As Wind Energy Finally Crosses 50 GW Milestone, No Time To Rest

geen energy in full development.Increase in electricity prices on the world market.

The March update from India’s Central Electricity Authority finally confirmed what was expected. The breaching of the 50 GW milestone by India’s wind energy developers. With Fy25 seeing fresh additions of 4.15 GW, the industry saw one of its best years, even though the all time best seen in 2016-17 still seems a tough target to reach. In fact, it was only in 2022 that Solar actually overtook Wind capacity in India. And consider how Solar crossed 100 GW recently.

During this time much has happened to change the shape of the Renewable Industry altogether. From the rise of Solar, to the emergence of battery storage, wind developers have seen wind relegated to the background, before surging back on the back of Hybrid projects, and now , once again, considering the impact of dropping storage prices. If Tamil Nadu was the star in the pre-2020 period for India, it has undoubtedly been Gujarat which has taken pole position post 2020, after overtaking Tamil Nadu in wind capacity by 2023.

In FY 25, Karnataka surged again after years to add the highest capacity of 1,331.49 MW,  taking  its total installed capacity to 7,351 MW. Former leader and neighbour Tamil Nadu added 1,136.37 MW, to take its own total to 11739 MW. Gujarat, added 954.76 MW to take its total capacity to 12,677 MW. Looking ahead, Tamil Nadu should start seeing an easy way to ramp up capacity if policy permits, by repowering older wind turbines a little before the end of their formal life cycles possibly.

Hearing Industry leaders at analyst calls and considering their order books, it seems quite possible for wind energy to add 6-7 GW annually in India at least till 2030. It could be even higher, but for multiple issues crimping growth. As always, a key issue is price, where low proces from solar and falling storage prices are raising questions once again about the viability of wind energy. With state discoms reluctant to enter into long term agreements for renewable energy priced over Rs 3.25 levels, wind has its best chance to shine in hybrid projects with solar.  Slowing monsoon winds has also led to some disappointments on the generation front for many developers, so much so that they have begun to provide wind generation projections with a caveat. Land acquisition for projects remains an issue despoite all the efforts made to improve it. Finally, the phasing out of the ISTS charges from July 1 this year will certainly lead to a slight rise on costs, which will further pressure deal closures.

What is going in wind’s favour is of course the rising size and consequently economics of the new turbines on offer, with 3 MW the new normal. While unproven, challenges should be far more manageable in onshore wind, than offshore. Moreover, cost pressures will ease as adding renewables becomes non-negotiable in many cases with stricter carbon tax regimes coming into place in key markets like Europe and beyond.

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What seems certain is that the 100 GW target for 2030 remains doable, but subject to concerted policy support and an accomodating market both in terms of rising demand as well as the health of discoms.

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