Wind power tariffs have touched new lows after price discovery through competitive bidding began.
Wind power tariffs have touched new lows after price discovery through competitive bidding began. Mahesh Palashikar, CEO, Onshore Wind Asia Pacific, GE Renewable Energy, believes that the company’s global experience and technological expertise will help it sail through the transition phase. The wind equipment maker recently forayed into wind farm EPC with a 50 MW turnkey project in Andhra Pradesh, Palashikar says in an interview with Anupam Chatterjee. The company is also preparing to come up with products customised to be set up in places with relatively lower wind speed. Excerpts:
Is GE taking any specific measures to confront the current transition in the wind energy sector?
The biggest advantage GE has in this scenario is that being a global player, we have learnt to prepare for such situations from all across the world. The transition from FiT to reverse auction is a reality across the globe. GE has dealt with similar transitions in the wind sector in Brazil, Germany, Spain and Chile. We have realised that wind tariffs would come down and ultimately technology plays the biggest role in doing so. To that end, we are continuously working on research and development at our centre in Bengaluru. We are coming up with different kinds of value addition solutions. We have realised that as developers use up the most conducive places in the country to set up wind power projects, we are gradually entering a low wind-speed regime. Our technology team in Bengaluru is working on products to cater to such needs.
With power tariffs coming down, do you think equipment makers need to rethink their pricing strategy?
Primarily, to let renewable energy grow, it has to be made affordable. Power producers would ultimately gain when their turbines produce more units of electricity, at lower costs, through better technology. Therefore, we have decided to maintain our focus on providing reliable and sustainable technology to our customers. We have a plethora of value addition services for our customers.
Our life-cycle services solutions help customers improve reliability and sustainability of wind projects. GE also offers financing solutions to customers who need them, as with lower tariffs this is one particular aspect which would play a crucial role in determining the IRRs of power producers. Our wind farm engineering team in Bengaluru analyses the wind pattern in a particular area and suggests the most suitable technology that needs to be adapted so that developers can generate maximum revenue from that place. Our philosophy is simple, if our customers make money, then at the end of the day we will make money.
Of late, equipment makers are participating in wind development auctions to capture markets. What are your views on such business model?
Every company has their own strategic priorities. We intend to keep our focus on our strong points: technology, digital and financing. There are pros and cons of every kind of strategy. We are also foraying into the turnkey project development business. We have started looking into good potential windy sites. There are customers who prefer to be offered a complete package of ready-made projects. We have successfully completed one such 50 MW project in Andhra Pradesh. We will execute these projects in compliance with GE standards. This also allows us to grow further. We believe there is merit in this model. We may not participate in bids ourselves, but our customers can take up such completed projects after they quote the lowest tariff in reverse auctions.
What do you think are the main challenges, policy or otherwise, that the renewable industry is facing today?
The government is extremely supportive to the renewables industry. The industry is going through a transition and we must stay committed and invested as the sector passes this phase. Adaptation and improvisation is the key.
The other challenge that the sector faces concerns the infirm nature of power it generates. Development in the wind-solar hybrid technology might improve the reliability of renewable power. The MNRE is charting documents on the wind-solar hybrid technology. When the policy takes such a pragmatic approach, we believe that solutions to match the policy would definitely follow.
GE has come up with a wind-solar integrated solution at the turbine level and we are still working to improve it. I think storage is going to be the next frontier of technology breakthrough for renewable energy. Our Bengaluru research centre is specifically focused to find a cost-competitive storage solution.