India's wind energy capacity addition is set to improve by 3-3.5 GW in the current financial year against 1.7 GW in last fiscal due to the viability of bid tariffs & inter-state connectivity key headwinds for developers. MNRE along with the distribution utilities in Gujarat, Maharashtra & Tamil Nadu have awarded wind-power capacity of 7.6 GW over the past 15 months & another 10 GW each are proposed to be awarded in FY’19 & FY’20. This is in line with the trajectory of project awards announced by MNRE in Nov’17 to achieve the cumulative wind capacity target of 60 GW by FY 2022. The winning bidders in these auctions face the twin challenges of project viability at the quoted tariffs & securing connectivity & long-term access to inter-state transmission network. While the regulations recently notified by the CERC on connectivity for renewable energy projects are positive for these developers, the adequacy of the existing inter-state transmission Infra. in the states with high wind potential remains a challenge. The connectivity regulations recently notified by the CERC provide clarity on the procedure & timelines for securing connectivity from the central transmission utility & accord priority to projects holding a letter of award under the tariff-based competitive bidding. However, the uncertainty on the availability of adequate evacuation Infra. persists, given that the existing inter-state transmission Infra. in the states with high wind potential may not be sufficient to provide connectivity to the projects bid out so far & proposed bids by the SECI. Moreover, the augmentation of transmission Infra. would take about 24-36 months, whereas the winning developers must commission the wind power projects within 18 months from the date of award. The significant decline in order volumes during the transition from feed-in tariff regime to competitive bidding regime, coupled with pricing pressures, had an adverse impact on the financial profile of the wind turbine manufacturers. This remains a concern for the wind power IPPs using the services of such players as O&M contractors, given that the weakening of the financial profile would affect their ability to ensure machine availability for the wind farms, ICRA added.

Wind Power has witnessed steady growth in the last few years, with the country boasting of the fourth largest installed capacity globally after China, USA & Germany. As of Mar’17, it contributed a staggering 56% to the total renewable energy generated in the country which stood at 32.28 GW. As India plans to reach 175 GW of renewable energy by 2022, wind energy will be a major contributor, contributing 60 GW to this expansion plan. Estimates show that India’s wind potential is 302 GW & India Energy Security Scenarios 2047 show a possibility of achieving a high of 410 GW of wind. In 2016-17, India added a record 5.4 GW of wind power capacity, surpassing the target of 4 GW. India’s wind power installations accounted for a 6.6% share of the global market in 2016. Wind power capacity accounted for over 9.1% of total domestic installed capacity. India’s well-developed wind power industry has the capability & experience to help meet the country’s climate & energy security goals. International player such as Vestas, Enercon, Gamesa & GE Wind are operating several projects in the country along with domestic players including Suzlon, Wind World India & Inox Wind.

This year, India left behind the US to take the second spot on a list of the world’s most attractive renewable energy markets. FDI up to 100% is permitted in the sector & during Apr’14 to Mar’17, the sector received FDI worth USD 2.2 Bn. MNRE wind power programme covers wind resources assessment, facilitation of implementation of demonstration & private sector projects through various fiscal & promotional policies. Ministry is specifically supporting the production of equipment to develop the wind energy sector in India. Currently, the annual production capacities of domestic wind turbines stand at 10,000 MW with around 21 wind turbines manufacturers in the country. Wind Resource Assessment (WRA) Programme is an ongoing activity, being coordinated by the NIWE, Chennai in association with State Nodal Agencies. WRA has so far been covered in 29 states & 3 Union Territories involving establishment of about 809 dedicated wind monitoring stations. Out of the total stations established so far, 252 stations have shown potential for commercial wind power installations & 30 stations are presently in operation as on 31 Dec’16.

