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Mandatory power purchase key to wind sector's turnaround: officials

The sector is beset by reliability of grid, payment mechanism and surety of payment and the long term policies, they say

Raghu Krishnan & Shreya Jai  |  Bengaluru/ New Delhi 

Wind turbines; Image courtesy: Gamesa
Wind turbines; Image courtesy: Gamesa

As the government gives renewed push to clean energy sources in the country, the wind sector expects a strict policy for mandatory power purchase. In an exclusive interaction with Business Standard, leading wind sector executives and experts expressed concerns on adequate grid infrastructure.

Madhusudan Khemka, managing director, Regen Powertech Limited, Chintan Shah, President (Business Development), Suzlon Energy Limited and Ramesh Kymal, Chairman and Managing Director, Gamesa Renewable Private Limited, said they were hopeful of wind capacity touching 3500 MW in the coming year and an investment close to $30 billion in the sector.

“This year, we expect almost 2800-3000 MW will be installed during 2015-16 and of this, minimum 50% investment from independent power producers. Most of which would be foreign investment,” said the executives, “But to improve the faith of the foreign investors in the country, there are still challenges."

Khemka said the challengersfor the sector are reliability of grid, payment mechanism and surety of payment and the long term policies.

Owing to policy flip flops, the wind energy sector witnessed capacity addition touching historic lows in the past three years. At 24000 Mw, India is the fifth largest wind energy producer but installed capacity fell to a decade low in 2011-12 and has seen minimal improvement. With the withdrawal of tax incentives for the sector, investment also dried down.

“There is no fiscal incentive in the sector. The sector needs consistent policies in terms of taxation and budgetary allocation. We are able to attract considerable foreign investment. When they come to India, they come here for long term, so the policies need to match it,” said Khemka.

The executives also highlighted that RPO guidelines given by CERC is not taken seriously by most states, except where there is a potential of wind energy.

“Apart from that, states follow their own banking and wheeling norms. Whereas there should be standardised banking and wheeling norms across the country because the power generated during windy months can be used throughout the year by the actual consumers,” they said.

Khemka said even on tariff determination, different standards are adopted by different sates, whereas there are clear guidelines given by CERC on tariff determination. In every state, the regulatory bodies in these states have their own norms. There should be adoption of standard policy by all states.

“If we have to achieve the target of 60 GW, we have to increase the base of investors in wind energy. That can be done through RPO and the other is newly introduced Renewable Generation Obligation,” said an executive.

The senior company officials added that nothing epitomises ‘Make in India’ the way wind energy does.

“We have made more than 85% indigenisation in wind energy and we have nearly 2000 MW per year manufacturing capacity coupled with high efficiency machines and world class quality,” they said.

Capacity Addition (in MW) Installed Capacity (in MW)
Upto-2002 1668.19
2002-2003 241.39 1909.58
2003-2004 611.8 2521.38
2004-2005 1109.14 3630.52
2005-2006 1716.17 5346.69
2006-2007 1742.05 7088.74
2007-2008 1664.83 8753.57
2008-2009 1484.9 10238.47
2009-2010 1464.6 11703.07
2010-2011 2349.4 14052.47
2011-2012 3216.55 17269.02
2012-2013 1740.7 19009.72
2013-2014 2094.7 21104.42
2014-15 2311.7 23416.12
2015-16 1315.7 24731.82

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First Published: Tue, February 16 2016. 14:44 IST
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