State puts in place nation's first feed-in tariff based on wind speed

INDIA: The western industrial state of Maharashtra has become India's first to offer feed-in tariffs based on the wind speed of the area in which a project is located, a development welcomed by wind-power businesses.

The Maharashtra Energy Development Agency (MEDA) announced that wind-power projects would be classified into wind zones so that a feed-in tariff regime finalised in May can be implemented.

The annual mean wind-power density (WPD) - related to the mean wind speed - of the site will be declared by either the Centre for Wind Energy Technology (CWET) of the federal Ministry of New and Renewable Energ, MEDA, or will be privately measured by the project developer and vetted by CWET.

Projects located in areas of low WPD will be paid more in order to encourage developers to set up beyond regions with the highest WPD.

The move towards a wind-zone-based tariff regime began in 2009 with the terms and conditions for tariff determination from renewable-energy sources set by the national electricity regulator the Central Electricity Regulatory Commission (CERC). These regulations said the mandatory capacity factor of wind-energy projects in areas with low wind-power density should be lower.

However, it kept the minimum WPD requirement at 200 watts per square metre, or about 5.5 metres per second (m/s), for a project to be approved.

The regional Maharashtra Electricity Regulatory Commission developed its own regime in 2010. Regulation 26 of its terms and conditions for the determination of renewable energy tariffs mandates different capacity factors and sets different tariffs for the period of the power purchase agreement adjusted for inflation, depending on WPD levels (see table).

Viability responsibility

These tariffs are valid for 13 years from the commercial operation date for projects commissioned between April 2011 and March 2012. The wind-power generator will be responsible for ensuring the viability of the project, despite the lower wind speeds.

The policy aims to encourage projects to be set up beyond the windiest regions. "It will compensate people for risking going beyond wind zone 4," said Manish Kumar Singh, secretary of the New Delhi-based Wind Energy Association of India, adding that the new format would increase projects' profit.

Feed-in tariff rates for wind zones defined by the Maharashtra
Electricity Regulatory Commission
Wind Zone 1 2 3 4
Mean wind power density (W/m2) 200-250 250-300 300-400 >400
Capacity factor (%) ≥20 ≥23 ≥27 ≥30
Tariff (INR per kilowatt hour) 5?27 4?67 3?97 3?58
Conversion rate at 1 October 2011 $1 = INR 49?7