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Published:Thursday, August 29, 2019 2:12 PM

Declining Wind Installations in India & Way Forward

Declining Wind Installations in India & Way Forward

India has set a target of achieving 175 GW of renewable energy till 2022. Among the technology wise breakup of capacity, Wind energy has the second highest share in the target i.e 60 GW. Currently India has wind installed capacity of 36.7 GW. India has met 62% of the target wind capacity. India has a wind energy potential of 302 GW. In 2018, SECI and NTPC floated total of 6.8 GW of wind tenders which were responded well by the players. Tariff’s hit all-time low in 2018 i.e INR 2.43 Rs/KWh. Despite such a well response from the industry players, the installations of wind power capacity in recent times have fallen down with respect to recent years.
 
               
 
Installation started decreasing after FY17 as the changes in policies and a major overhaul of tariff determination mechanism played a crucial role at that time. Before Reverse Auctions of wind power, the tariff of wind power was discovered between 4-6 Rs/kWh. During those times, firstly, the developer completed the projects and thereafter they signed the PPA with utilities according to the cost of those projects. However, the current scenario has changed after the reverse auction bidding arrangements and now developer must first sign the PPA with utilities and then go ahead with the commissioning.
 
Delay in Project Commissioning
 
The main stumbling blocks are still Land Acquisition and Grid Interaction in growth of wind energy installations in the country. As per the tenders issued by SECI and NTPC, wind developers are free to locate plant anywhere in the country. Unlike Solar Parks, there are no such parks available for the installation of Wind power plants/Wind parks. Also, as land acquisition is not backed by any administrative entity so risk factor is high for the developers as the developers must buy or lease the land by themselves. Needless to say, that wind power developers do face several problems in acquisition of land. Also, concerns over the viability of low tender bids and land acquisition issues in Gujarat were key contributors to the slow implementation of the projects, which initially were expected to be commissioned within 18 months and got delayed.
 
Sr. No.
States
Capacity Installed (MW) in FY 20
1
Andhra Pradesh
2
2
Gujarat
787.7
3
Karnataka
28.2
4
Kerala
10
5
Tamil Nadu
232.95
Total  (MW)
1060.855
 
Lack of power evacuation infrastructure also stands as one of the main obstacles. Since, the developer must bear the cost of evacuation system beyond a certain limit it becomes difficult for a developer to invest in plant with low tariff rates. In addition, due to dispute with states like Andhra Pradesh, the developers have now become more cautious as they are not able to sell the electricity. Also, the interest on loan could start to pile up as uncertainties of this nature may further alter the project economics. The Grid connection bottlenecks represents a key risk to project developers. In particular, the expectation for developers to launch low bids, despite substantial project implementation challenges, is set to remain a hurdle for India who is looking forward for deploying enough renewables projects to meet ambitious expansion plans.
 
Way Forward
 
India is currently working on the Green Energy Corridor for which will boost renewable energy capacity addition in the country. Technological advancement in wind sector is also making it possible to harness wind at sites which were earlier unviable.
 
Gujarat is the first state that came up with a policy to lease or use waste land in form of renewable energy parks. While Karnataka and Tamil Nadu are currently leading the way in renewables, other states of India are also poised to harness wind energy.
 
In addition to this, conducive policies such as exemption of interstate transmission charges and losses on solar and wind power projects up to March 31, 2022, are the key drivers to expand renewable portfolio in the country. As available supply and market demand continues to grow and Solar and Wind are under must run status, it will create a healthy market. The future looks positive for wind power projects unless the focus on certain issues plaguing the development of wind power projects is not dealt with in appropriate and decisive actions and boost investors and developers confidence.

  

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