“We are also looking at taking up overseas renewable projects, for which we are open to joint ventures,” said Shivaraman.
Commenting on Leitner Shriram Manufacturing Ltd, a company set up by Shriram EPC to manufacture wind turbines at Gummidipoondi near Chennai, he said recently it had exported components for wind turbines in small number and was planning to scale up exports from the second half of the current fiscal mainly to eastern Europe.
Orient Green Power Company Ltd (OGPL) is engaged in the business of power generation through renewable sources. By having a balanced portfolio focusing on all forms of renewable energy Orient embarked on an ambitious plan of building capacities to the tune of 500 MW within the next five years.
Orient Green Power Company Ltd (OGPL) is engaged in the business of power generation through renewable sources. By having a balanced portfolio focusing on all forms of renewable energy we have today embarked on an ambitious plan of building capacities to the tune of 500 MW within the next five years.
Wind power in India
The development of wind power in India began in the 1990s, and has significantly increased in the last few years. Although a relative newcomer to the wind industry compared with Denmark or the US, a combination of domestic policy support for wind power and the rise of Suzlon (a leading global wind turbine manufacturer) have led India to become the country with the fifth largest installed wind power capacity in the world.
As of November 2008 the installed capacity of wind power in India was 9587.14 MW, mainly spread across Tamil Nadu (4132.72 MW), Maharashtra (1837.85 MW), Karnataka (1184.45 MW), Rajasthan (670.97 MW), Gujarat (1432.71 MW), Andhra Pradesh (122.45 MW), Madhya Pradesh (187.69 MW), Kerala (23.00 MW), West Bengal (1.10 MW), other states (3.20 MW). It is estimated that 6,000 MW of additional wind power capacity will be installed in India by 2012. Wind power accounts for 6% of India’s total installed power capacity, and it generates 1.6% of the country’s power.
Suzlon, an Indian-owned company, emerged on the global scene in the past decade, and by 2006 had captured almost 8 percent of market share in global wind turbine sales. Suzlon is currently the leading manufacturer of wind turbines for the Indian market, holding some 52.4 percent of market share in India. Suzlon’s success has made India the developing country leader in advanced wind turbine technology.
Tamil Nadu (4132.72 MW): Tamil Nadu is the state with most wind generating capacity: 4132.72 MW at the end of 2008. Not far from Aralvaimozhi, the Muppandal wind farm which the largest in Asia is located near the once impoverished village of Muppandal, supplying the villagers with electricity for work. The village had been selected as the showcase for India’s $2 billion clean energy program which provides foreign companies with tax breaks for establishing fields of wind turbines in the area. In february 2009, Shriram EPC bagged INR 700 million contract for setting up of 60 units of 250 KW (totaling 15 MW) wind turbines in Tirunelveli district by Cape Energy.
Maharashtra (1837.85 MW): Maharashtra is second only to Tamil Nadu in terms of generating capacity. Suzlon has been heavily involved. Suzlon operates what was once Asia’s largest wind farm, the Vankusawade Wind Park (201 MW), near the Koyna reservoir in Satara district of Maharashtra.
Gujarat (1432.71 MW): Samana in Rajkot district is set to host energy companies like China Light Power (CLP) and Tata Power have pledged to invest up to Rs.8.15 billion ($189.5 million) in different projects in the area. CLP, through its India subsidiary CLP India, is investing close to Rs.5 billion for installing 126 wind turbines in Samana that will generate 100.8 MW power. Tata Power has installed wind turbines in the same area for generating 50 MW power at a cost of Rs.3.15 billion. Both projects are expected to become operational by early next year, according to government sources.
The Gujarat government, which is banking heavily on wind power, has identified Samana as an ideal location for installation of 450 turbines that can generate a total of 360 MW. To encourage investment in wind energy development in the state, the government has introduced a raft of incentives including a higher wind energy tariff. Samana has a high tension transmission grid and electricity generated by wind turbines can be fed into it. For this purpose, a substation at Sadodar has been installed. Both projects are being executed by Enercon Ltd, a joint venture between Enercon of Germany and Mumbai-based Mehra group.
ONGC Ltd has commissioned its first wind power project. The 51 MW project is located at Motisindholi in Kutch district of Gujarat. ONGC had placed the EPC order on Suzlon Energy in January 2008, for setting up the wind farm comprising 34 turbines of 1.5-mw each. Work on the project had begun in February 2008, and it is learnt that the first three turbines had begun production within 43 days of starting construction work. Power from this Rs 308 crore captive wind farm will be wheeled to the Gujarat state grid for onward use by ONGC at its Ankleshwar, Ahmedabad, Mehsana and Vadodara centres. ONGC has targeted to develop a captive wind power capacity of around 200 MW in the next two years.