Various preferential & promotional tariff schemes along with interstate transmission charges waivers are being implemented in an association with multiple SERCs to ensure swift distribution of wind energy through electricity grids. MNRE, in association with its Human Resource Development is planning fellowships, grants, stipend & research projects to develop high quality work force for the sector. The Ministry is supporting R&D proposals from R&D institutions, Academic institutions & companies in the thrust areas of small wind energy & hybrid systems through a separate budget head from 2014-15. Currently there are 13 ongoing R&D projects through this programme. After receiving a significant success in setting up wind farms in various windy states of India, the country is all set to explore offshore locations for wind energy through innovative ways. National Offshore Wind Energy Policy will explore possibilities of developing wind farms around India’s coastline. Comprehensive Guidelines for Development of On-shore Wind Power Projects in the country were formulated & issued in 2016. To get best out of both solar & wind energy, the country also aims to achieve 10 GW of electricity through wind-solar hybrid plants by 2022. A package of incentives which includes fiscal concessions such as, concession in custom duty for specific critical components, excise duty exemption, special additional duty exemption, income tax exemption for 10 years on profits for power generation, etc. is also being provided for promotion of wind power in the country. Govt.’s efficient policy ecosystem & participation of private sector will lead India towards sustainable energy security.

Although doubts have been raised on adding sufficient wind power capacity, industry insiders are confident India will install 60 GW well before the 2022 deadline. India’s wind power industry says it will install 60 GW of capacity by 2022. Ever since the Govt. announced an ambitious target of installing 175 GW of renewable energy capacity by 2022, relying mostly on solar (100 GW) & wind (60 GW) power additions, experts have often expressed misgivings on whether India can achieve its aims. Despite the challenges faced by the wind power sector, the IWTMA has announced that the industry will meet the Govt.’s target ahead of the 2022 deadline. The domestic wind market is on a growth path in the competitive bidding regime & there is an increased demand for clean energy, which has now become a reliable, affordable & mainstream source of energy. Industry has regained momentum & there is a clear business visibility of 10-12 GW even before the start of this financial year with announcement & plan of bids by MNRE. The industry is confident of the Govt.’s continuous support. There are some who are not so sure about the numbers being met. A consultant in the clean energy industry feels that there are no off-takers because the demand is not there. When you want the 60 GW target to be achieved alongside 100 GW solar, it is difficult to envisage a scenario under which 60 GW wind capacity will come online, since the demand is not growing at the same pace.

However, industry veterans say the scenario is not all that bleak & the figure may still be achievable. The installed capacity of wind power in India is 34 GW, & another 26 GW needs to be achieved by 2022. The performance of the wind industry has not been remarkable in recent times, as only 1.77 GW has been installed in FY 2017-18. Accelerated Depreciation (AD), which was the main driver of investment in renewable energy, & most of it in the wind sector, has been brought down to 40% from the earlier 80%. As of now, it’s only the SECI bids where people are coming forward to install, since SECI will procure clearances. For people to bring investment into the sector, I think the finance minister has to restore the incentives, when the target of 175 GW was fixed, 80% AD was in place. If AD is restored, then the private sector will come forward to install windmills. Hence, the restoration of incentives is very important.

In financial year 2017-18, the wind industry saw a transition from the Feed-in-Tariff (FIT) regime to the competitive bidding regime, & hence, there was a temporary drop in volumes. The FIT regime; long-term contracts & guaranteed pricing tied to costs of production that the Govt. offers to cover risks & encourage investment; was the preferred model in India, but that has changed to auctioned bids, which has been driving down tariffs. Lower tariffs eat into energy producers’ profit margins. The industry is now on a growth trajectory with a healthy order pipeline, owing to auctions by SECI of some 6 GW & state level bids in Tamil Nadu, Gujarat & Maharashtra worth 1.5 GW, Tanti said. With another round of SECI auctions, bids are expected for 4 GW this month. Volumes are set to grow exponentially with some 10-12 GW auctions each year from SECI & state bids combined, as well as from projects less than 25 MW based on a determined tariff. At the current rate, the wind industry is on course to add around 30 GW of new capacity in the next three years, thereby taking the cumulative total capacity to about 60 GW by financial year 2020-21.

So far the Govt. has announced bids for 7.5 GW of wind power & another 10.9 GW is in the pipeline. This gives a clear visibility signal for installation to achieve 60 GW by 2022. However, reverse bidding has put pressure on the value chain & the viability of projects is under threat. This may seriously affect fresh domestic capacity addition. Bankers are reluctant to fund on issues of long term sustainability & aggression of reverse bidding may disturb product quality. The driving down of tariffs, he believes, will eventually place a serious threat to micro, small & medium enterprises & the component-manufacturing sector. The industry strongly recommends use of closed bidding as a preferred procurement process as done in defense Infra.. Several countries have adopted feed-in tariff or closed bidding. But the success rate of reverse bidding has not been seen. The MNRE has asked the IIM Lucknow to study the pros & cons of reverse & closed bidding.

