New capacity addition by the wind power sector may decline to 2,500 MW in current fiscal against that of 3,415 MW in last fiscal due to challenges faced by the segment in the two states of Madhya Pradesh and Maharashtra, rating agency ICRA said today.
It, however, said that the long-term outlook for the wind sector remains strong given the favourable government support and large untapped wind power potential. Wind energy sector is facing headwinds in the near term arising out of the substantial reduction in preferential tariff for new wind energy projects to be commissioned in Madhya Pradesh, the agency said in a release. In Maharashtra, the sector is facing challenges of slowdown in signing of fresh power purchase agreements (PPAs) and reported delays in payments by state-owned utility. “These headwinds could lead to a decline in fresh capacity addition to about 2,500 MW in the wind energy sector during FY2017.