Wind Energy & Why India Might Be Your Answer

Wind energy in India is seeing a robust growth thanks to the enormous opportunities that the geographical landscape has to offer to the industry. Two decades back, India gave birth to a young wind energy industry which has grown by leaps and bounds. The nascent industry of the 90’s has risen to become one of the world’s largest.

Together with USA, China, Germany and Spain, India accounts for about 74.2% of the world’s wind capacity in 2010.  This is a noteworthy growth compared to 72.9%, which was accounted for in 2009. India can boast of being the second largest market in wind energy with a growth rate of 10.7% and accounting for a total capacity of 13 GW. The future looks good for India, though China sits in the driving seat in the continent. The focus of the world in terms of wind energy has shifted to Asia with China being the leader in setting up wind energy farms and India becoming a leading consumer of wind energy products. Though India is still far behind in the amount of installed capacity per person at 0,011 Kw/person, given its huge population which is ever increasing, the reach of wind energy to a large mass of people at such an early stage of the industry is being unrealistically optimistic. Yet the Indian wind turbine manufacturing industries like Suzlon, are finding market space not just in India but also the world over. Along with China, Korea and Japan, India has increased its market share significantly globally[2].

This section looks at the history, governmental policies, the future and the barriers towards the success of wind energy in India.

1. History

Wind Energy was in use in the 1950’s to draw out water for irrigation purposes. It was a cheaper substitute to diesel driven pump-sets. National Windmill Demonstration Program was brought in by the Government of India as a part of the 6th Five Year Plan. These five year plans set economic goals and produced a blue print to achieve them. The program for windmill continued through the 7th Five Year Plan culminating in 1990. By then the country saw the installation of many 12 PU-500 wind pumps for shallow water pumping[3].

The Ministry of Non-Conventional Energy Sources (MNES) started a survey on wind resources in 1985. This wind date collection program was wide-ranging survey which took place in 25 Union Territories. The program included data collection on wind monitoring, wind mapping, and complex terrain projects. The wind resource potential calculated as a consequence of this study was 20, 000 MW[4].

After the survey the Government focused exclusively on grid-quality wind power and it opened up the market to private enterprises. As India experience liberalization at the exact same time, the wind energy industry found many successes. The private sector invested heavily and by March 1998, of the 968 MW of installed capacity, 95% had come from industries, entrepreneurs and businessmen. The sector saw a rise of 6% of new generating capacity between 1993 and 1997[5].

The Ministry of New and Renewable Energy (MNrE) has successfully increased the share of renewable sources of energy in contributing to the gross national electricity requirement. When the 10th Five years Plan began in 2002, the share of renewable sources of energy in the national capacity was a paltry 2%. Today it has increased to 10.9% with the total installed capacity being 170 GW where wind energy contributes 13,065.78 MW of energy. The Global Wind Energy Outlook has predicted a huge growth in the wind energy scenario of India. By 2020, the industry could see 170,000 jobs, and with an investment totaling $10.4 billion per year, the entire wind capacity could be 65 GW. This will also save 173 million tons of CO2 emissions every year[6].

The CAGr (Compound Annual Growth Rate) in the capacity addition of Wind Turbine Generator (WTG) between 1992-2010 has been about 24.67%. In 1992, the total installed capacity was 41.3 MW which has now risen to 13,065.78 MW by 2010[7]

2. Governmental Policies

India’s policy in promoting wind energy has been largely independent of governmental policy. This helped the notorious India bureaucracy to have little to do with the industry. This hands-off take on the industry allowed the market players especially the local manufacturing industry to naturally emerge as companies came to India to fulfill local needs. It took India to less than ten years to leap-frog through the bureaucratic cycle and establish itself as a premiere wind energy market and consumer. This was possible primarily because of technical advances which were made early on by local companies using local products, making the country rich with market players which originally were not players in the industry[8].

During the 10th Five Year Plan (2002-2007), the Government exceeded expectations and its target by installing 5,426 Mw of wind power generation capacity as opposed to 2,200 Mw as planned[9]. The Government of India has an ambitious new electrification policy for the current plan, the 11th Five Year plan, ending in 2012. The focus is majorly on renewable sources of energy and wind energy, being one of the rapidly progressing sectors, find special mention in the plan with the largest capacity addition coming in the this sector. The total investment on the development of renewable energy is $15 billion, being raised from domestic private investors, concessional financing from specialized governmental agencies and multilateral financial institutions. With the market for renewable energy growing at 15% every year, the foreign investment is being estimated to be $3 billion. The policy and government involvement in this sector is not only evolving every year but the outlook is dynamic, thus giving assurance to the investors that their investment will get returns and encouraging growth rate[10]

