The Hindu Business Line : ‘…answer is blowin’ in the wind’

With tremendous potential and a headstart in wind energy, if the initiative in India has died down, the reasons range from government policies to tariffs, and State-specific issues to general apathy.

Approach to not just wind energy, but to the renewable energy sector as a whole, needs to change.

N. Ramakrishnan

“It has been disappointing because India was so much ahead in this industry some years ago. But things have slowed down. I think India has wonderful potential if the country wants to go ahead. In India we still have a private market; one man buying one turbine, instead of what you see in China, where people are buying wind farms. I think this is what we need to see going forward. The future world of wind is not one man buying one turbine. It is the big companies developing bigger parks.”

These words of Mr Ditlev Engel, President & CEO, Vestas Wind Systems, a leading wind turbine manufacturer, during a recent interaction in Denmark, best sum up the status of the wind power industry in the country today and the dilemma that wind turbine manufacturers and developers face.

For the past few years, everyone who is someone in the wind power industry in India has expressed the view that the tipping point is just round the corner, after which the industry can only grow. But ask why that has not happened still, when China, a later entrant, has overtaken India in all parameters — total installed capacity, annual addition and even in the number of equipment manufacturers — and the answers are almost the same. Starting with a shrug of the shoulders, they range from government policies to tariffs to local issues in different States to a general apathy.

Despite these problems, the face of the wind power industry in the country is changing, albeit slowly. From, as Mr Engel pointed out, one buyer installing one machine (mainly for captive uses), the concept of wind farms has taken off, especially in Maharashtra, Gujarat and Karnataka, where the tariffs are higher than in other States.

Many companies have either invested in large-sized wind farms or have announced plans to do so. These are Roaring 40s, a joint venture between CLP (formerly China Light & Power) and Hydro Tasmania; BP, the Anglo-Dutch petroleum company that has announced huge investments in renewable energy; Acciona of Spain, which has a global portfolio of 3,500 MW of wind power; and domestic entities such as Tata Power, Reliance Power, NTPC and ONGC.

New manufacturers

Another significant change taking place is the entry of new turbine manufacturers — such as WinWind, a Finnish company now owned by Sterling group of Mr C. Sivasankaran, Regen Powertech, Leitner Shriram, Lanco Infratech and Ghodawat Industries — all of them with MW-class machines, or turbines with a capacity of 1 MW or more.

Significantly, with the good wind sites taken up, these machines are designed to operate in low to medium wind-speed conditions, where the mean average annual wind speed ranges from lower than 7.5 m a second in the case of low wind-speed sites to 7.5-8.5 m per second for medium wind-speed sites.

The new manufacturers are upbeat; their contention is that they will help India realise its potential of adding at least 4,000 MW a year of wind capacity against the 1,500 MW it has now. They say that with such a target, the leader — Suzlon — can control up to half the market and the others about 200 MW each, which, the new companies feel, is a healthy capacity.

However, the established players view this differently. They feel a further fragmentation is likely, resulting in some of the weaker players winding up operations.

Delays and half-measures

At the back of all this is the worry about the impact such an eventuality will have on the sector, as a whole. “The scar runs deep,” was the telling observation of a senior executive of one of the new manufacturers, referring to the early 1990s, when turbines were often installed only for the tax benefits that were on offer, and a large number of them failed, because of which all those in the sector were tarred with the same brush. That the sector is still to erase that stigma is also a sad reflection on the industry as a whole.

It is not as if things are not happening in the wind energy sector. It is just that they are happening too slowly and in half measures. Take, for instance, the recent Government move to offer a generation-based incentive of 50 paise a kWh of electricity generated from wind turbines. This would be over and above the tariffs paid by the State utilities and was meant only for those that sell electricity to the grid and not consume the power themselves.

This move was widely hailed. But the problem was that the incentive was available only for 50 MW of wind capacity, when the demand for the incentive was much more. The industry, which had managed to get this incentive after hectic lobbying, is once again back to lobbying with the Ministry of New and Renewable Energy.

Everyone is convinced that the 50 MW limit makes no sense and the incentive should be given to all wind power projects that satisfy the eligibility criteria. The money for this incentive was to come out of the Ministry’s budgetary allocation and, hence, did not pose any extra burden on the exchequer. But the approval for removing this ceiling has not yet come, and the industry is waiting.

Approach to renewables

It is the time taken to put things in place, even after the decision-makers are convinced of the need for such a move, that is irksome. Electricity is in short supply, so is capital. Combine this with an aversion among investors to taking risks in the present economic scenario, there are bound to be delays in executing projects. Add to this the policy uncertainty or inconsistency, and the problems get further magnified.

Industry experts say that the approach to not just wind energy, but to the renewable energy sector as a whole, needs to change.

Wind, by nature, is not meant to completely replace conventional sources of power generation. It is always conventional sources (thermal) plus wind.

Power planners and policy-makers can no longer look at the power sector as only thermal power (including coal and gas) and nuclear power (that will take an even longer time to materialise). They need to look at energy sources in totality.

For this, says Mr G. M. Pillai, Director-General, World Institute of Sustainable Energy, a Pune-based not-for-profit organisation working in the field of renewable energy, a drastic change in mindset is required.

That is what the industry will have to work harder to achieve. Till then, wind energy will always remain on the fringes.

( blfeedback@thehindu.co.in)

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