No major impact of additional tariff or trade uncertainty: Suzlon V-C

The Indian industry is at a stage where renewables have moved from a "nice to have" to "must have" position, says Tanti

The Indian wind energy industry is unlikely to be significantly impacted due to higher US tariffs or trade uncertainty because its products are globally competitive, and have a huge demand, Girish Tanti, Vice Chairman of Suzlon Energy tells Business Standard in an exclusive interaction. In fact, over $50 billion investment is lined up for projects to be commissioned through 2030 in India, even as the country captures $20 bn worth of global export market, he says. Edited excerpts..         

 

What are the top three takeaways from the just-released Global Wind Energy Council (GWEC) report?

 

The report brings out the importance of wind energy in India's energy mix. It covers a detailed assessment of why wind will remain the core of India's energy transition. It states the demand for wind energy will remain robust. While the national target is to achieve 100 gigawatt (Gw) wind energy capacity by 2030, from a demand perspective, we will be able to achieve at least 122 Gw, including 107 Gw from state utilities and additional 15 Gw from the Commercial and Industrial (C&I) market. The Indian manufacturing landscape is ready for delivering on this huge promise. It also covers the issues being faced for deployment of projects, including transmission constraints, on-ground challenges and delays in PPA (power purchase agreement) signings. 

 

Another key aspect is that India has the potential to contribute 10 per cent to the global wind energy value chain in the form of exports, amounting to around $20 billion.

 

Would it be possible for India to achieve this 10 per cent potential, given the recent developments on the trade tariff front? 

 

The US has just imposed an additional 25 per cent tariff on India. The Indian industry is at a stage where renewables have moved from a ‘nice to have’ to ‘must have’ position, purely based on commercial viability and technical performance of solutions for end consumers. There is a natural energy transition happening across the world. Irrespective of the few blips that may happen here and there, purely from a consumer point of view, the growth levers are very strong. Also, there is a lot of Environmental, Social, and Governance (ESG)-related funding in the world that is pushing for decarbonisation. Over the last 30 years' cycle of the development of wind energy, we have seen that there are a few good years in some markets followed by a few good years in some other markets. So, it is largely not much of an impact. There are going to be markets which were earlier not fitting in better but will fit in better now, just like some trade agreements may not go well but at the same time some others will open up. Since we have a product or a solution that is globally competitive, we will sell wherever we have a positive relationship. Also, India is not very exposed when it comes to exports to the US market. The US accounts for only around 5 per cent of India’s overall wind energy equipment exports.

 

India's domestic manufacturing capacity for wind energy equipment has grown from 10 Gw in 2014 to 18 Gw at present. Compared to the progress in solar, this may appear low. What is holding us back?

 

India's solar power capacity stands at 130 Gw, as against the target of 300 Gw by 2030. So, less than 50 per cent of the target has been achieved. In the case of wind energy, we have already crossed 50 per cent of the target… So, I do not think the wind energy sector is growing at a slow pace.

 

What kind of investment would go into setting up the additional 50 Gw-odd wind energy generation capacity over the next five-year period?

 

Typically, it takes around $1 million investment to set up 1 megawatt (Mw) capacity. So, for 50,000 Mw, the investment will be around $50 billion. There is a strong case for wind energy on the techno-commercial front, and there is enough demand, too, 

to support capacity creation. That is why the shift in favour of wind energy is happening.

 

Is this growth momentum reflected adequately in your order book position?

 

We have seen a very steady growth in the order book both at the industry level and at Suzlon. This is because of the steady demand, supply and viability of projects. Private sector C&I customers account for around 50 per cent of Suzlon's customer base today. So, players who are present in the power sector for the long-term are partnering with Suzlon to build strong assets. These (partnerships) include large power utilities and big corporate houses too. They want round-the-clock (RTC) power and realise that the wind energy component is critical. Indian public sector undertakings (PSUs) have also now started building their power assets for green energy transition.

 

Suzlon has a robust balance sheet and a strong cash-positive situation. So, our focus is on execution of projects. We have a good order book in hand, and we have ramped up and launched good products.