The Government in 2009 introduced the Grid Based Incentive (GBI) Scheme for grid connected wind power projects along with 627 wind monitoring stations to carry out wind resource assessment[11]. The purpose and thought process behind GBI was to broaden the investor base by facilitating the entry of independent power producers (IPPs), thus attracting more FDI in wind power sector, providing a level playing field between various classes of investors an incentivize higher efficiencies and provide a framework for transitioning from investment based incentive to output based incentive. The Scheme applies to maximum capacity limit of 4000MW during reminder of 11th Five Year Plan (2007-2012). The scheme may continue after 2012 pending the Central Government’s assent[12]

3. Suzlon

The company that spearheads India’s wind energy potential is Suzlon. The Indian owned company has within a decade emerged as a global player and last year made its presence felt on the international platform after capturing 7.7% of the market share in global wind turbine sales. It holds a 52% and market leading stake in the wind turbine market in India where it develops and operates wind farms along with manufacturing turbines. The success of Suzlon, has in turn made a developing country like India a leader in advanced wind turbine technology[13].

The company, initially a family owned Textile Company diversified into wind turbine manufacturing in 1995 and then became incorporated. Funded by City Group and Chryscapital, it made it to the top ten wind turbine manufacturers within five years of its entry into the industry. In September 2005, when Suzlon went public, its equity shares were five times over-subscribed. It has its international headquarters in Aarhus, Denmark while its group headquarters is located in Pune, India. Suzlon’s growth model is similar to a popular global model where it keeps abreast with the latest innovation in the global wind turbine industry and then incorporates it in their own research and development. As it has developed a global network of subsidiaries, it maintains a tight grasp over intellectual rights to remain a leader in innovation[14].

4. Opportunities

With 404 million Indians without access to electricity, wind energy has its task cut out to become the leading renewable source of energy for the country. The possibilities of expansion are endless. As grid extension in rural areas is not often cost effective, thus, decentralized energy generation with small wind projects are the best solution for rural electrification[15].

The “Small Wind Energy and Hybrid Systems” programme initiated in 1994 by the MNrE is implemented through State Nodal Agencies (SNA) focused solely on small wind energy and hybrid systems. The objective of the programme is to develop technology and promote applications of water pumping windmills and aero-generators/wind-solar hybrid systems. Although the programme helped to promote awareness of small wind systems in India, it created interest only among select users and has yet to make a real impact. The implementation of the programme was extended in April 2010 to the fiscal year 2011-2012. The physical annual target was set to installed 500 kW aero-generator/wind-solar hybrid systems and 25 water pumping windmills with estimated financial budget of Rs. 50 million over 2010-2012[16].

Offshore Wind Energy

India’s potential in off shore wind power is undisputed. With large tracts of coastline the possibilities are endless. Off-shore wind development is expensive, about 1.5-2.5 times more expensive that onshore, it becomes difficult to deploy them in developing countries. At this moment only Europe has a presence in this sector with a total capacity of 3GW. Presently, the current average rated capacity of offshore wind turbines is 2.5 MW as compared to average onshore wind turbine capacity of 1.06 MW (BTM ApS, 2010). It should be noted that most of the 4-6 MW turbines currently in the testing or early deployment stage are designed for offshore operation. The onus is now on the Government of India to not only create an environment where the new technology can be deployed but with right policies make it a success[17].

The Center of Wind Energy Technology (C-WET) has announced an off shore project in the state of Tamil Nadu as a prospective case study. It has also announced a new technical feasibility study in the state of Gujarat in partnership with the Scottish Development International (SDI), the international economic development agency of Scotland[18]. The Oil and Natural Gas Corporation (ONGC)[19] along with Siemens, Areva, and GE, have announced their intention to tap into the fertile market of off-shore wind energy. The Tata Group[20], has presented a proposal to the state of Gujarat for an off-shore wind energy project in the state[21].

5. Barriers and Solutions

The low utilization of the country’s wind power potential so far is attributable to several factors, including lack of an appropriate regulatory framework to facilitate purchase of renewable energy from outside the host state, inadequate grid connectivity; high wheeling[22] and open access charges[23] in some states, delays in acquiring land and obtaining statutory clearances[24].

The Indian Government had predicted that the capacity of wind power based plant to be increased by 6000 Mw, but this addition still falls short of the 11th Five Year Plan. Though the MNRE had planned to add 10,500 Mw in the period between 2007-12, but the additional generation capacity will be relegated to 6000 Mw. This estimation is based on the policies and plans announced by the private and public sector along with the development on continuing projects. Land availability seems to be a huge issue. As there is shortage of land, developing wind farms takes a backseat[25].

