA Ratings, said that since February 2017 Solar Energy Corporation of India Limited and state distribution utilities in Gujarat, Maharashtra and Tamil Nadu had issued bids for wind power capacity of 7.5 gigawatts. “This capacity is expected to be commissioned over the next 6-18 months, which would support capacity addition in FY2019 and FY2020,” he added.