Explanation:

India has set an ambitious target of reaching 175 GW of installed capacity from renewable energy sources including 100 GW from solar and 60 GW from wind by the year 2022.

Government has issued guidelines providing a framework for procurement of wind power through a "transparent process" of bidding including standardisation of the process and defining of roles and responsibilities of various stakeholders.

These guidelines aim to enable the distribution licensees to procure wind power at competitive rates in a cost effective manner.

The guidelines are applicable for procurement of wind power from grid-connected Wind Power Projects (WPP) having individual size of 5 Mega Watt (MW) and above at one site with minimum bid capacity of 25 MW for intra-state projects; and individual size of 50 MW and above at one site with minimum bid capacity of 50 MW for inter-state projects.

The guidelines address some of the key concerns for the sector pertaining to off-taker’s credit profile, grid curtailment and termination payments. The guidelines require the procurers to direct sign power purchase agreements (PPAs) with wind power developers to provide a payment security through letter of credit equivalent to one month average billing and a payment security fund to support payment for at least three months of receivables for the projects tied up.

In addition, the procurer may also choose to provide state government guarantee in a legally enforceable form, both for payment of energy charges and termination compensation.

As per the latest set of rules, the developer will have to compensate the procurer in case of the generation falls below a prescribed Capacity Utilisation Factor (CUF) agreed at the time of signing of the PPA. The minimum declared CUF should be 22% as per new guidelines.

The norms are important as the government had decided to put for bidding 10 GW wind capacities each in the fiscal years 2018-19 and 2019-20 to meet the target of 60 GW of power generation through clean energy by 2022. The present wind power installed capacity is 32 GW.

• India's overall installed capacity is 329.4 GW, with renewables accounting for 57.472 GW (April 2017).
• In the country's renewables mix, contribution of wind power is at 56.2% (32.3 GW), and solar power is at 21.8 % (12.5 GW).
• India is at 4th position in term of wind power installed capacity after China, USA and Germany.
• According to the National Institute of Wind Energy, India’s installable wind energy potential is 302 GW with towers of a height of 100 metres.

India’s Integrated Energy Policy projects 800 GW installed capacity in 2031-32 out of which 40 %( 320 GW) will come from renewable energy.