Policy control is a big issue. In 2010, India installed a record 2.1 GW of new wind power capacity. Yet to continue on this scale regulatory policy needs to be consistent and strong.  This is a cause of worry because there is a multitude of regulatory bodies in India. The Central Electricity Regulatory Commission (CErC) and the State Electricity Regulatory Commission (RErC) in tandem cause confusion in policy making and execution. While the CErC determines the feed-in tariff of electricity produced by renewable energy, this pricing policy holds good only in the power and generation and distribution system on which CErC has control over and those which transmit power in the inter-state corridors. The SErC could on the other hand make a different feed-in tariff proposal which could be at a polar opposite of the one made by the CErC[26].  

Inadequate grid infrastructure is another key issue that needs to be addressed urgently. Across most of those states with significant wind potential, the grid does not have sufficient spare capacity to be able to evacuate ever increasing amount of wind power. As a result, the state distribution utilities are reluctant to accept more power and on a merit order basis prefer thermal power. Thus, there is an urgent need to augment the grid capacity and the regional Southern Grid needs to be connected with the rest of the country on a realtime basis. This requires better forecasting of power demand across the nation, and a modernization of the grid[27].

Off-shore wind energy also poses a tremendous capital and procedural problems. Wind energy accounts for about 10% of the country’s total power generation with installed capacity of 16,000 Mw and is a promising sector with growth poised to double in the next five years. Though off-shore wind turbines deliver 50% higher plan load factor because of higher wind speed at sea, the cost of tapping power is 50% higher than on-shore wind turbines per Mw. Red tapism, bureaucracy and the debt ridden state distribution system does not help the cause[28].

There is heavy load on the wind turbine manufacturing industry which has to deal with the severe time crunch to supply components to the projects. With continued expansion in the industry manufacturing capacity needs to improve and increase. The solution lies in establishing several small to medium enterprises with subsidies. This will reduce the strain on the large manufacturing plants and not let the quality dip[29].

As the industry expands, there is a requirement for trained officials who could join the industry as technicians. This necessity demands a change in the academic curriculum of the technical colleges of the country. The Indian Wind Turbine Manufacturers Association, has thus started a pilot project of training students in local technical and engineering colleges towards employment in this industry. How successful this project will be will set the road map for further expansion of this program across other technical and engineering schools in India. Attached to this issue is also of lack of land for wind farms. With corruption on a rise in issues of land grabbing and unfair compensation of land being taken from farmers, wind farms find it difficult to set shop. The Government must work towards creating a proper legislation and execution machinery where land could be taken within the parameters of the law and fair and just compensation being given in exchange. Without a just mechanism, forest and tribal land is also being acquired to convert them into wind farms. At the same time if land is lawfully obtained, the Government must create a quicker process to convert its use from agricultural to non-agricultural[30]

Conclusion

India’s electricity shortage peaked at 12% in 2009-10. Experts are estimating that the between peak hours of 5 pm to 11 pm, the shortage might outstrip the given figure of 12%[31]. With an ever increasing population and the economic development which the country saw in the face of the global crisis, has further pushed the demand. Wind energy provides for an excellent option to not only meet this shortfall but also contribute to the National Electricity policy target of “Electricity for all by 2012”. As the gestation period of wind energy is shorter than nuclear or coal fired power plants and thus returns are not only environmentally sound, they seem to be financially feasible. Additionally, India has commitments under UNFCCC as well as the National Action Plan on Climate Change of Government of India[32]. This gives the Government onus to build on the promises of its policies. Energy security in increasingly energy hungry world is the key to which wine energy could be a possible solution. With abundant natural resources at our disposal, it would only be natural for the country to gravitate towards wind energy to fulfill the energy demands, while reducing the country’s carbon foot print and improving the environment of the country.

- By Sayan Das

About Sayan: Sayan is currently an LL.M student at Pace University School of Law.  Sayan received his Bachelors in Law from the University of Pune, India.  His LinkedIn profile can be accessed at http://in.linkedin.com/pub/sayan-supratim-das/37/265/856.


