Wind Energy Sector Overview
The rapid industrialisation and urbanisation over the years have led to increase in demand for electricity in India over the years. The use of Coal as a fuel to generate electricity has dominated for decades. The conventional methods and sources of power generation have led to increase in pollution and environmental degradation worldwide, and India is no exception to this phenomenon. India pledged to obtain 40% of its installed electrical capacity from non-fossil energy sources by 2030 as part of its Nationally Determined Contributions (NDCs) at COP 21. In November 2021, the country had already accomplished its goal. The Indian government has further committed at CoP26 to achieve 500 GW of installed non-fossil energy capacity by 2030. Over the last seven years, the country has made tremendous progress in making use of renewable energy sources like solar and wind energy on a massive scale. The wind energy potential in India is huge. Sandeep Sharma takes a look at the opportunities available in India’s wind energy sector.
WIND ENERGY SECTOR IN INDIA
Over the last three decades, the wind energy industry has risen substantially. However, it fell into a slump in 2015-16, from which it is still trying to recover. Although India’s wind energy business is more mature than that of solar, solar has overtaken wind in terms of total installed capacity in the last five years. India’s wind energy sector is led by the domestic wind power players. The wind industry’s growth has resulted in a strong ecosystem, project operating capabilities and a manufacturing base of roughly 10,000 megawatts per year. With a total installed capacity of 39.25 GW (as of March 31, 2021), the country now ranks fourth in the world for the wind installed capacity and generated roughly 60.149 billion units in 2020-21.
According to the Expert Group Report of the NITI Aayog, the wind energy industry is estimated to reach 60 GW of installed capacity by 2022, from a total RE target of 175 GW. As of November 2021, India’s total installed wind capacity stood at 40 GW. India had 27 GW of installed capacity in 2016. As the Government of India focussed primarily on developing the Solar sector, the country could add only 13 GW in the last five years.
FOCUS ON RENEWABLES
The degradation of the environment and pollution are causing climate change worldwide and putting the entire mankind at risk. The making use of conventional methods and fuels to generate power has further deteriorated the environment. The use of coal to generate electricity adds to the amount of greenhouse gases in the atmosphere. As a developing country, India has had to deal with difficulties such as coal based electricity generation. In the last seven years, the government of India has actively focused on capturing renewable energy sources, particularly on solar energy. Coal-fired power generation has lost favour with the power producers, and is being largely replaced by solar and wind energy.
SWIFT MOVE TOWARDS RENEWABLES
As the world is focused on environmental challenges, particularly climate change, the concept of sustainable growth has taken centre stage globally. The countries are participating in the climate change negotiations on global forums and are keen to move towards carbon-free energy. India, as a global participant, is on the forefront of making use of renewables for power generation. Environmental concerns, combined with lower costs of renewable energy sources (solar PV and wind), have pushed solar and wind-based power production technologies forward. When compared to coal-based generation, the capital cost of renewable (solar PV and wind) technologies for power generating is becoming more competitive by the day. India has the world’s fourth-largest installed renewable energy capacity. As of November 30, 2021, the country had installed a total of 150.54 GW of renewable energy capacity (including large hydro). Furthermore, during the years 2021-22, a total of 219817.14 million units of electricity were generated from various renewable energy sources (up to October 2021). The majority of renewable energy projects in the country are developed by private sector developers who are chosen through a transparent bidding process. The government has released standard bidding guidelines to help distribution licensees get power at competitive prices in a cost-effective way. States/UTs can procure power from solar projects (less than 5 MW capacity) and wind projects (less than 25 MW capacity) not covered under competitive bidding guidelines through Feed-in-Tariff (FiT) determined by the respective State Electricity Regulatory Commission to protect the interests of small developers as per central government guidelines.
GOVERNMENT INITIATIVES
In recent years, India’s wind power producing capacity has expanded significantly. The Southern, Western, and Northern regions have the most wind power capacity. The Government is promoting wind power projects in the entire country through private sector investment by providing various fiscal and financial incentives such as Accelerated Depreciation benefit; concessional custom duty exemption on certain components of wind electric generators. Besides, Generation Based Incentive (GBI) Scheme was available for the wind projects commissioned before 31 March 2017.
In addition to the aforementioned fiscal and other incentives, the following steps have been taken to encourage the installation of wind power in the country:
The National Institute of Wind Energy in Chennai provided technical assistance, including wind resource assessment and site identification.
Inter-state transmission charges and losses have been abolished for wind and solar projects that will be commissioned by March 2022, in order to facilitate inter-state selling of wind electricity.
Guidelines for Tariff-Based Competitive Bidding Process for Procurement of Power from Grid-Connected Wind Power Projects were issued with the goal of providing a framework for procuring wind power through a transparent bidding process that included standardisation of the process and defining the roles and responsibilities of various stakeholders.
These guidelines aim to make it easier for Distribution Licensees to get wind power at reasonable prices.
WIND V/S SOLAR
In India, the general trend has been toward solar, which, in addition to being cost-competitive, has a short gestation period and poses less development obstacles than wind projects, which need installation in areas with significant wind density. But wind energy has an advantage as it is available during non-solar hours, thus adding significant value to the whole energy mix. Both sectors complement each other very well, and wind-solar hybrid projects have the potential to be a win-win situation for both sectors.
WIND ENERGY POTENTIAL IN INDIA
Because the wind is a variable and site-specific energy source, a thorough Wind Resource Assessment is required before selecting potential sites. The government has erected over 800 wind-monitoring stations across the country and released wind potential maps at 50m, 80m, 100m, and 120m above ground level through the National Institute of Wind Energy (NIWE).
