Inox Wind wins 200 MW in 3rd national wind-power auction, bid at Rs 2.44 per unit

Renewable energy player Inox Wind said it won orders to erect wind power turbines with a combined capacity of 200 MW in the third round of national auctions held two days ago.

The third round was for a total capacity of 1,000 MW or 1 GW, and was the third of the national wind power auction series. In 2017, two such auctions were conducted for 1 GW each and Inox Wind had won 300 MW in the first one and 250 MW in the second round.

The company said it won by offering to sell wind power at 2.44 per unit for the next 25 years. The winning price for the first round had been Rs 3.46 per unit and that of the second round had been 2.64 per unit.

At 2.44, these bids are the lowest seen for national level auctions, which include plants in multiple states. Two months ago, an auction held by Gujarat Urja Vikas Nigam Ltd (GUVNL) had seen a bid of 2.43 per unit.

The bids are now largely in the same range as those seen in similar auctions for setting up solar energy plants.

Inox Wind said it now has an order book of 800MW from various state and national auctions, among the largest in India.

News reports also said that Torrent Power had won 500 MW, or half the total capacity, in the third round of the auctions held by Solar Energy Corporation of India.

The auctions, intended to promote the transition of energy sources from polluting fossil fuels to clean energy, are conducted in a reverse bidding manner in which contracts to build the farms are awarded to those companies who promise to supply electricity at the cheapest rates.

Inox Wind had said in November that it expected 6,000 MW to be auctioned in five months from November to March, though that is now likely to turn out to be an over-estimation.

Inox Wind said it would locate the newly won SECI-3 project in the Kutch region in the state of Gujarat.

“The project would be executed over the next 12-15 months,” it said.

Inox Wind will supply, erect and commission its advanced 2MW Wind Turbine Generators (WTGs) and will be responsible for the development, construction, commissioning and long term operations and maintenance services for the project.

The company has a business model of winning at auctions and setting up the power plant at a very low cost. Once it is producing power at a sustainable and profitable rate, the power plant will be sold to a power company.

This way, the risk of execution is entirely borne by equipment manufacturer, which in this case is Inox Wind.

“We will win confirmed order book and then down sell the order win to independent Power Producers (PPS) since it is not our intention to become wind power asset owners,” it has clarified in the past.

It will develop, construct and commission the projects, and provide long term operations and maintenance services even after they are sold.

It also said that it might end up getting a larger share of the latest round of auctions if any of the other winners chooses to have their project implemented via Inox.

“We are confident of scaling up our auction based order book as the government executes their target of achieving 10GW of wind power auctions in FY19 and FY20 each,” the company said today.

“Our inherent low cost structure makes us one of the lowest cost producers of wind turbines globally,” it said.

Inox Wind CEO Kailash Tarachandani said the company is now looking forward to the upcoming auctions of 10GW each in FY19 and FY20 to help India meet its target of having 60GW wind power capacity by 2022.

Inox Wind has three manufacturing plants in Gujarat, Himachal Pradesh and Madhya Pradesh with a combined capacity of 1,600 MW per annum.

The plant near Ahmedabad (Gujarat) and Barwani (Madhya Pradesh) manufactures Blades & Tubular Towers while Hubs & Nacelles are manufactured at the company’s facility at Una (Himachal Pradesh).