Karnataka (1184.45 MW): There are a lot of small wind farms in Karnataka. Karnataka is one of the states in India which has the most number of wind mill farms. Chitradurga, Gadag are some of the districts where there are a large number of Windmills. Chitradurga alone has over 200 wind turbines.
Madhya Pradesh (187.69 MW): Present Rs.3.97p/kwh coming down to Rs 3.30 from the 5th year to 20th year. In consideration of unique concept, Govt. of Madhya Pradesh has sanctioned another 15 MW project to MPWL at Nagda Hills near Dewas. All the 25 WEGs have been commissioned on 31.03.2008 and under successful operation.
Kerala (23 MW): The first wind farm of the state was set up at Kanjikode in Palakkad district. It has a generating capacity of 2.03 MW. A new wind farm project was launched with private participation at Ramakkalmedu in Idukki district. The project, which was inaugurated by chief minister V. S. Achuthanandan in April 2008, aims at generating 10.5 MW of electricity.
West Bengal (1.10 MW): The total installation in West Bengal is just 1.10 MW as there was only 0.5 MW addition in 2006-2007 and none between 2007-2008 and 2008-2009 (till Nov 2008).
In the early 1980s, the Indian government established the Ministry of Non-Conventional Energy Sources (MNES) to encourage diversification of the country’s energy supply, and satisfy the increasing energy demand of a rapidly growing economy. In 2006, this ministry was renamed the Ministry of New and Renewable Energy (MNRE).
The total potential for wind power in India was first estimated by the Centre for Wind Energy Technology (CWET) at around 45 GW. This figure was also adopted by the government as the official estimate, following a comprehensive wind mapping exercise initiated by the MNRE, which established a country-wide network of 553 wind monitoring stations in 25 Indian States.
This effort made it possible to assess the national wind potential and identify suitable areas for harnessing wind power for commercial use. However, the wind measurements were carried out at lower hub heights. At heights of 50-60 meters, the Indian Wind Turbine Manufacturers Association (IWTMA) estimates that the potential for wind development in India is around 65-70 GW.
Steady market growth for wind Wind energy is continuing to grow steadily in India. In 2008, 1,800 MW of new wind generating capacity was installed, taking the cumulative figure up to more than 9.6 GW. This represents an annual growth of 22%. Wind power in India has been concentrated in a few regions, especially the southern state of Tamil Nadu, which maintains its position as the state with the largest wind power installation, with 4,118 MW installed at the end of 2008, representing 44% of India’s total wind capacity.
This is beginning to change as other states, including Maharashtra, Gujarat, Rajasthan and Karnataka, West Bengal, Madhya Pradesh and Andhra Pradesh start to catch up, partly driven by new policy measures, as in Maharashtra and Gujarat. As a result, wind farms can be seen under construction all across the country, from the coastal plains to the hilly hinterland and sandy deserts. The Indian government envisages an annual capacity addition of up to 2,000 MW in the coming years.
India is heavily dependent on fossil fuels for its energy needs, mainly coal, of which it has significant reserves. However, to fuel a thriving economy and a targeted GDP growth rate of 7-8% per year, the country’s electricity demand is projected to more than triple between 2005 and 2030. Already today, electricity shortages are common place. To address this problem, the Indian government has envisaged a capacity addition of more than 70,000 MW by 2012.
The Indian government’s stated target is for renewable energy to contribute 10% of total power generation capacity and have a 4-5% renewables share in the electricity mix by 2012. This means that renewable energy would grow at a faster rate than traditional power generation, accounting for around 20% of the total added capacity planned in the 2008-2012 timeframe.
The Indian electricity industry was restructured by the 2003 Electricity Act, which unbundled the vertically integrated electricity supply utilities in the Indian States and set up State Regulatory Commissions (SERCs) in charge of setting electricity tariffs. The act also opened access to the Indian transmission system, allowing consumers to purchase their electricity from any producer.
The Electricity Act also required the SERCs to set Renewable Portfolio Standards for electricity production in their state, and the MNRE issued guidelines to all state governments to create an attractive environment for the export, purchase, wheeling and banking of electricity generated by wind power projects.
Ten out of the 29 Indian States have now implemented quotas for a renewable energy share of up to 10% and have introduced preferential tariffs for electricity produced from renewable sources. These states are Kerala, Rajasthan, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Madhya Pradesh, West Bengal, Gujarat and Haryana. In addition, several states have implemented fiscal and financial incentives for renewable energy generation, including: energy buy back (i.e. a guarantee from an electricity company that they will buy the renewable power produced); preferential grid connection and transportation charges and electricity tax exemptions.
At the federal level, although there is no national policy for renewable energy, there are a number of measures that help drive wind energy development, including fiscal incentives such as income tax exemption for 10 years, 80% accelerated depreciation, sales tax exemption and excise duty exemption.
