India's Wind Market Not Unwinding Sails

Notwithstanding the ambitious 20,000-megawatt (MW) goal for solar power by 2022, which was unveiled in January with huge dollops of government incentive in the pipeline, the wind power players in India are seeing favorable "wind conditions" ahead.

Yes, solar power has the government status that purveyors of wind power enjoyed until recently. No doubt, they would have preferred longer hand-holding by government in terms of subsidies and tax holidays, both at the federal and state level. But Industrial Info Resources (Sugar Land, Texas) reports that things are going well, with greater acceptance of fair pricing by more than a dozen state governments toward power purchases from wind-power makers. Indeed, a wind-power friendly atmosphere is prevalent across India.

Since coming of age in the 1990s, India is the world's fifth-largest wind energy producer, with an installed capacity of 9,645 MW. During the Tenth Five-Year Plan (2003-07), wind power surpassed the target of 2,200 MW by posting 5,426 MW. In the Eleventh Five-Year Plan (2008-12), the target for wind power is pegged at 10,500 MW. A growing population, coupled with the current scorching pace of growth, is putting enormous pressure on India's energy requirements. A comprehensive non-renewable national policy is in the making to ensure that development does not derail on account of energy deficit, partly explaining the new thrust on solar power.

Of late, wind power is attracting more fresh players. State-owned GAIL India has jumped into the fray recently with Suzlon's help by commissioning its first windfarm with a 4.5-MW capacity plant in the western state of Gujarat. Gamesa, the Spanish wind energy giant, has expanded its Indian operations by investing between $35 million and $40 million in a new manufacturing unit, which will be its 31st production facility worldwide.

Gamesa's bullish chief executive officer, Jorge Corvet, points to a wind turbine manufacturing facility near Chennai in southern India that will have a production capacity of 500 MW a year and will initially produce the G58 series of 850 kW wind turbines customized for the Indian market. The plant will begin as an assembly facility that will make towers by importing all components, such as gearboxes, turbines and generators from its European and Chinese facilities. Being a total turnkey solution provider, Gamesa sells wind turbines and develops windfarms.

Inox Wind Limited has procured the license for a 2 MW, doubly fed induction wind turbine design from energy technologies company AMSC Windtec. Ghodawat Industries India also tapped the American giant for technology. Like Gamesa's Corvet, AMSC chief executive officer Greg Yurek is equally sold on India. He plans to use the huge power grid market opportunity in India for his reactive compensation and superconductor products.

The Centre for Wind Energy Technology estimates the total potential for wind power in India at about 48.5 gigawatts (GW), based on a comprehensive mapping exercise performed across 1,050 wind-monitoring sites. However, the World Institute for Sustainable Energy – India claims the potential could be close to 100 GW, taking into account technological innovation and improvements, and the repowering of old turbines to replace them with bigger ones and greater land availability and expanded resource exploration.

Prominent players in the segment include Suzlon, Vestas, RRB, Enercon, GE Wind, Siemens, Regen Powertech, LM Glassfiber, WinWinD, KenerSys, Global Wind Power, and others. "The positive development of wind energy in India has mainly been driven by progressive state level legislation, including policy measures such as renewable portfolio standards and feed-in-tariffs," said Steve Sawyer, the secretary general of Global Wind Energy Council.

The Reference scenario, derived from the International Energy Agency's World Energy Outlook 2007, assumed a growth rate of 15.5 percent for 2009, falling to 6.5 percent by 2010, and then stabilizing at 3 percent by 2016. By 2020, installed wind energy capacity in India would stand at 20.3 GW, growing to 27.3 GW by 2030, with an annual capacity increase of about 800 MW, according to studies performed recently.

But under the moderate scenario, by 2020 wind energy growth would be 12 percent, and it would be 5 percent in 2025. If the advanced scenario is adopted, a 24-percent growth could be predicted for 2016, and 5 percent for 2026. If these projections turn out be true, then wind energy would be contributing 21.4 percent to 24.2 percent to the national grid by 2030. While the reference scenario forecasts that wind energy contribution would be in single digits (about 2.5 percent) by 2030, moderate scenario projects between 12 and 14 percent in 2030, according to the India Wind Energy Outlook 2009 report that was released a few months ago.

Wind power giants, both existing and new entrants, are bullish. In the light of global warming campaign gaining greater currency, non-polluting and renewable energy generation is bound to be box-office hits with both matured and developing economies. Thermal, hydro and nuclear routes have their own challenges.

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