Oil India believes wind energy is more profitable

Vol 16, PW 4 (06 Sep 12) People & Policy
     

Arctic sea ice levels hit an all-time low in August but Oil India says the threat of climate change is not the only driver behind its thrust into renewable energy.

“Renewable energy projects give us a hefty 15% IRR (Internal Rate of Return) on investment,” Oil India tells us. On August 31, Oil India invited bids to build, operate and maintain a 50-MW wind farm, estimated to cost up to Rs350cr ($70m).

“Whoever offers us the highest IRR will win,” we hear. General Electric, Suzlon, RRB Energy and Gamesa are among those likely to bid.

“Wind power density is highest in Tamil Nadu, Karnataka, Gujarat, Maharashtra, Rajasthan and Andhra Pradesh,” adds a company source. “Companies must acquire land themselves and build the wind farm at a location identified using data from the Centre for Wind Energy Technology (in Chennai).

” Oil India will hold a pre-bid in Delhi on September 10 and wants to receive bids on September 25, after which it is likely to award the contract within a month. “It can take up to five months to build and commission a wind-farm,” we hear.

“By March 2013, we aim to commission the project.” Oil India wants the selected contractor to operate and maintain the wind-farm for 20 years.

Oil India’s confidence is boosted by good returns from a 15-MW wind farm commissioned at Jaisalmer district in Rajasthan on March 31, soon after signing a PPA with Rajasthan authorities on March 6 to sell electricity to the grid at Rs4.50/unit. “GAIL, IndianOil and Hindustan Petroleum all have wind power investments,” adds Oil India.

“Even ONGC invited bids to build wind power projects in August.”