REInvest 2020- Decoupling From Solar, Higher Peaking Tariffs Key For Wind Energy

At 38.26 GW of installed capacity till October 3, 2020, India is the fourth largest market for wind energy in the world. Yet, the industry has been overtaken by a sense of pessimism in the past couple of years, as fresh additions have slowed down, and multiple other issues have cropped up. Discussing this, and the way forward, was an eminent panel of Industry leaders, moderated by Ben Blackwell, CEO, Global Wind Energy Council (GWEC).

Each panelist batted for India’s manufacturing prowess in wind energy, where almost 90 percent of components are made domestically now, by firms as varied as Suzlon energy, Siemens Gamesa and GE Renewable energy, besides a 2000 strong MSME supply chain was a key refrain of most participants, Ben started the ball rolling by highlighting that increasingly, the global wind market is looking at India as a hub for equipment and other key supplies also.

Ramesh Kymal, CEO of Wind Power, Adani Green Energy started off by highlighting how the Industry in India could be seen in two parts. Before and after auctions. While auctions had brought the inevitable pricing pressures and caused a temporary slowdown, a good outcome has been in how auction forced consolidation and specialisation. Thus, manufacturers who were also trying to be developers can now focus on manufacturing, and dealing with fewer, but larger, more financially strong clients.

Kymal highlighted how even a faster shift to EV’s might also help Wind generation, as vehicle batteries could be charged during the night time, when wind is strong. in a view shared by all the panelists, he pressed for a special rate of Rs 3 or just around that for wind energy for the next two years, to ensure time for component manufacturers to optimise further.

Sunil Jain, Chief Executive Officer and Executive Director, Hero Future Energies asked everyone to acknowledge the elephant in the room, ie solar. “Today we have 750 GW of solar versus 690 GW of wind. With most of solar growth coming in the past decade”. He raised three key issues. One, due to the unique requirements of wind energy for the right location, large scale wind farms are going to be challenged, until you have large solar park type parks. Thus, he made a case for smaller scale auctions of 50-100 MW size rather than the giant projects.

Peaking tariffs for wind was the next key demand, seeing as how wind delivers in the evening when demand spikes. The government needs to value peaking tariffs a little higher. Currently, in trading platforms too, energy peak tariff is around 30-40% higher and here wind can be considered and can be used in decreasing the price.

Finally, Jain pitched stability and predictability in demand, to support both manufacturers and developers. “We have a model where we have a 450 GW target for 2030. 50 GW to wind means a decade of 5 GW every year. Once those volumes are assured, you will do optimisation in supply chain to bring down the cost”.

Gilan Sabatier, Head of Region- India & Southeast Asia, GE Renewable Energy highlighted how, despite not having the best wind energy resources in terms of climatic conditions, cost reductions had ensured that India’s wind potential is harnessable today. “Wind on its own has benefits in terms of matching demand profile, when solar is not as strong. You are able to generate to generate a lot more Kwh per sq metre of land today, and that has value. India has 10 GW of manufacturing capacity here. GE has three factories in this space.

Localisation of the industrial and technological footprint exists at a scale that is second to none. That is incredible value for the industry to go for. Today we export quite a bit from India to Europe and North America. So there is room for exponential growth. A strong domestic market will support this localisation “,he added.

Mr Chintan Shah, Director, IREDA seconded Kymal in welcoming the decoupling of manufacturers and project implementers. He also urged the industry to consider a role in the future with a place in the Hydrogen economy, where wind energy could be the green energy used in Hydrogen manufacture.

Ashwani Kumar- CEO, Suzlon Group. highlighted his firms role as a wind pioneer 25 years back. A significant proportion of Indian installations, and over 6000 MW of exports have been done the firm, helping establish a 2000 strong MSME’s in supply chain in India.

Mr Rajnikanth Umakanthan, Managing Director, 3Tier India, Vaisala elaborated on the complexity due to changes in wind data that have been discussed recently.

Mr Neerav Nanavaty, Chief Executive Officer & Country Manager-India, ENGIE spoke on how onshore wind is a logistics or land problem in India. “It is easier for us to develop wind farms in many countries compared to India. There is a need for smaller footprints for accelerating deployment, and for making it a smoother journey for all the stakeholders. Adoption of wind by C&I customers would also help as they they stick to solar primarily because its an easier technology to deploy. Packaging smaller chunks key.”

He was also the one to highlight the potential in repowering.” Lots of grandfathered wind resources constrained by sub 1 MW turbines today. 4 GW in Tamil Nadu sitting at 10-15% or similar PLF. Through a coherent policy, we can unconstrain that and double the PLF”. Doing so would be a huge opportunity, and also change perceptions about relative efficiency of wind energy, as overall PLF’s are barely 20 percent in India, when they could be easily pushing 30 percent or more with newer technology upgrades for these old assets.