Wind energy to be in thick of acquisitions

The Indian wind energy sector would witness heightened acquisition in the next 12-18 months, with operators having a portfolio of 100-300 Mw generation capacity likely to dominate the buyers’ interest.

“These players are having a pipeline of 2,000–3,000 Mw in their portfolio. There are around 10 such companies, each having 100-300 Mw projects in the implementation stage. All these companies slowly would be acquired or merged. Big deals would happen in the next 12-18 months,” said Madhusudan Khemka, chairman of Indian Wind Turbine Manufacturers' Association (IWTMA) and managing director of ReGen Powertech Private Ltd.

Khemka noted investors had started looking at the Indian renewable energy sector more aggressively. Some of the measures like re-introduction of accelerated depreciation (AD), renewable purchase obligation (RPO), proposed introduction of RGO (renewable general obligation) would draw greater investments in the sector.

While the industry expects RPOs to be increased, the Gujarat government has reduced the obligation and Andhra Pradesh is expected to reduce it further, even as many states have achieved RPO.

He said in 2012-13, almost 95 per cent of investments in the sector was from independent power producers (IPPs) for about 1.7 GW capacity,  it was 2.1 GW in 2013-14, and for 2014-15, with the re-introduction of AD, we could see 1.8-2 GW capacity coming from IPPs and 0.6 GW from AD.

Since the AD announcement came in very late, the maximum benefits could not be availed.

For the fiscal 2015-16, we aim at making the best out of AD--an estimated 4GW-- with 1GW from AD and 3GW from IPP.

With new initiatives from the government, industry is targeting at 6-7 GW wind generation in 2016-17, 8GW in 2017-18, and a 10GW from 2019-2020. “There is a big shift in the size of projects, with AD growing from 5-10 Mw to 15 -50 Mw and the IPP from 50 Mw to 100 Mw,” he said.

Around Rs 7000 cr capital investment required

According to Khema, an investment of Rs 5,000-7,000 crore should be pumped into the wind energy equipment manufacturing  in order  to meet the Centre’s  capacity target of 60-GW by 2022. For this, he said the industry had sought the government to come up with a long term policy supporting the manufacturers.

Investments are very much policy driven. States that are not friendly towards  wind energy cannot avail the benefits like in the case of Tamil Nadu. MP, Rajasthan and Andhra Pradesh, he said.