Responding to the longstanding industry demand of removing tariff caps in renewable energy auctions, the ministry of new and renewable energy (MNRE) has decided that “cap or upper ceiling tariff will not be prescribed in future bids”. The tariff cap was one of the reasons cited by the industry, which slowed down the pace of adding renewable generation capacities to 8.6 giga-watt (GW) in FY 19 from 11.3 GW and 11.8 GW in FY17 and FY18, respectively. The other reasons were devaluation of the rupee, rising finance costs.
“The move to do away with the tariff cap reflects not only the increasing maturity of the sector but also the government’s belief that robust bidding processed will ensure tariffs remain at reasonable levels,” said Sumant Sinha, chairman and managing director of ReNew Power.