The statement from IWTMA adds that there is a clear visibility of continuous volumes in the coming years, which will signal gradual stabilization of tariff, which will also depend on wind power regimes in different states. We are seeing large scale projects of 200 MW to 300 MW capacity, which brings in advantages of scale at project level, leading to cost optimisation thereby benefitting working capital of companies. Technological innovation is playing a big role as manufacturers are working towards bringing down the Levelised Cost of Energy (LCOE) & increasing PLF. The next-generation turbines from leading manufacturers can deliver around 35-40% PLF in high wind states, which is almost twice the PLF compared to solar. Sector experts say that large projects are likely to bring in advantages of scale at the project level, leading to cost optimisation & benefitting the working capital of companies. The advantage of scale in wind projects will eventually come in large volume of capacity addition, beyond 7,500 to 8,000 MW per annum on a year-on-year basis. This volume game is likely to help the entire value chain. Wind projects need to be looked at the levelised cost of energy delivered rather than capital expenditure on equipment. What is required is sustainability of business with a meaningful tariff, which alone will attract investment, both in equity & debt.

Although India has gone ahead with its plans to install the first offshore wind park by inviting expressions of interest, industry experts said installing offshore capacity would not be easy. Renewable energy in India is set to get another boost as the country plans to install giant wind turbines in the sea. In its latest move, the Indian Govt. has fixed ambitious targets to develop offshore wind energy, which is a first for the country. The Govt. recently announced medium- & long-term targets for offshore wind power capacity additions- 5 GW by 2022 & 30 GW by 2030. Apart from boosting India’s ambitions of increasing the portion of renewables in its energy mix, the initiative has also been taken to “give confidence to the wind industry. Ministry had recently invited Expressions of Interest (EoI) for the first 1 GW offshore wind project in India, which it said has evoked a “keen response” from both Indian & global firms. The Govt. had already notified its National Offshore Wind Energy Policy in October in 2015 to realize the offshore wind power potential in the country. Since then, preliminary studies have been conducted in two regions off the coasts of Gujarat in the west & Tamil Nadu in the east. In Nov’17, Facilitating Offshore Wind in India (FOWIND), an industry consortium led by the GWEC, commissioned the country’s first offshore LiDAR offshore Gujarat to measure the offshore wind resource in a chosen area. The FOWIND project also includes the Centre for Study of Science, Technology & Policy (CSTEP), international registration organization DNV GL, the Gujarat Power Corporation Ltd (GPCL), the World Institute of Sustainable Energy (WISE) & the National Institute of Wind Energy (NIWE). LiDAR, short for light detection & ranging, is an instrument to measure various parameters of wind such as speed, gust, etc. Another LiDAR has been installed by Suzlon Energy Ltd offshore Tamil Nadu.

Earlier, FOWIND released a feasibility study for offshore wind farm development in both Gujarat & Tamil Nadu that gave a concept design for demonstration projects ranging from 150MW to 504MW in the most promising wind-abundant area of the seas. In addition to this, the reports analyzed 4, 6 & 10MW turbines, in terms of project cost & energy cost to help identify key project risks. According to the Govt., preliminary studies have indicated good wind potential for offshore wind power both in southern tip of the Indian peninsula & the west coast. More surveys to study oceanographic & seabed conditions within the identified zones are now in the pipeline. Offshore wind power is being seen as a new element to the already existing basket of renewable energy for the country. But MNRE has acknowledged that the road ahead is challenging. “While this (offshore wind power targets) may look moderate in comparison to India’s onshore wind target of 60 GW & its achievement of 34 GW & solar target of 100 GW by 2022, this would still be challenging considering the difficulties in installing large wind power turbines in open seas,” it said in a media statement. “It may be mentioned that offshore wind turbines are of much larger dimensions & capacities than onshore turbines.”

