Suzlon Energy Ltd, the country’s largest wind energy company, is on course to add more than 1,200 MW of fresh capacity in the current fiscal, about 40 per cent of India’s expected installation of 3,000 Mw in the wind energy sector this year. The company, which is operating in 32 countries, has so far installed 24,000 MW globally, including over 8,000 MW in India. In FY-14, the company reported a revenue of over ₹21,000 crore. Tulsi Tanti, Chairman of Suzlon Group, says there is huge demand-supply gap in the power sector and renewable energy makes big economic sense. In an interview with Business Line , he said Suzlon’s global customers are interested in investing in India but expect policy consistency and low-risk environment. Edited excerpts:

How do you read the Indian market’s potential for the wind energy sector?

The Indian market is poised for growth in the backdrop of huge demand-supply gap and the importance of building a sustainable environment. More than 350 million people in the country do not have proper access to energy. Therefore, the focus needs to be on how to build and supply affordable energy and also develop a low-carbon economy. The country’s installed base is 270 GW versus 1,200 GW in China.

How much capacity will be added in India’s wind energy sector this year?

The country has an installed capacity of 21,000 MW of wind energy of the estimated potential of 3,00,000 MW. The Government has projected an additional installed capacity of 15,000 MW from renewable sources during 2012-17. But in the last two years, only 3,700 MW has been added. Therefore, we need to accelerate the development pace by offering right tariffs. The technology is quite matured and cost-competitive. It needs some policy push to accelerate the sector growth. Last year, India added about 2,190 MW.

What are your suggestions to drive the sector’s growth?

There is a need to support small and medium enterprises with a captive investment policy, backed by accelerated depreciation. This could be considered in the Budget.

Regulators need to strictly enforce the 10 per cent renewable purchase obligation. The Centre needs to restructure the wind power financing model. The current interest cost is about 12 per cent. With the National Clean Energy Fund, one gets a 2 per cent rebate. Net cost works out to 10 per cent. But it should be about 7 per cent overall. If the cost of funding is low, it’s possible to reduce the tariffs.

The RBI needs to consider offering long-term finance of, say, 20-25 years instead of 12 years now. That will make project finance ideal for project developers. This will mitigate project risk and also attract FDI. Most countries offer 20/25 years financing as there is low risk in such assets.

How much capacity have you installed in the country and what is the outlook for the year?

We have installed over 8,000 MW of the 21,000 MW installed in the country over 15 years. We expect to add 1,200 MW this year.

What about Andhra Pradesh?

We have so far commissioned 200 MW capacity in wind farms in Anantapur district of Andhra Pradesh as of March 2014. By March 2015, we expect to add about 250 MW more at the same location. While the investment in AP so far has been about ₹1,400 crore, we expect to make about ₹1,800 crore investment in the capacity addition.

Are you looking at solar power generation?

At Suzlon, we are looking at developing a hybrid energy network wherein solar panels will be installed in wind energy farms. This will enable us to use the land within wind farms for solar panels.