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In an exclusive interview with WindInsider magazine, Balram Mehta – President WIPPA (WIND INDEPENDENT POWER PRODUCERS ASSOCIATION) and COO – ReNew Power spoke about the wind sector’s overall performance and ways to uplift the same. He also told us about emerging technologies that will impact the sector and how India is currently positioned to achieve its 2030 Renewable target.
What is your view on the wind sector’s performance in India over the years? What can be done to uplift the same?
In early 2000, Wind was a favorite investment opportunity for most of the IPPs. There were many incentives for investment in wind energy being offered. The size of the investment (from MWs’ point of view) was limited. It was a perfect combination of small investors, OEMs, and proactive and investor-friendly policies by state governments. All the windy states were periodically coming out with feed-in tariff policies and the sector was flourishing.
At the start of the next decade, many IPPs came into existence, sector attracted interest from foreign investors. The central government came out with many new schemes like RPO compliances, REC mechanism, Generation Based Incentive (GBI) scheme to promote and attract investment in this sector. These favorable policies attracted major investments in the sector during the period and witnessed high annual MW additions, to the tune of 5400 MWs of new wind capacity added in the year 2016-17 alone.
However, the sector took a hit in 2017 when the tariff-based competitive bidding model for allotment of renewable projects was introduced in India. This led to fierce competition among all stakeholders finally leading to extreme pressure on the complete ecosystem. With the rising cost of wind turbines and land, the revenue margins shrunk drastically. As a result, the total new wind capacity addition in the past 5 years has been around 7 GW only. In spite of the fact that the annual wind equipment production capacity in India is more than 10 GW per annum.
Going forward, we foresee that cost competitiveness and capacity ramp-up shall co-exist, towards which we see the following factors to play a pivotal role in setting the course right and faster for the wind power sector in India:
- Hybridization of renewable power:
Due to the rising demand for round-the-clock (RTC) renewable power, IPPs are preferring hybridization of solar & wind technologies to enhance PLF. With the high cost of storage and persistent tariff pressures, wind power is one of the optimal sources to combine with solar to provide renewable power during peak hours of consumption. Hence, the majority of the new wind capacity additions in the coming decade will be through hybrid projects.
- Repowering of wind projects:
High PLF, good windy sites in India, especially in Tamil Nadu, Karnataka, and Maharashtra, have been occupied by old, low PLF generating machines but with valid PPAs. These sites provide an opportunity for wind developers to replace these older models with new, advanced wind turbines to boost the project’s capacity as well as PLF and more contribution towards green units.
- Growing C&I Sector
In the past couple of years, the market has also seen a shift from state/central PPAs to PPAs with C&I customers and power sales through exchanges. Additionally, the growing preference towards the ESG factors will further make private PPAs an attractive proposition. We anticipate more wind power projects to be set up to cater to the growing private market.
- Inclusion of Small Investors
In the initial years, small investors have played a major role in the wind MW addition. But after the introduction of the auction regime, this segment of investors is feeling left out as the windfarm size has increased from 10- 25 MW to 300 MWs and small investors are finding it difficult to participate at this level of high investment.
What are some emerging technologies which are likely to make a big impact on the sector?
Advancement in wind turbine technology in the past few years has led to the availability of high PLF turbine models, capable of giving PLF of as high as 40% due to higher hub height, larger rotor diameter, and WTG’s ability to function at lower wind speed. India has also positioned itself as a leading manufacturing hub for wind turbines under its “Made in India” efforts.
Offshore wind is another untapped market in India. With a 7600 km long coastline, India offers high potential in offshore wind, especially in the coastal states of Gujarat and Tamil Nadu and our islanded union territories. Currently, due to a lack of effective technology, and favorable regulations, India has no operational offshore wind capacity. But, keeping in mind India’s ambitious renewable targets, offshore wind can be a plausible solution with a high potential to add ~30 GW by 2030.
How do you see India is currently positioned to achieve its 2030 Renewable target?
India is among the largest growing economies in the world and offers huge potential for growth. The country’s per capita consumption of electricity is still low at 1208 kWh in FY 20 as compared to the world average of 3300 kWh. So, on the demand side, the electricity demand is expected to grow substantially in the coming decade, and I am sure that this increased demand will be met through renewable energy sources.
Additionally, increasing decarbonization efforts of the country will also generate high electricity demand as the government focus on electrification of several sectors. With the increasing uptake of electric vehicles (EVs) and green hydrogen, electricity demand will multi-fold by end of this decade.
On the power supply side, solar power will continue to grow unprecedently, leading the country’s 2030 renewable target and this will be coupled with wind installations. More and more renewable hybrid projects and round-the-clock solutions will be developed with high installed capacity. Several power purchases models will co-exist in addition to govt. PPAs, such as power sale to the third party, captive or behind-the-meter projects, and/or power sale at energy exchange shall provide alternate revenue options for IPPs.
Finally, to ensure India is on the right path to fulfilling its ambitious 2030 renewable target, a strong policy framework is required from both state & central governments as well as policymakers. Firstly, and most importantly pace of robust grid strengthening has to match the growth of renewable capacity. The second prerequisite is to enhance focus towards building domestic manufacturing capabilities in solar PV, energy storage, green hydrogen, and associated new-age technologies which will be necessary to make the Indian RE ecosystem self-reliant.
Lastly, it’s prudent to bring necessary reforms to improve state distribution companies (discom) financial health. All these measures are critical to ensure reliability and faster integration of renewable energy in the Indian power system.
Note – views expressed are personal views.