Government indifference toward wind energy has propelled many developers to shut down, leading to a slump in production
According to the Ministry of New and Renewable Energy website, the country currently has the fourth-highest wind installed capacity in the world, with a total installed capacity of 39.25 GW (as on March 31, 2021) and a manufacturing capacity of 10 GW. India’s wind energy setup, according to official numbers, has generated around 60.149 billion units in the past year.
In terms of capacity addition, financial year (FY) 2020 registered 2.1 GW, improving over the 1.6 GW added in FY19. The actual capacity commissioned last fiscal, however, was only 2.5 GW, just a third of the 7.5 GW that was slated to be commissioned by March 2020 as per the timelines fixed.
Manish K.Singh, secretary-general, Indian Wind Energy Association told CarbonCopy, “Unfortunately wind energy is getting no support from the Centre in terms of fund allocation. The Feed-in-Tariff and manufacture-linked incentives, too, have been curbed.” He further added, “Developers feel disenchanted when they pay high land prices to install their project, but state governments and DISCOMs expect them to keep the lowest possible tariffs. Persistent delays in payments from DISCOMs and execution of projects are further dampeners.”
The experts also enumerate various other reasons for slump in wind energy deployment, which include execution challenges, a tight financing environment, inadequate availability networks for integration of renewable energy to the grid, lack of land evacuation facilities, regulatory delays in tariff adoption from the regulators in the past, impact of lockdown imposed in wake of the COVID-19 pandemic on the execution of under-construction projects as well as on the revenues and cash flows of DISCOMs.
In fact, the government is doing nothing for the development of wind parks. In the case of solar parks, the central government facilitates land and integration of power to the grid. The government’s indifference toward wind energy has propelled many producers to shut down. The slowdown was evident in the tendering activity, with no wind power project awarded post August 2019.
Promising future scenario
Martand Shardul, policy director at Global Wind Energy Council, told Carbon Copy, “India’s wind energy target for 2030 is 140 GW. It is expected that around 20 GW can be added by 2025 through effective policies and programmes. The annual wind energy manufacturing capacity is about 10 GW, but the fact is there is consumption of only 2 GW. The rest has to be exported by manufacturers. We need more capacity utilisation plants, replacement of low capacity old windmill projects and power acquisition infrastructure for wind and solar convergence.” Anathema of DISCOMs for an Open Access System to maintain their monopoly in power purchase trade is another bottleneck, he said.
With India’s current installed capacity—it ranks fourth in wind installation—Shardul is hopeful that it can become a leader in the global manufacturing sector by availing its four decades of experience. “India has attained 72-80% indigenous technology in wind energy. The country is already doing trans border wind energy deployment trade with Nepal and Bangladesh, which can further be scaled up with South East, Europe and the UK ,” he said.
India needs to pay attention to wind energy just like it does solar energy, he said, further adding that by 2025, India will need 12,000 certified workers for onshore (land-based) wind energy projects. At present, the country has around 5,000 workers. This way, wind projects will generate further employment and increase the country’s GDP, he added.
India is chalking out policy to join the ranks of the world’s top offshore wind power producing countries—the United Kingdom, Germany, Belgium, Denmark, The Netherlands, Sweden, and China—which have a total installed capacity of 8.7 GW.
“The off-shore option is expensive, but quite promising for the future due to availability of the required wind power. The government needs to put the right policies in place and see how states can be incentivised for expensive gadgets purchases for off-shore. Along with that, developers and distributors need to be given the benefit of subsidy to bring down the tariffs,” Shardul said.
He said, even under the newly launched National Mission for Hydrogen, wind energy was going to play an important role.
India’s first-of-its-kind integrated project of 3,600 MW solar and 900 MW wind and 2,520 MW pump hydro storage plant has also been launched in Rajasthan.
“We need to make certain changes to have an efficient system in wind energy for the benefit of all stakeholders. No state has laid down a road map to meet renewable energy targets. Therefore, both the Centre and state are losing and are not able to tap. The Centre/state government must create an auction calendar, which will make it easy to track the progress and keep an eye on the target also,” Shardul said.
He added the Central Electrical Authority should also keep updating its report and put it in the public domain through a dashboard to ensure the Centre, state and stakeholders can monitor the progress.
He recommended amplification of the hybrid energy policy, under which 30 MW solar and wind has been set up in Kutch, Gujarat. Since solar cannot generate power at night and storage is very expensive, wind energy is important. Wind does not work much in winter, so solar is important. Hybrid of both is crucial for intermittent arrangement.
As one of the only top emitters with no net-zero commitments yet, India has been under considerable global pressure to increase its ambition. The Indian government, so far, has been on track to meet its Nationally Determined Contributions (NDCs), its renewable share has jumped around 226% since 2015 and energy minister RK Singh’s recent announcement that India has achieved 100 GW of installed RE capacity is a step in the right direction. However, the clean energy revolution is coupled with 37 GW of proposed new thermal power capacity till 2025. Visits by COP26 president Alok Sharma and US climate envoy John Kerry to India make it evident that the expectation is for the country to offer enhanced climate actions. India has called for enhanced access to funds and the capital market for the transition to be swift. The announcement made by the UK to invest $1.2 billion for green projects in India has been welcomed by environmentalists.
“Giving access to finance will be a key factor determining deployment and achievement of India’s ambitious 450 GW renewable energy target by 2030. This initiative will help in channelising more investment into clean energy in India. While this is a good start, India will still need $500 billion of investments by 2030 to achieve the target, implying that more investment needs to come,” said Vibhuti Garg, energy economist, Lead India, Institute of Energy Economics and Financial Analysis (IEEFA).