Experts working in the renewable energy field have also given mixed views on the announcement of offshore wind energy goals. CEEW, a New Delhi-based think tank, has welcomed the move, but indicated it could be too early to bank upon it. The recently announced offshore wind targets are a signal of the Govt.’s continued commitment to renewable energy. Expanding the sources of clean energy generation will become increasingly important as the share of renewables in the electricity mix increases. However, she added, “The Govt. must have detailed implementation plans backing big announcements. India is yet to commission any offshore wind energy. While interest in the first 1 GW offshore wind project off the coast of Gujarat has been significant, there is yet to be any bid or even pre-bid activity. It might have been more prudent to take lessons from the 1 GW proposed project, & ascertain the feasibility of the prices bid by market players, before making any large announcement. Even if the project seems feasible on paper, the situation might be different on ground. The technology may have potential but I am not sure if the ground situation & technicalities may have been studied properly. For example, the marked area at the southern coast is very close to Adam’s Bridge, which is ecologically fragile. It is also a prime fishing area. I am not sure if they have exercised precautions when it comes to fishing rights or if the rights of the local communities have been accounted for. A project like this requires big Infra., underwater cabling & transmission Infra.. We don’t know if environment impact assessments have been done.

The commercial viability of offshore wind energy projects is doubtful, especially with the solar power being cheaper & user-friendly. Offshore wind in our country is really expensive. Because solar power has come, offshore won’t be able to complete. As a demonstration India should do it, but financially it is not a viable option yet. First of all, we don’t have the technology & we will have to import it. With solar prices touching INR 2.65 (4 US cents), it is easier to get investors for solar. Chinese manufacturers are aiming for cheaper solar panels in the market & wind power won’t be able to catch up that easily,” he explained. “If solar prices don’t get reduced significantly, then there is still a chance for offshore wind. The Govt. has announced the targets, but the projects can take place only through private investment, & it will depend entirely on solar power cost. Globally, about 17GW offshore wind power have been installed by countries such as the UK, Germany, Denmark, the Netherlands & China. Some of these markets have also witnessed fall in offshore wind tariffs. While for India, installing offshore wind project would be a feather in its cap, but it would be challenging to ensure commercial viability of the technology, at least in the near future.

India is the world’s fifth largest wind power producer & these wind energy facilities are installed in eight major states across India, Tamil Nadu, Gujarat, Maharashtra, Karnataka etc. India has largest windmills facilities & the locations are Tamil Nadu windfarm at Tuticorin, Coimbatore, Kanyakumari, Thirunelveli & Tiruppur. Other well-known windfarms or windmills in India are located at Sangli & Satara District of Maharashtra, Kayathar, Tirupur, Kanyakumari, Kethanur in Tamil Nadu & Dewas Wind Farm in Madhya Pradesh.

Muppandal is a small village in Kanyakumari District of Tamil Nadu & one of the most important site of wind farm in the state. It uses wind from the Arabian Sea to produce renewable energy with the total capacity of 1500MW which is the largest in India.

Jaisalmer Wind Park is the largest operational onshore wind farm in India,located at Amarsagar in Jaisalmer district of Rajasthan. Its installed capacity of 1,064 MW which makes it one of the largest wind farms in the world & largest of its kind in India.

Wind power project at Brahmanvel in Dhule district of Maharashtra has 32 wind turbine, There are many more Wind Farm in the state of Maharashtra such as Andhra Lake Wind Farm, Wind Power Facility Sangli & Ratnagiri Wind Farm.

The coastal state of Odisha has higher potential for wind energy & Damanjodi Wind Farm is one of the largest in the state. It has 99 MW wind power project in Orissa by Suzlon at Damanjodi in Koraput district.

Tuppadahalli wind park is located in the state of Karnataka,located about 55km from Chitradurga & 260km from Bangalore. 56.1MW power project produces 140GWh of clean energy per annum,The state of Karnataka is rich in wind farms compared then other states of India.

Other wind power production facilities in India are Dhalgaon Windfarm of Sangli, Vankusawade Wind Park in Satara & Vaspet Windfarm of Maharashtra, Beluguppa Wind Park & Anantapur Wind Park in Andhra Pradesh.

