According to a CRISIL study, effective policy changes by the new and renewable energy ministry could increase annual wind capacity addition by 6-8 gigawatts (GW) starting in the fiscal year 2026, about four times of the 1.6 GW growth recorded over the previous five fiscal years.
As per the study, one of the major factors in the development of wind energy since fiscal 2018 has been the aggressive tariff bids in reverse auctions.
The yearly growth in solar capacity was 8.3 GW on average over the five fiscal years through 2022, but the annual growth in wind capacity was only about 1.6 GW. With the ministry introducing four significant policy changes in January, all of that may now alter, according to the report.
The four policy changes include setting a goal to award 8 GW of wind tenders per annum, replacement of the reverse auction process with a single stage (two-envelope closed bidding), offering of discovered renewable tariffs to discoms at an average pooled tariff by an intermediary, and lastly, ensuring discipline in terms of timely project completion.
Ankit Hakhu, Director at the CRISIL Ratings, claims that with 8 GW of capacity up for bid in the fiscal year 2024 and 20-24 months to the commission, 6-8 GW of capacity can be installed annually beginning in the fiscal year 2026, assuming the policy push proceeds at the same rate.
Despite being more expensive than solar, increasing wind power generation is essential to the nation’s objectives for the energy transition. This is because wind energy projects can satisfy peak power demands even during the night, which helps to balance the grid’s reliance on solar energy during the day. As a result, it plays a crucial role in the setup for a 24-hour power source that discoms desire.
