“The policies of state governments should be in line with those of the union government,” says Manish K Singh, Secretary, Indian Wind Energy Association
Recent performance of wind power sectorThe wind power installation data for the first quarter (April-June) of the FY 2015-16 does not bode well for the sector. During the first three months of the financial year 2015-16, the wind power capacity addition was only 319.2 MW. This is the lowest in the last two consecutive financial years. This indicates that the industry is going on the same track as it was two years ago when installations dipped immediately after having achieved the highest ever addition in capacity. The prime reason for this is that certain core issues lie unaddressed even after continuous efforts from the union government and industry, observes Manish K Singh, Secretary, Indian Wind Energy Association.
In the first quarter of FY 2014-15, the industry added around 479 MW while during the same period of FY 2013-14, around 514 MW was brought online. The total wind power capacity addition in FY 2014-15 was around 2,297 MW, more than that was added in FY 2013-14 (2,089 MW). “Based on data pertaining to the last two years, it is anticipated that in FY 2015-16 the wind power capacity addition will be around 2,300 MW,” informs Manish.
The sector added an additional 325.55 MW in the last two months that is July and August. The total wind power capacity addition in FY 2015-16 up to 31st August, 2015 stands at 644.75 MW. Taking into account the revised target of 60,000 MW for wind power installation till 2022, the performance of the sector leaves a lot to be desired. Manish believes, wind industry in India has adequate capacity and ability to add around 5,000 MW per year and achieve the target set by the union government. However, he says, “Some roadblocks in the development of wind power in India need to be tackled for the sector to take off.”
Major roadblocksManish observes that the core issues affecting the growth of the wind sector are:Policy challenges: The states do not appear to be on board with the targets set out by the union government. Every state government has set a renewable purchase obligation (RPO). It is mandatory for state discoms to purchase 5 to 10 per cent of their power from renewable energy providers. The percentage of RPO varies from state to state. But in most of the states, the RPO is not enforced. Andhra Pradesh and Madhya Pradesh are RPO-compliant and have seen a lot of addition of wind generation capacity in recent years. Even where states abide by RPOs, they just meet their targets and don’t go beyond that. Tamil Nadu, for instance, is the leading wind power state in the country with an installed capacity of 7,456 MW. The government directed wind players to reduce their supply to the grid during high wind season. On the other hand, Gujarat is power surplus and does not want more wind turbines. In Rajasthan, there are “severe right of way issues” and the state-owned utility is limiting wind power purchase, leaving the producers to sell in the market. The principal problem in Karnataka is that of land acquisition – people from outside the state cannot buy private lands beyond a limit, and getting agricultural and forest lands is not easy. Andhra Pradesh also has “grid constraints”.
Availability of land in windy areas: Land acquisition is a problem for most new projects. The big challenge for wind power is the need for large tracts of contiguous land even though, the developers have opted to purchase land only for the foot print of the turbines and right of way. Land acquisition is getting difficult, especially one when the need is to be close to the evacuation point.
Evacuation infrastructure: In view of the short gestation period, it is essential that transmission infrastructure is ready before power generation takes place. This requires upfront investment. The other issue is grid connectivity as wind sites are far from urban centres. The lag between wind power installation and transmission infrastructure is a significant disincentive.
Cost of finance: Finance has become very costly therefore domestic companies are not in a condition to arrange funds for new projects. India interest costs are high. In addition, financial institutions are reluctant to finance new projects given their overexposure to the power sector, as a whole.
Short term measures recommendedTo revitalise the sector, Manish suggests, “The policies of state governments should be in line with those of the union government. Government should encourage rapid deployment of wind power through policy measures. RPO compliance should be strictly enforced by State Electricity Regulatory Commissions (SERCs).”
He also adds that there should be provision of adequate power evacuation infrastructure, availability of low cost finance for new projects to come up and a “MUST RUN” status for wind power.
The government should ensure land availability at windy sites and expedite land transfer from farmers to the industry for faster project implementation. “Challenges in land acquisition and delays in environmental clearances also should be looked into,” suggests Manish.
Long term measures Manish recommends some long term measures on the sustainability as:
Announcement of Renewable Energy Policy and getting the States to facilitate wind power investments.
Construction of adequate evacuation infrastructure.
Co-ordination between the Union government and State governments related to wind power development
Development of technology for energy storage.
Strict enforcement of RPO
Mechanism for low-cost finance.
He says that addressing these issues can bring a positive change in wind power development.