 

Amid a major overhaul of the wind energy tariff-determination mechanism, multiple policy issues, & flat power demand, capacity addition took a big hit in the last financial year. New windmill installations fell to a five-year low between April 2017 & March 2018, according to data from the Indian Wind Turbine Manufacturers Association (IWTMA). The country saw an addition of just 1,762 megawatts (MW) of capacity, a sharp fall from the record high of 5,400 MW in the preceding year. India’s total wind energy capacity now stands at 34,042 MW, a little over half the Narendra Modi Govt.’s target of 60,000 MW by 2022. The fall was largely due to faulty implementation of a major policy change by the Govt.. Starting June 2016, it let firms bid for projects at competitive prices rather than have a regulator fix the tariffs. Yet, there weren’t as many auctions for projects, resulting in muted capacity addition. Subsequently, wind power producers faced the threat of various state electricity utilities backtracking on power purchase agreements.

Then there was the confusion over the generation-based incentives (GBI) scheme, where firms are paid a certain amount for every unit of wind energy generated. For the new financial year, suddenly, the GBI was withdrawn, & then mid-year again some money was allocated. This caused a (slowdown) & was a big blow for wind. The Govt.’s obsession with solar power, too, played a role, as policymakers focused away from wind. Meanwhile, wind power tariffs crashed to record lows of Rs2.43 per unit in December 2017, casting doubts over long-term project viability.

States like Maharashtra & Gujarat have already come out with auctions & more are in the offing, both at the state & central levels. The ministry of new & renewable energy has committed to auctioning 10,000 MW of projects in 2018 & another 10,000 MW in 2019. Tariffs are also firming up & analysts don’t expect them to fall further & hurt project viability. In auctions conducted by Maharashtra last month, they rose to Rs2.85 per unit from a record low of Rs2.43 in December 2017. Last year wind turbine manufacturers had spare capacity & were ready to supply at lower rates. That was a factor in low tariffs. The excess capacity was a result of the slowdown in new windmill installations, which have since picked up.

India is looking to develop the country’s first 1,000 MW commercial offshore wind farm. By 2022, India wants to install at least 5,000 MW of offshore wind capacity. The proposed site, in the Gulf of Khambhat, raises concern as it is an ecologically sensitive area that supports hundreds of species of plants & animals. Experts believe the project could end up hurting environment & advocate a balance between clean energy & environment. India’s on-shore wind energy sector is often touted as a success story. Now, the Indian Govt. is looking to tap the enormous offshore wind energy potential. The latest move however, could threaten marine biodiversity along India’s coastline. Recently NIWE, an autonomous body under the Indian Govt.’s MNRE called for an “Expression of Interest” (EoI) from domestic as well as international firms for developing the country’s first 1,000 MW commercial offshore wind farm. NIWE is the nodal agency to carry out the necessary studies or surveys before final bidding & is also expected to be the single window for facilitating clearances required for development of offshore wind projects in the country. The wind farm is proposed to be developed in the Gulf of Khambhat, an ecologically sensitive area off the coast of Gujarat. The proposed area is located 23-40 kilometres seaward-side from Pipavav port & the global EoI is intended to shortlist prospective developers. The interested firms have been asked to submit proposals by May 25. The site is also easily accessible from Jafrabad port.

In Oct’15, the Indian Govt. had notified the National Offshore Wind Energy Policy to harness the huge wind power potential along India’s over-7,500-km coastline. By the year 2022, India wants to install at least 5,000 MW of offshore wind energy generation capacity. India is looking to harness huge offshore wind power potential. Areas off the coasts of two big Indian states, Gujarat & Tamil Nadu, have been identified for development of offshore wind power. As per initial estimates, Gujarat coastline alone has the potential to generate around 106,000 MW of offshore wind energy while Tamil Nadu has a potential of about 60,000 MW. Renewable energy, mainly solar & wind power, is the mainstay of India’s massive clean energy programme under which it aims to achieve 175,000 MW of installed capacity of renewable power by 2022. Of those, 60,000 MW is planned from wind power alone. At present, India’s total installed wind power capacity is 32,957 MW. With this move, the Govt.’s target is to develop the offshore wind power sector in India & replicate the success of the on-shore wind power sector. The tariff for the on-shore wind power sector has already touched a record low of Rs 2.43 per KWh, which is even cheaper than solar power. At a global level, it has been observed that offshore wind energy, while being better than onshore wind in terms of efficiency, is also becoming competitive & comparable in terms of tariffs,” reads a Govt. statement. It also emphasises that the move would help India in attaining energy security & achievement of National Action Plan for Climate Change (NAPCC) targets.

