Wind power industry set to get a shot in the arm

Indian wind power industry, driven mainly by the private sector like IT, is on the threshold of a major expansion in turbine manufacturing and installation of power generation capacity with the entry of new players and substantial foreign direct investment. With an installed capacity of 8,748 mw, it is the fourth largest in the world, next to Spain, Germany, and the US.

With supportive government polices, the generation capacity could be doubled from the current annual average of 1,500 mw to 3,000 mw, DV Giri, chairman of Indian Wind turbine Manufacturers Association (IWTMA) told FE.

The combined wind turbine manufacturing capacity of 2,500 mw a year by the nine IWTMA members now would be scaled up to 4,000 mw a year with the entry of new players, who have firmed up manufacturing plans, he added.

The policy support sought by IWTMA includes a national renewable energy law, which would mandate a definite percentage of purchase of electricity from renewables by the state utilities, preferably 10%, a generation-based incentive of 50p per unit without any cap or a generation ceiling of 5,000 mw, hassle-free availability of land, a national survey of wind power potential, and permitting intercropping of high-capacity modern wind turbines by the side of the smaller turbines.

The present wind turbine manufacturers in India are Elecon Engineering Company Ltd, Enercon (India) Ltd, GE Wind Energy India, Poineer Wincon Pvt Ltd, Shriram EPC Ltd, Southern Windfarms Ltd, Suzlon Energy Ltd, RRB Energy Ltd and Vestas Wind Technology India Pvt Ltd. These companies manufacture wind turbines with capacity ranging from 225 kw to 2,100 kw.

Indian Wind Power Co, Shiva Windfarms, Chettinad Group, Regentech Vensis, Lanco Infratech, Jyoti group, Bharat Forge and Sterling Infotech are the companies ready to enter the manufacturing of wind turbines.

Spanish wind power major Gamesa and Siemens are also gearing up to tap the Indian wind turbine market.

A large contingent of global wind farm developing companies are waiting in the wings to begin wind power generation as independent power producers (IPPs) and pumping in substantial foreign direct investment. Most of them have already set up shop in India. Some of the well-known are Accion (Spain), China light, Roaring 40?s (Australia), Theolia (France), Skypower (Canada) and Iberdola of Spain, which is planning to develop windfarms in association with Suzlon. They might be looking for farms of 25 mw and more, promising investments of around Rs 150 crore each at the lowest end.

A national renewable energy law with renewable purchase obligation (RPO) would be a major tool in the hands of the government to promote renewable energy generation, Giri said. According to the information given by the minister of State for New and Renewable Energy (MNRE), Vilas Muttemwar, in the Rajya Sabha, between June 2004 and February 2008, 12 State Electricity Regulatory Commissions (SERC) have fixed annual RPO ranging from 2% to 10%.

The first SERC to fix RPO was Madhya Pradesh (10%), followed by Orissa (450 million units), Tamil Nadu (10%), Andhra Pradesh (5%), Uttar Pradesh (7.5%), West Bengal (3.8%), Kerala (5%), Gujarat (2%), Maharashtra (3%, annual increase of 1%), Rajasthan (7.5%), Haryana (3-10%) and Karnataka (minimum 10%).

However, IWTMA feels that there is much to be done. There is no national level policy for wind, no guidelines for determination of tariff for wind as in case of thermal and hydro, only half the states have an RPO and no state, except Maharashtra, has proper implementation or monitoring mechanism. There is also no accounting of renewable in case of transmission and distribution planning.

IWTMA suggests that states with inadequate renewable energy generation capacity should be allowed to purchase it from states with a surplus to meet their obligation. Similarly, utilities should be allowed to collect a surcharge for green power from the consumers.

Giri said a generation-based incentive (GBI) without any cap and revenue neutral to accelerated depreciation is the most essential policy initiative to attract FDI and IPPs. MNRE has initiated a GBI scheme just for 49 mw at 50p a unit. Only grid-connected projects set up in approved sites would be eligible for this.

The chairman said carbon trade and wind power generation would be much more cost-effective and more affordable than the conventional power generation, which involves huge hidden subsidies.