Some states with Renewable Portfolio Standards or other policies to promote wind generation, have introduced feed-in tariffs for wind generation which are higher than that for conventional electricity. In Karnataka, for instance, the tariff for wind generation is about 3.50 rupees/kWh (5.5 Euro cent) compared to only 1.50 rupees/kWh (2 Euro cent) for coal generated power.
In June 2008, the MNRE announced a national generationbased incentive scheme for grid connected wind power projects under 49 MW, providing an incentive of 0.5 rupees per KWh (0.7 Euro cents) in addition to the existing state incentives. Investors which, because of their small size or lack of tax liability cannot draw any benefit from accelerated depreciation under the Income Tax Act can opt for this alternative incentive instead.
In 2008, the National Action Plan on Climate Change released by the Indian government included a proposal for a national renewable energy trading scheme, which would be based on a National Renewable Portfolio Standard. In this scheme, states would be encouraged to promote the production of renewable power to exceed the national standard. They would then receive certificates for this surplus power, which would be tradable with other states which fail to meet their renewable standard obligations.
Since only grid-connected electricity would be eligible for this scheme, this ould particularly benefit the wind industry. It is expected that this proposal will come into force in 2009 or 2010. The possibility to register projects under the Kyoto Protocol’s Clean Development Mechanism (CDM) has provided a further incentive to wind energy development in India. As of 1 February 2009, 270 projects were registered with the CDM Executive Board, accounting for 5,072 MW, second only to China (see page 6 for a complete list of CDM projects by country).
India has a solid domestic manufacturing base, including global leader Suzlon, accounting for over half of the market, Vestas Wind Tech and RRB. In addition, international companies have set up production facilities in India, including Enercon, Repower, Siemens and LM Glasfiber and the new entrants like ReGen Power Tech, WinWinD, Kenersys and Global Wind Power.
Over the past few years, both the government and the wind power industry have succeeded in injecting greater stability into the Indian market. This has encouraged larger private and public sector enterprises to invest in wind. It has also stimulated a stronger domestic manufacturing sector; some companies now source more than 80% of the components for their turbines in India.
Indian company Suzlon, the world’s fifth largest turbine manufacturer, is now also well established in the international wind market beyond India, operating in 20 countries around the world and supplying turbines to projects in Asia, North and South America and Europe.
Suzlon Energy is a wind power company in India. In terms of market share, the company is the largest wind turbine manufacturer in Asia (and the fifth largest worldwide). In terms of net worth, it is the world’s most valuable wind power company. With headquarters in Pune, it has several manufacturing sites in India including Pondicherry, Daman, Bhuj and Gandhidham as well as in mainland China, Germany and Belgium. The company is listed on the National Stock Exchange of India and on the Bombay Stock Exchange.
Tulsi Tanti, a former textile manufacturer, with the help of some of his friends of Rajkot moved into wind energy production and founded Suzlon energy after facing increasing electricity costs. Suzlon is actively run by the Chairman and Managing Director, Tulsi Tanti since the initiation of the company. In late July 2008, Suzlon Energy appointed Rohit Modi as President – India Business. In 2003, Suzlon got its first sale in USA, with an order from DanMar & Associates to supply 24 turbines in southwestern Minnesota.
In India, the company has been the market leader for eight years consecutively, installing 53% of the capacity added in 2005. Suzlon offers customers total wind power solutions including consultancy, manufacturing, operations & maintenance services. Suzlon is a multinational company with offices, R&D and technology centers, manufacturing facilities and service support centers spread across the globe.
With the increasing demand and the advantage of being an end-to-end solution provider in its field of activity, Suzlon plans to increase its presence within India, and around the world. It already has a presenc in over 40 locations around the world – including Australia, China, Europe, India, New Zealand, South Korea, Spain and the USA.
Suzlon has design and R&D teams and facilities in Germany, India and The Netherlands to retrofit blades for clients. The international sales business of Suzlon is managed out of Aarhus, Denmark, while its global management office is in Amsterdam.Suzlon Rotor Corporation in 2006 began producing the blades in Pipestone, Minnesota in the United States. Among its clients is Wind Capital Group.
In the year 2006, Suzlon reached a definitive agreement for acquisition of Belgium firm Hansen Transmissions, specializing in gearboxes for wind turbines, for $565 million. In 2007, the company purchased a controlling stake in Germany’s REpower which valued the firm at US$ 1.6 billion. In June 2007, Suzlon had signed a contract with Edison Mission Energy (EME) of US for delivery of 150 wind turbines of 2.1 MW in 2008 and a similar volume to be delivered in 2009. EME had an option not to purchase the 150 turbines due to be delivered in 2009, which it has chosen to exercise.
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