The Gulf of Khambhat in Gujarat is one of the important natural systems of the state & covers about 400-km-long coastline, which is about a quarter of the total coastline of the state. Several major rivers of Gujarat like Narmada, Tapi, Sabarmati & Mahi open in the gulf, draining down water & alluvium into it & the adjoining coastal areas. It has an extent of about 3,120 square km of mudflats. According to a report of the Gujarat Ecology Commission, due to its “geographical positioning, physical & oceanographic characteristics, & large human population around”, the Gulf of Khambhat is vulnerable to various anthropogenic activities including rapid industrialization & coastal Infra. development projects such as ports & oil terminals, jeopardizing both ecological as well as livelihood securities along this region. Counted amongst the biodiversity rich eco-systems of India, the funnel-shaped Gulf of Khambhat is home to hundreds of species of plants, animals & birds. Not only has it played guest to several species of migratory birds over the years, but also is home to mangrove stretches.. However, they have suffered serious degradation over last 20-30 years.

With such a sensitive habitat, a detailed & comprehensive environmental impact assessment of the offshore wind power project becomes critical. According to experts, the primary environmental concerns related to offshore wind projects are high noise levels, risk of collisions for birds & effect on marine species. The project could threaten marine biodiversity; affect local ecology & impact birds. Such a project in an ecologically sensitive area should be taken only up after consulting with local public. Experts also question if renewable power projects, which aim to reduce carbon emissions, are green enough. Renewable energy is clean but is it really green? Both wind & solar require the use of minerals. Wind for example requires steel, concrete, fibre glass, copper, cast iron-and mining for both iron ore & sand is energy intensive & also destroys prime forests & wildlife habitats. Renewable energy projects are land-intensive, & we have wind & solar in prime wildlife areas – grasslands in Gujarat & Rajasthan, the Western Ghats & now rich marine areas – leading to destruction of ecosystems. Overall, the project would need clearances from at least 10 separate ministries including the MoEFCC. Before securing clearance from the environment ministry, the project would need an environmental impact assessment study to assess its impact on the environment & biodiversity. It would also require coastal zone clearance from MoEFCC as the area falls under India’s rules governing activities in the ecologically sensitive coastal areas. NIWE has clarified that it will obtain the initial stage-one clearance for development of this project. Interestingly, this is not the first time that a proposal that can disturb the ecologically sensitive area has been envisaged. For instance, the proposal to build ‘Kalpasar dam’, world’s largest freshwater reservoir in the sea, by constructing a 30-km long dam in Gulf of Khambhat has been pending for more than a decade. The project, which costs around Rs 500 to 600 bn, involves storage of more than 10,000 mn cubic metre of surface water, which is 25 percent of the volume of the state’s average annual rainwater inflow.

Offshore wind is attractive but the main constraint for its development in India has been that it can be difficult to build & maintain. According to the GWEC, the global offshore cumulative wind capacity is 18,814 MW & of that over 75 percent alone is installed in the United Kingdom, Germany & China. The Indian market is also now poised to grow, but the question that experts are raising is around the impact of this growth & at what cost should it continue. Clean energy experts believe offshore wind sector is still in a complicated phase & requires a proper environmental impact assessment. Impact on birds is one of the major concerns against wind farms. Wind prices have come down in India & probably that is why Indian Govt. is pushing for more wind power projects. There needs to be a balance with environment. Offshore wind energy projects can be taken to places that are not ecologically sensitive. It is complicated & the sector is still in the initial phase. Basically it is a catch-22 situation & offshore projects require a comprehensive EIA study to proceed. Meanwhile, renewables must undergo both environment & social scrutiny & that certain critical areas must be ‘no-go’. “The way forward is to decentralize decision making on renewables.