What is wrong with Indian wind energy industry

At the COP26 summit, India committed to achieving net zero carbon emissions by 2070. While solar energy is projected to be the cornerstone of this shift, wind energy will be important in fulfilling India’s increasing energy demand and meeting this aim.
Over the previous five years, the Indian wind energy business has faced considerable challenges. Solar’s global levelised cost of energy (LCOE) fell at a rate of 11% per year, quicker than wind’s (about 5%), causing customers to gravitate towards solar options due to the rapid LCOE decline and plenty of sunlight in India. Furthermore, the switch in wind pricing mechanisms in 2017 from feed-in-tariff (FIT) to reverse auctions resulted in aggressive bidding from IPPs, hurting margins across the value chain.

While the rate of wind capacity installation has been slower than expected over the last five years, there is growing optimism about the market’s potential, owing to an increased emphasis on hybrid (solar and wind) solutions, select wind-related policy changes (e.g., the introduction of single-stage, closed-envelope bidding), and the focus of large commercial and industrial (C&I) customers on net zero.

As a result, by 2030, India is forecast to add 50-60 GW of wind capacity, bringing total installed capacity to 90-100 GW. The overall annual wind turbine generator (WTG) manufacturing capacity in India is 12-15 GW, partly due to prominent global players expanding their local manufacturing presence. Higher wind project take-up can lead to better capacity utilisation.

WTG OEMs

Given that India is a low-to-moderate wind speed market, specialist WTG technology improvements, such as higher-capacity WTGs and taller towers to harvest wind at high speeds, are crucial. Larger, more resilient turbines can capture more wind, resulting in a higher plant load factor (PLF).
Furthermore, the typical capacity of onshore WTGs installed in India has been 2-3 MW, but Western markets have rapidly transitioned to 4-5 MW WTGs. To increase their attractiveness, OEMs must offer higher-capacity WTGs designed for the Indian market.

OEMs may be able to use their manufacturing capability in India to establish a regional manufacturing base for analogous low-to-moderate wind speed markets in Southeast Asia (Thailand, Indonesia) and MENA (Turkey). This would also allow OEMs to foster innovation and cost savings. OEMs may improve uptime while lowering maintenance costs by leveraging digital capabilities like as remote monitoring, predictive maintenance, and data analytics. These are especially suitable for inaccessible locations (for example, higher towers and offshore WTGs). According to GE, digital interventions can raise WTG uptime by 1%-3%, while predictive maintenance decreases physical stressors and extends WTG lifespan by up to 5 years, according to the International Energy Agency.

Because high-quality land parcels are crucial to harnessing wind energy, OEMs (together with IPPs) must aggressively seek collaborations and discover appealing land parcels in high-wind speed zones that allow for higher PLF. Wind speeds of 7 m/s at 100 m height and 8-10 m/s at 150 m height have been recorded in Gujarat, Andhra Pradesh, Karnataka, and Tamil Nadu.

IPPs

Solar and wind energy, which compliment each other in terms of availability throughout the day and year, can be combined in hybrid projects. IPPs can use wind to supplement solar as hybrid round-the-clock (RTC) energy mandates grow. This allows them to increase their PLF from 20%-25% for solar-only plants to 40%-45% for hybrid plants (up to 60% with storage).

The growing emphasis on net zero targets for businesses, particularly in difficult-to-abate sectors such as metals, cement, and chemicals, makes C&I an appealing customer area for IPPs. Furthermore, certain governmental measures (for example, the Green Open Access governmental) have enhanced the affordability of green power for C&I consumers.

Wind farm construction and operation may create disruptions to local populations. WTGs generate 40-45 dB of noise at a distance of 300 m, bordering the Central Pollution Control Board (CPCB)-recommended residential zone range (45-55 dB). IPPs must negotiate community relations and take initiatives to eliminate irritants (e.g., erecting noise barriers) to secure local community support.

Policy regulators and energy industry authorities

Annual hybrid RTC contracts should be offered by nodal agencies to change IPPs’ choice from pure-solar options to mixes of wind, solar, and storage technologies. They should also continue to enforce measures that help IPPs decrease working capital challenges, such as the “Late Payment Surcharge Rules” adopted in 2022, which helped IPPs collect on time.

WTG plants necessitate vast land tracts in order to construct the necessary facilities. Developers have frequently encountered difficulties with time-consuming land approvals and right-of-way (ROW) concerns, resulting in project delays. Regulators must encourage smooth processes (for example, single-window clearance for land transfers and ROW clearances).

Furthermore, numerous high-quality sites are obstructed by obsolete, low-capacity (1 MW) WTGs constructed during the 1990s and the early 2000s. According to the National Institute of Wind Energy, the overall repowering potential is 25 GW. Authorities must work to put the National Repowering Policy into action in order to replace obsolete WTGs with newer, higher-capacity WTGs. With the availability of WTG production capacity, technological breakthroughs, and rising demand driven by hybrid projects and C&I customers, the wind sector has enormous growth potential. This potential can be realised if key stakeholders participate in the activities mentioned below.

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