Injunction stalls India’s first auction of wind farm licenses

Opponents claim auction will accelerate plunge in turbine installations.

India’s first auction of wind farm licenses at Rajasthan state was halted by an injunction filed by wind developer Mytrah Energy Ltd and the Indian Wind Energy Association

The injunction forced Rajasthan, India’s biggest market for new wind farms last year, to withdraw a tender for as much as 1,200 megawatts for three years. Both petitioners declined to comment on their filing.

Rajasthan, which is also Asia’s second biggest wind market, decided on the auction after the rates paid to solar producers fell 39% since 2010 with the introduction of bidding. It planned to set a maximum tariff and award licenses to developers offering the biggest discount.

Lobbies representing developers and turbine makers claim the Rajasthan auctions will further depress a market that has plummeted by half since two state incentives ended in 2012.

They said the auctions won’t lead to the reductions in charges seen in the solar industry because project costs in India of about US$1 million a megawatt are already among the lowest in the world.

Wind power is mostly sold at fixed rates set by state regulators based on discussions with producers and buyers.

Generation costs in India’s two-decade-old wind industry are established, making it harder to boost efficiency compared to solar. Rajasthan and Maharashtra accounted for 53% of the 1.7 GW of wind capacity India installed last year.