‘Regulatory regime, policy framework have given the momentum'

Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Energy Ltd, a leading wind turbine manufacturer, spoke to Business Line over telephone about the wind power industry in India, the prospects and challenges. Excerpts from the interview:

On prospects for wind power:

The Indian economy will continue to grow at 7-9 per cent. That is a great opportunity for us as we will need more energy. Today, there is a peak deficit of nearly 15,000 MW. Not all of this can come from conventional power. Therefore, there is enormous growth opportunity for renewable energy, particularly wind.

In 2010-11, we would have added about 2,200 MW of wind power. I expect that this will increase to 3,000 MW a year. The regulatory regime and policy framework have given good momentum.

Growth in the industry is driven by captive users that use wind power to hedge their power costs; feed-in tariffs that have made wind energy more attractive; and, independent power producers are coming in good numbers. Besides, the renewable energy certificate and generation-based incentive have helped. The projects have become more bankable.

In the next 10 years, I estimate that 30,000 MW will come from wind power alone; that is about 3,000 MW a year. I don't think it is going to go beyond that. There is a huge constraint on evacuation. The grid infrastructure is a major barrier as the State utilities cannot invest in advance.

I estimate the total potential for wind power at 60,000 MW (against 45,000 MW estimated earlier). Advanced technology is giving more viable projects. But the land area that is required will be determined by the rotor diameter. There is good potential for offshore, but that will take another five years for it to start. We are not yet equipped for offshore wind projects. There is no regulatory framework for offshore projects.

Areas that need attention:

State utilities have to take pro-active steps to invest in the grid — install transmission lines and sub-stations in the areas with good wind potential. States must prepare a master plan for the next 10 years. This infrastructure can be useful for the consumers also.

Interest cost is high. The present rates are high, especially in a capital intensive industry like ours. The Government must look to bring down interest rates by 4-5 percentage points. We would also recommend to the government to collect a carbon cess — say, five paise a kWh — on coal- or oil-based power generation, and that money should be available to the State utilities to invest in grid infrastructure.

The government must ensure that outdated technology is not brought into the country, as it will harm the industry once again. An inferior product will result in a loss of generation. Local manufacturing will create jobs and also help customers in the lifecycle management of the product.

The Government should look at what China has done to promote local manufacturing of turbines and parts. If I am to sell in China, I have to manufacture the product locally.

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