Wind energy players’ woes pile up

Twesh Mishra New Delhi | Updated on November 04, 2019 Published on November 04, 2019

Dilution of renewable energy purchase norms, competitive bids system hit projects

The dilution of renewable energy purchase norms and introduction of competitive bids have hit the wind energy sector hard. The latest casualty due to the unfavourable winds faced by the sector is Inox Wind’s manufacturing facility at Rohika.

In a statement to the stock exchanges, after news reports of a lockout, the company maintained that the shutdown was declared because of fears that certain employees, under the instigation and influence of external forces, could create disturbance in the Blade Plant.

But the company’s letter to the Gujarat government, declaring the lock out, said the overall wind industry in India is going through “a very tough phase”.

The wind energy sector has been worried over lower capacity utilisation of domestic manufacturing facilities and a dearth of projects being bid out for setting up generation capacity. Some industry representatives point out that while capacity addition in the solar sector has grown by over 10 times from 2014 levels, the growth of wind is hardly 1.5 times.

This gloom reflects in the Centre’s own long-term renewable purchase obligation (RPO) trajectory for solar and non-solar sources of renewable energy. The RPO is the minimum percentage of power, of the total energy requirement, to be procured by a power distribution company from a renewable energy sources.

Solar purchase obligation, which was at 2.75 per cent in 2016-2017, is projected to rise to 10.50 per cent in 2021-2022. But wind purchase obligation, is set to rise from 8.75 per cent in 2016-2017 to 10.50 per cent by 2021-2022. The switch to the tariff-based competitive bidding system for wind energy has also stunted the ecosystem for developers and manufacturers. During auctions held in February last year, minimum tariff fell by over ₹4 a unit to ₹2.43 a unit. While tariffs have not fallen further, the subsequent auctions saw a cap below ₹3 a unit being fixed for bids.

“This substantially curtails the margins of manufacturers and is extremely detrimental for the domestic industry. Unlike solar, wind equipments are largely manufactured in India. So it feels that the government would rather let Chinese manufacturers thrive by promoting solar over wind,” another wind sector representative said.

Published on November 04, 2019

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.