Soaring wind power spurs environmental and economic advancements

The following discussion focuses on the expansion of wind-producing capacity in India, the potential and difficulties in the wind energy sector, the environmental effect of wind energy, cost benefits, driving forces, impediments to overcome, and India’s commitment to renewable energy

Wind generating capacity in India has grown dramatically, with multiple wind farms erected nationwide. The government has set high goals for increasing the percentage of renewable energy, particularly wind power, in the total energy mix. These objectives have stimulated investment in the wind energy sector, drawing domestic and foreign businesses.

Several states in India have been at the forefront of wind energy development. States such as Tamil Nadu, Gujarat, Maharashtra, Rajasthan, and Karnataka have favourable wind conditions and have established many wind farms. These states have significantly contributed to India’s wind power capacity, attracted investments, and created employment opportunities.

Wind energy: opportunities, challenges, and the low-carbon economy transition
Thanks to year-round banking provisions, India has already been harnessing wind energy to provide clean power to various industries, including textiles, automotive component manufacturers, and foundries. This successful implementation can be significantly expanded to meet the energy needs of commercial and industrial (C&I) consumers, especially those committed to achieving net-zero emissions or reducing their carbon footprint. Ajay Devaraj, Secretary General at the Indian Wind Power Association (IWPA), highlights that C&I consumption is projected to double by 2030, according to data from the Central Electricity Authority (CEA), presenting a substantial and continuously growing investment opportunity. Furthermore, wind energy can be easily converted into green hydrogen or ammonia.

Martand Shardul, Policy Director at the Global Wind Energy Council (GWEC), emphasises the need to leverage India’s diverse and abundant renewable energy sources, including solar, wind, and pumped hydro. Martand argues for adopting a comprehensive perspective that considers all these sources collectively. In addition, Martand suggests that India should advocate for creating financial instruments to mitigate risks and support emerging technologies. As a global leader in the clean energy sector, India’s actions and decisions will significantly impact the world’s ability to transition to cleaner energy sources.

The challenges faced in the onshore wind sector include acquiring land in windrich areas and establishing reasonable pricing for wind energy. Meanwhile, the primary challenge for offshore wind lies in the high installation costs. However, with regulatory support, consistent regulations, and financial incentives such as viability gap funding (VGF), the risks and returns associated with both onshore and offshore wind projects can be effectively managed, making them attractive investments for stakeholders.

Environmental impact mitigation: responsibilities and solutions
Wind energy is one of the cleanest sources with minimal environmental impact, primarily because it does not require water use. The achievements of Tamil Nadu exemplify this fact in August 2022. During that month, the state generated an impressive 1991.1 million units (MU) of wind energy, utilising an installed capacity of 8621 MW connected to the state grid. As a result, an astounding 3,77,251 metric tonnes of carbon emissions were saved, along with 1279 million litres of water. The overall annual wind energy generation in FY 2022–23 across wind-rich states in India reached 57,185.72 MU, supported by a state grid-connected installed wind energy capacity of 35,895 MW. The magnitude of carbon reduction and water conservation achieved through wind energy is immense.

Addressing concerns raised by environmentalists in Rajasthan and Gujarat regarding the potential threat to the Great Indian Bustard, Ajay highlights that no statistical evidence has been found to establish a direct correlation between windmills and the endangerment of this rare bird species. Nevertheless, as a precautionary measure, windmills located along the flight path of the Great Indian Bustard have been equipped with bird diverters.

Looking at the situation from a policy perspective, Martand emphasises the importance of long-term planning that extends beyond the present or the current decade. India’s decade of action should involve making challenging decisions and undertaking ambitious projects. While previous efforts may have been relatively easier, future projects will pose greater difficulties, especially considering food security and land acquisition factors. Martand asserts that India should aim to develop a diverse energy portfolio to benefit itself, the region, and the world.

Cost benefits and driving factors of wind energy
When comparing wind energy costs to other energy sources, it becomes evident that wind energy offers significant advantages. Furthermore, various factors are contributing to the declining cost of wind energy.

There is a pressing need to tap into the abundant and diverse renewable energy sources available nationwide in India. Whether it is solar, wind, or pumped hydro, it is crucial to adopt a comprehensive perspective that considers all these sources collectively.

According to Ajay, wind energy costs considerably less than conventional forms of energy. This cost reduction can be attributed to several factors, including the ability to enhance generation through larger blade sizes and increased hub heights. These advancements enable wind turbines to capture more energy from the wind, resulting in higher efficiency and cost savings.

To further accelerate the adoption of wind energy and other renewable technologies, Martand suggests that India should advocate for creating financial instruments. These instruments can help mitigate the risks associated with emerging technologies and provide the necessary support for their development. As a global leader in the clean energy sector, India’s actions and decisions carry significant weight and can greatly influence the world’s transition to cleaner and more sustainable energy sources.

Overcoming barriers and embracing wind energy’s role in the global energy mix
Several key challenges need to be addressed in the wind energy sector: One of the challenges is the mismatch between power purchase agreement (PPA) rates and the increasing input costs. This discrepancy puts pressure on project economics and can hinder the financial viability of wind energy projects.

Another challenge arises from delayed offtake arrangements, which have a ripple effect on the entire value chain that precedes them. These delays can disrupt project timelines, hamper investment returns, and create uncertainties for stakeholders.

The poor financial health of distribution companies (DISCOMs) poses an additional obstacle. When DISCOMs face financial constraints, it often leads to delays in payments to wind energy generators. This payment delay can create cash flow issues for project developers and impact their ability to operate and expand their ventures.

Regulatory uncertainty is yet another challenge that the wind energy sector faces. The lack of clarity in regulations and the dissonance between legislative intent and ground reality can create an environment of uncertainty and hinder the smooth operation and growth of wind energy projects.

Addressing these challenges requires concerted efforts from stakeholders, including policymakers, industry players, and regulatory bodies. By addressing the mismatch between PPA rates and input costs, improving offtake arrangements, resolving the financial health of DISCOMs, and providing regulatory clarity, the wind energy sector can overcome these hurdles and thrive in a more conducive environment.

The challenges faced in the wind energy sector are already being addressed through constructive dialogue among all stakeholders. In addition, processes and systems such as late payment surcharges closed bidding, and measures to bring predictability are being implemented. Ajay emphasises continuing this dialogue and ensuring that intentions are translated into action. Being open to making midcourse corrections will greatly contribute to mitigating these challenges.

On the other hand, Martand suggests that prioritising the evolution of a blue-bond market and setting appropriate targets by development finance institutions (DFIs), multilateral development banks (MDBs), commercial banks, and other institutions can provide crucial support for the proliferation of these niche technologies.

The expansion of wind power generation in India has brought numerous environmental and socio-economic benefits. By shifting to cleaner energy sources, India has effectively reduced its carbon footprint and contributed to mitigating the impacts of climate change.