The wind energy market is promised to have a powerful growth in the next decade, and India is on its way to lead the race
Asia Pacific is the major market in the wind energy sector, with China and India spearheading growth in the region. While China led the wind energy market, India isn’t far behind. Although the wind energy was overshadowed by solar projects, the sector has received a boost as the government has restored key tax incentives. India has emerged as one of the 5th largest wind power producer in the world — behind China, US, Germany and Spain.
Wind energy and IndiaThe onshore wind energy market is expected to expand at a CAGR of 29.6 per cent during 2014 to 2020, and India is going to be an important part of it. According to Tata Power, “India has a huge wind generation potential and that is far from being exhausted.”Indian Wind Energy Association (InWEA) reports that the onshore potential for utilisation of wind energy for electricity generation is of the order of 1,02,788 MW. With the current figures of 21,262.23 MW, India has just used 21 per cent of its wind generation potential.
Even Bihag Mehta, Manager – Renewable Energy (Advisory), SgurrEnergy India Pvt. Ltd. thins the same. He explains that India has a huge potential for the development for the wind farms, unfortunately Indian climate is not blessed with high windy zones.
However, with the new WTG being developed, we would be in a better position to harness the low wind regime zones.
ChallengesDespite being technologically mature, the wind energy sector is facing numerous challenges. “The high wind zones have almost been exhausted,” shares Tata Power. “The new installations have to be set up on low and medium windy sites that provide low generation. The cost of land adds to the woes and remote locations have accessibility issues.
Other major challenges in the sector include insufficient grid infrastructure and grid connectivity, environmental, forest clearance, unattractive incentive policies from the government and absence of an integrated policy framework.”
According to Mr Mehta, “With the current wind farm sites are mostly of complex terrain, the industry, developers and financial institutions need a proper technical guidance and knowledge to make the right choice of the project development. On a broader way, they need an expert technical solution provider for the complete project lifecycle (right from the carrying out wind measurements till commissioning of the WTGs). This would definitely mitigate the key risks associated with their projects.”
According to Tata Power, “The introduction and discontinuation of various fiscal incentives create confusion among the investors. For example, the generation-based incentive (GBI) was announced in 2011 and then discontinued in 2012. In 2013 Annual Budget, it was introduced again. Then accelerated depreciation, originally introduced in 2002, was discontinued in 2012 and then reinforced in 2014. The Renewable Purchase Obligations (RPO) needs to be enforced that will give further boost to the sector.”
Government’s approachThe wind energy sector got much needed boost after the new government restored key tax incentives like GBI and accelerated depreciation (AD) in the recent budget.
Mr Mehta opines, “One of the major concerns over the last few years, wherein the industry has been really very low on the development, has been the non-clarity on the incentives from the Government, particularly on the GBI and AD. The need of the hour is that the government needs to come up with a good wind energy policy and make an significant effort on the grid system as well as make it capable of handling the recent and future developments of the large wind farms.”
He also adds that government’s recent clarification on the continuation of the AD as well as the increase the cap on the GBI would surely attract more investments.
“The government is also aggressively aiming at increasing the wind energy generation by making an addition of 10,000 MW every year,” describes Tata Power. “The ministry has proposed a joint study on the status of grid availability in six states with maximum wind velocity along with the wind turbine manufacturers. These tax incentives and new policies will help boost the wind energy sector.”
The government is also promoting wind power projects through private investment by providing fiscal and promotional incentives such as concessional import duty on certain components of wind electric generators, excise duty exemption to manufacturers. A 10-year tax holiday on income generated from wind power projects is also available. Loans for installing windmills are available from Indian Renewable Energy Development Agency (IREDA) and other financial institutions. Technical support including wind resource assessment is provided by the Centre for Wind Energy Technology (C-WET), Chennai.
Future outlookMadhusudan Khemka, Chairman, IWTMA, says in an interview that wind turbine makers are capable to meet proposed higher targets of the government. According to him, the higher volumes will bring down average cost of installations and even tariff to make wind power more attractive. India would be able to attract domestic investments in the sector if the government resolves the issues related to wind power evacuation and renewable power purchase obligations of the state utilities.
The Indian wind energy sector witnessed a slowdown in 2013, however, the introduction of conducive policies makes the sector friendlier towards private participation.
Off-shore windThere is rarely any concrete development in this sector. “We need to start the detailed feasibility studies being carried out,” explains Mr Mehta. “It will take another 2-3 years for India to be ready for its first off-shore wind farm. As the development of an off-shore wind farm is very complex, the government needs to come up with a concrete plan for the development of off-shore wind farms.”
Power playersAmong the Indian power players, Tata Power has a gross installed capacity of 8,613 MW, out of which green energy sources generate 1,206 MW. The total operating capacity from clean energy source are 461 MW from wind farms, 54 MW in solar generation, 447 of hydro and 240 MW from waste gas based generation. Tata Power is working towards achieving a 20-25 per cent contribution in power generation from ‘clean power sources’, which would include a mix of wind, hydro, solar, geothermal and waste gas generation.
In the current year, Tata Power has set a target of commissioning at least 150 MW of wind farms and 50 MW of solar projects.
SgurrEnergy, a Glasgow-based renewable energy pioneer, offers an impartial, pro-active assessment of any renewable energy project irrespective of the stage of development. Through its expert team and implementation of the latest technologies on wind measurements (LiDAR device and measurements carried with this device) and new methodology and approach towards energy yield analysis, SgurrEnergy has been able to achieve to reduce the overall uncertainties from 14 per cent to 3-4 per cent.
The Indian wind energy sector witnessed a slowdown in 2013, however, the introduction of conducive policies makes the sector friendlier towards private participation.
