International wind turbine manufacturers command large production bases in India, which can double as an export hub, particularly to tap the more than 60 gigawatt (GW) of upcoming global offshore wind capacity.

International turbine makers have large production bases in India some of which can also double as an export hub, S&P Global Commodity Insights said in its latest report.

“We expect average annual wind additions (onshore) of around 4 GW between 2024 and 2030. Based on that, the Indian market is already around 4 times oversupplied,” S&P Global Commodity Insights Associate Director of Analysis of Gas, Power and Climate Solutions Indra Mukherjee said.

Export hub

A lot of the manufacturing in India is owned by regionally diversified western turbine makers, who supply almost everywhere outside China and prominently in Europe and the US. This opens opportunities for exports, he added.

Prominent western turbine makers such as Vestas as well as specialist equipment makers like TPI Composites have scaled up and modernised their India manufacturing footprint — priming it as an export hub.

“Exports of wind turbine components in 2023 were nearly twice that of 2019 levels in revenue terms. Export opportunities are more attractive for standardised and labor-intensive components like towers and blades, and is growing for nacelles too,” Mukherjee noted.

“However, not all the capacity is suited for exports. A lot of it is owned by domestic turbine makers who don’t have international orderbooks. Some of the manufacturing capacity is also not optimally located for exporting, he pointed out.

According to S&P Global Commodity Insights top 10 trends in clean energy technology in 2024, global installations of wind and solar will reach one terawatt (TW) across the next two years, taking global installations to 3.5 TW and pressing an urgent need for more flexible power systems. But it is offshore wind that is set for an “unprecedented milestone” year.

“More than 60 GW of new offshore capacity are set to be auctioned in at least 17 different markets — an all-time record high,” S&P Global Commodity Insights Clean Energy Technology Lead Eduard Sala de Vedruna said.

Watch the degree to which the global wind turbine supply market remains bifurcated between China and the West and expect the clean-technology race to continue, Vedruna added.

Solar modules

India leads solar PV manufacturing expansions outside of mainland China.

“India has now significant solar PV module manufacturing to serve the growing domestic market and to export to international markets (mostly US) after success of local incentive manufacturing program (PLI) and duties (BCD),” S&P Global Commodity Insights principal research analyst of gas, power and climate solutions Jessica Jin said.

The world’s third largest energy consumer was heavily dependent on module imports until the implementation of the basic custom duty (BCD) in April 2022. The production linked incentive (PLI) scheme stimulates PV manufacturing and will be central to reach module self-sufficiency before 2026, she added.

Module capacity in India by the end of 2023 was 10 GW more than anticipated at the beginning of the year. New investors entered module manufacturing apart from winners of the PLI rounds, stimulated by both attractive local manufacturing policies and opportunities to manufacture in India and ship to the international markets, especially the US. Another 40 GW of new capacities were already in the pipeline.

The current landscape of costs and competitive prices for solar PV makes it increasingly challenging and expensive to build manufacturing capabilities in the US and Europe and could jeopardise the ongoing localisation efforts.

“India has a privileged position to develop its solar PV local manufacturing base given a) supportive packages for local industry b) mandates to incentivise local content procurement and custom duties c) competitive costs to serve international markets and d) large domestic market to absorb production,” S&P Global Commodity Insights Executive Director of Research and Analysis, Gas, Power and Climate Solutions Edurne Zoco said.