India has a 7600-kilometer coastline that is surrounded on three sides by water, making it an excellent candidate for offshore wind generation. As a result, the government issued the “National Offshore wind energy policy” on October 6, 2015, as per the Gazette Notification. According to the policy, the Ministry of New and Renewable Energy will serve as the nodal ministry for the development of offshore wind energy in India, collaborating closely with other government agencies on the development and use of maritime space within the country’s Exclusive Economic Zone (EEZ), and will be responsible for overall monitoring of offshore wind energy development.
The National Institute of Wind Energy (NIWE) in Chennai will serve as the nodal institution for resource assessments, surveys, and research in the EEZ, as well as demarcate blocks and assist developers in constructing offshore wind farms. The Ministry of Power has set a target of 5.0 GW of offshore wind projects by 2022 and 30 GW by 2030 in order to reassure project developers in the Indian market.
According to the National Institute of Wind Energy (NIWE), total wind energy potential is 302 GW at 100 metre hub height and 695.50 GW at 120 metre hub height. More than 95 percent of commercially exploitable wind resources are concentrated in seven states out of the entire estimated potential (Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu). Onshore wind projects require valuable land resources, which are progressively becoming a serious restriction. With the best windy locations being depleted, it is expected that market-determined pricing for onshore wind energy will rise in the future.
In such a situation, offshore wind power is a viable option. The quality of wind and its conversion to electrical energy is much improved when there are no obstructions in the sea. Offshore wind turbines are substantially larger (between 5 and 10 MW per turbine) than onshore wind turbines (between 2-3 MW). While the cost per MW for offshore turbines is higher because of the necessity for sturdier buildings and foundations in a marine environment, the desired tariffs can be achieved after the ecosystem is developed due to higher efficiency of these turbines.
PROJECT OPPORTUNITIES
Some of the prominent projects and announcements pertaining to the Wind Energy sector are listed below:
RWE COLLABORATES WITH TATA POWER TO TAP OFFSHORE WIND ENERGY OPPORTUNITIES
RWE, the German energy behemoth, and Tata Power, the Indian power company, have formed a partnership to construct offshore wind projects in India. In this regard, a memorandum of understanding was recently inked. India has a well-developed onshore wind industry, but no offshore wind turbines are active in its waters. The Indian government is conducting thorough technical research and developing a regulatory framework in preparation for the first offshore wind auctions off the coasts of Tamil Nadu and Gujarat.
3 GW RE PROJECT BY NREL
NTPC Renewable Energy Limited (NREL) is expected to issue a global engineering, procurement, and construction tender for a 3 GW renewable energy (such as solar and wind) project featuring a ₹15,000 crore battery storage system.
120-MW WIND FARM IN KARNATAKA
Azure Power Global Limited has been awarded a contract by the Solar Energy Corporation of India (SECI) to supply wind energy from a 120-MW wind farm in Karnataka as of October 2021. The 120-MW wind farm will be built in 18 months from the PPA signing date. It’ll be linked to the interstate transmission network (ISTS).
KP ENERGY BUILDS A WIND FARM IN GUJARAT
KP Energy has been awarded a contract to build a wind farm in Gujarat. Along with the supply of wind turbines, the company will provide EPCC services for wind. The Project is scheduled to be completed on June 30, 2022.
AYANA IS DEVELOPING 300 MW ISTS-CONNECTED WIND POWER PROJECT
Ayana Renewable Power Six has awarded Siemens Gamesa a contract for the delivery of 84 SG 3.6-145 wind turbines for the development of the 300 MW ISTS-Connected Wind Power Project (Tranche-X). The plant is coming up in Gadag District, Karnataka.
2500 MW OF RE PROJECTS BY JSW ENERGY
JSW Energy is currently building over 2,500 MW of renewable power projects with the goal of reaching a total power generation capacity of 20,000 MW by 2030, with renewables accounting for around 85 percent of total capacity. In the next 18-24 months, about 2,200 MW of wind and solar projects partnered with Solar Energy Corporation of India (Seci) and JSW Steel are projected to be operational. JSW Energy’s projects in Tamil Nadu are the company’s first large-scale wind generating projects in India. JSW Energy has agreed to purchase 810 megawatts (MW) of wind power turbines from GE Renewable Energy by the first quarter of FY23. This is in addition to its earlier order of 591 MW of wind power turbines from Senvion India.
FUTURE OF WIND ENERGY SECTOR IN INDIA
Electricity is one of the most important accelerators for the country’s socioeconomic development. As the economy grows, so does the demand for electricity. To accomplish the planned growth rate, generation capacity augmentation is the most important component among the numerous techniques used to meet the ever-increasing demand for power. The electricity generation through renewable sources especially Solar and Wind are finding favour with the government of India. India is expected to add an estimated 16 GW of renewable energy by FY23, according to rating agency ICRA. The prediction is based on the fact that India currently has a robust pipeline of more than 55 GW of under-development solar, wind, and hybrid capacity. According to another report by ‘Bridge to India’, India will install 10 GW of renewable energy capacity in 2022. This is down 10% from the previous year (YoY). The government is putting a lot of emphasis on development of electricity through renewable energy sources. According to a recent report by Global Wind Energy Council (GWEC) titled “Capturing Green Recovery Opportunities from Wind Power in Developing Economies.”, India can create over a million jobs and save an additional 229 million metric tonnes of CO2e throughout the lifetime of a wind farm, which is roughly 25 years. The future of wind energy in India seems to be quite promising for all the stakeholders. Apart from generating clean energy, it is also expected to generate good number of employment opportunities.
*Image used in this article is for illustration only
Note: The above-mentioned article covers India’s Wind Energy sector overview. This was first published by us in our ProjectX India | 15th March 2022 edition. Each issue of ProjectX contains information on new projects, ongoing projects, contract award, commissioned projects, and e-procurement opportunities. Buy our latest or archival issues by clicking here…
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