India is targeted to grow at 9% annually. In order to
sustain this growth rate it is imperative for the India to reduce its power demand
supply gap. Currently India is estimated to have a demand supply gap of 10.3%
(96367 GWh
[i]).
The primary sources of power generation
are Thermal, Nuclear, Hydro and import (from Bhutan). However, recently, the
renewable power generation sector has started becoming more prominent. From
2008 to 2012, the renewable sector is expected to grow to $19 billion and
contribute 14000 MW of power.
Among the renewable energy sector (not including hydro), the
prospects of wind energy have been very promising. India is currently ranked 5
th
in the world in terms of installed wind power generation capacity. India added 2.8 GW of wind energy capacity in
2011, making it third in the world (behind China and US) in terms of new
installations. Moreover, in 2011, the wind energy sector in India saw an
investment of $4.6bn as compared to $4.2bn
[ii]
in solar energy sector. At this stage, one is forced to wonder what the key
factors are which have created this growth. In my view the factors can be categorized
as follows:
Resources
The table below provides the list of the states having wind
potential as well as the utilization of this potential.
|
State
|
Gross Potential (MW)
|
Total Capacity (MW) till 31.03.2011
|
% Utilization
|
|
Andhra Pradesh
|
8968
|
200.2
|
2%
|
|
Gujarat
|
10,645
|
2175.6
|
20%
|
|
Karnataka
|
11,531
|
1730.1
|
15%
|
|
Kerala
|
1171
|
32.8
|
3%
|
|
Madhya Pradesh
|
1019
|
275.5
|
27%
|
|
Maharashtra
|
4584
|
2310.7
|
50%
|
|
Orissa
|
255
|
0
|
0%
|
|
Rajasthan
|
4858
|
1524.7
|
31%
|
|
Tamil Nadu
|
5530
|
5904.4
|
107%
|
Quite evidently, there is still a lot of scope for further
development. Moreover, so far, the focus of wind energy sector has been on onshore
development only. The offshore development in India is still in the
developmental phase. India has a 6400 km long coast line, and although there is
no substantial data, some preliminary analyses have shown that there are quite
a few promising areas for offshore power generation.
Apart from areas with power generation potential,
availability of labour and material also plays an important role. There are
plenty of engineering colleges in India which can easily satisfy the need of skilled
labour required for this industry. Moreover, there are more than 25 wind
turbine manufacturers in India providing turbines of various size and design.
These factors reduce the cost substantially making the market more attractive.
Regulations & Policies
There are many incentives that have been provided to the
players in this area. These incentives constitute part of the policy of the
government for this sector. They cover various aspects of the project development
such as investment, construction production etc. The policies are 1) Central
level and 2) State level.
- Central Level: These policies are created by the Central government. Ministry of New and Renewable Energy is the nodal ministry. Some key feature of these policies are:
- Generation-Based incentives (GBI) of Rs. 0.50/kWh.
- Concessional import duty on specified wind turbine parts.
- 80% accelerated depreciation in the first year.
- Excise duty reliefs.
- Loans through IREDA.
- Income Tax holiday.
State Level: These policies vary from state to state. They mainly constitute determination of tariff as well as details of the state level subsidies.
Issues
Bureaucracy and
Corruption are the most prominent deterrents for growth. India is ranked 95
in the world corruption index (1 being least corrupt). This compounded by the
bureaucracy and the redtapism become a major deterrent for companies.
Political Leadership is
another major impediment in the growth of this sector. Lately the politics in
India has been marred by coalition politics. This has delayed the
implementation of many of the key policies. Moreover there have been many instances
in which change in political leadership has caused a major revision of
government policies; however, renewable energy sector has normally been not
affected by these revisions.
Conclusion
Over all I believe that there is tremendous potential for
the growth of wind energy sector in India. Most of the states have not even
utilized 50% of their available resources. The offshore wind farms are still in
conceptual stages. There are mechanisms
and policies in place to make this sector more successful and many companies
have scripted their success using them. However, there are issues such as
corruption, volatile political atmosphere etc which need to be addressed soon.
