Wind energy expansion capacity to slow in next five years: CRISIL

Wind energy expansion capacity to slow in next five years: CRISIL

1. A recent report by CRISIL has projected that the wind energy sector in India will record a slow growth in next five years (2019-2023).
2. According to CRISIL, the shift to competitive bidding mechanism has slowed wind energy sector growth due to a significant fall in tariffs. This has consequently resulted in a decline in bid response and profitability of for original equipment manufacturers (OEMs).
3. CRISIL has further advocated that the low tariffs are economically unviable for the entire value chain and would lead to low capacity addition in the wind energy sector.
4. Competitive bidding is a procurement method in which bids from competing contractors/suppliers are invited by openly advertising the scope, specifications, and terms and conditions of the proposed contract and the criteria for evaluation of bids. Competitive bidding mechanism for wind energy sector was introduced in 2017.
5. Previously, in the wind energy sector, feed-in tariffs method was followed. Under this method, a fixed price was ensured for power producers.
6. The Indian government has set a growth target of installation of 175 GW aggregate capacity of renewable energy by 2022. It includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power.