[1]The Use of Wind Energy in India – Lessons learned- Victor K. Mallet http://web.mit.edu/10.391J/www/proceedings/Wind-India_Mallet2001.pdf
Last Visited 13th March, 2012

[2] World Wind Energy Report 2010 -http://www.wwindea.org/home/images/stories/pdfs/worldwindenergyreport2010_s.pdf
Last Visited on 11th March, 2012

[3] 4 The Use of Wind Energy in India – Lessons learned- Victor K. Mallet http://web.mit.edu/10.391J/www/proceedings/Wind-India_Mallet2001.pdf
Last Visited 13th March, 2012

[5] The Use of Wind Energy in India – Lessons learned- Victor K. Mallet http://web.mit.edu/10.391J/www/proceedings/Wind-India_Mallet2001.pdf Last Visited 13th March, 2012

[6] Indian Wind Energy Outlook 2011- http://www.indianwindpower.com/pdf/iweo_2011_lowres.pdf Last Visited 15th March, 2012

[7] Indian Wind Energy Outlook 2011- http://www.indianwindpower.com/pdf/iweo_2011_lowres.pdf Last Visited 15th March, 2012

[8] A Comparison of Wind Power Industry Development Strategies in Spain, India and China by Joanna I. Lewis- http://www.resource-solutions.org/lib/librarypdfs/Lewis.Wind.Industry.Development.India.Spain.China.July.2007.pdfLast Visited 16th March

[9] India to add 6,000 mw wind power by 2012; but below target- 

[10] Indian Wind Energy Outlook 2011- http://www.indianwindpower.com/pdf/iweo_2011_lowres.pdf
Last Visited 15th March, 2012

[11] 14.55 GW of wind installed in India, 627 monitoring stations established to harness potential- http://panchabuta.com/2011/08/07/14-55-gw-of-wind-installed-in-india-627-monitoring-stations-established-to-harness-potential/ Last Visited 16th March

[12] Generation Based incentives for Wind Power Projects Beyond 2012- http://agneyablog.wordpress.com/2011/02/21/generation-based-incentives-for-wind-power-projects-beyond-2012/ Last Visited 16th March

[13]A Comparison of Wind Power Industry Development Strategies in Spain, India and China by Joanna I. Lewis- http://www.resource-solutions.org/lib/librarypdfs/Lewis.Wind.Industry.Development.India.Spain.China.July.2007.pdfLast Visited 16th March

[14] A Comparison of Wind Power Industry Development Strategies in Spain, India and China by Joanna I. Lewis- http://www.resource-solutions.org/lib/librarypdfs/Lewis.Wind.Industry.Development.India.Spain.China.July.2007.pdfLast Visited 16th March

[15] 16 Indian Wind Energy Outlook 2011- http://www.indianwindpower.com/pdf/iweo_2011_lowres.pdf Last Visited 15th March, 2012

 [17] Indian Wind Energy Outlook 2011- http://www.indianwindpower.com/pdf/iweo_2011_lowres.pdf Last Visited 15th March, 2012

[18] India explores offshore wind energy potential-  http://panchabuta.com/2012/03/04/india-explores-offshore-wind-energy-potential/ Last Visited 16th March

[19] ONGC is a state owned oil and gas company in India. It has its headquarters in New Delhi. It is one of Asia’s largest oil and gas exploration and production company, accounting for 77% of India’s total crude oil production and 81% of the natural gas production. If measured by profit it is the largest Indian company and is a publicly traded company.

[20] The Tata Group is a publicly listed Indian multinational company with interests in communications and information technology, engineering, materials, services, energy, consumer products and chemicals. Its headquarters is in Mumbai and is one of the largest conglomerates in the country. Its operations run in 80 countries, comprising of 114 companies and subsidiaries in 8 business sectors.

[21] 24 Indian Wind Energy Outlook 2011- http://www.indianwindpower.com/pdf/iweo_2011_lowres.pdf Last Visited 15th March, 2012

[22] Wheeling charges: An amount charged by one electrical system to transmit the energy of, and for, another system or systems.

[23] Open access: In the Electricity Act, 2003 it is defined as the “non-discriminatory provision for the use of transmission lines or distribution system or an associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission”

[25] 26 27 India to add 6,000 mw wind power by 2012; but below target-  http://www.business-standard.com/india/storypage.php?tp=on&autono=44562 Last Visited 16th March

[28] Offshore wind energy: Industry sceptical about high costs & cumbersome procedures- http://articles.economictimes.indiatimes.com/2012-02-25/news/31099921_1_offshore-wind-wind-energy-offshore-turbines

Offshore wind energy: Industry sceptical about high costs & cumbersome procedures in India-http://panchabuta.com/2012/02/28/offshore-wind-energy-industry-sceptical-about-high-costs-cumbersome-procedures-in-india/
Last Visited 16th March

[29] Indian Wind Energy Outlook 2011- http://www.indianwindpower.com/pdf/iweo_2011_lowres.pdf Last Visited 15th March, 2012

[30] 32 Indian Wind Energy Outlook 2011- http://www.indianwindpower.com/pdf/iweo_2011_lowres.pdf
Last Visited 15th March, 2012

[31] India has 12% power shortage, figure may get higher: experts- http://www.livemint.com/2009/05/05005836/India-has-12-power-shortage.html Last Visited 15th March, 2012

 

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