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India

India

Post election market slow but optimistic

The wind market in post election India has yet to return to its former dynamism. Lines of credit for wind development are still frozen and potential investors have yet to recover from the dilemma of an election year when the fate of the country's wind market incentives remained in doubt. Today, though, the economy is limping back to normal. Non conventional energy, however, has come under the wing of the copious Power Ministry, which many say is more concerned about dealing with larger issues, such as the gas and coal plant industry, than with renewables. "We share a power minister and a power secretary, neither of which have time for renewables," moans an industry source.

The Ministry of Non Conventional Energy Sources is now part of the Power Ministry. MNES advisor, Ajit Gupta, confirms that there has been a slowdown in the first six months of the year with about 70 MW of wind capacity added. He attributes this to the general liquidity crunch, a delayed budget and the new MNES guidelines (Windpower Monthly, August 1996). These "seek to bring about some degree of discipline in the sector," says Gupta.

The Indian wind sector's enthusiasm has been dampened by the slow down, but not destroyed. NEPC Micon's Madhu Sudan cautions: "September 1996 should not be used as an indicator of the growth of the industry." He says the market is improving and by March he expects the annual growth rate to be back to 15-20%. NEPC had installed 38 MW by the end of September, against its target of 75 MW.

From India's other major wind company, Rakesh Bakshi of RRB Vestas says: "Though things are currently slow on the wind energy front, wind power is here to stay." He stresses that the Indian wind industry has had a faster transition than the rest of the world. He says the current scenario will lead to a mature industry that might have less players, but "ones that are serious about producing a cost-effective generation."

Many in the industry are rattled at the recent introduction of a Minimum Alternative Tax (MAT) now imposed on the accounted profits of zero tax companies (16% of 30% of book profits). But Ravi Prakash Khemka, chairman of NEPC Micon, comments: "Though the MAT is bound to bring down the market by 2 to 5% initially, the new incentives given to the infrastructure sector will expand the market once again and will, in the long run, outweigh the MAT application," Others, however, say they are not too sure and claim that even the government remains ambiguous on the issue.

Customers in crisis

Having succumbed to competition from abroad, India's textile city of Coimbatore, with the most favoured wind sites in the district, is reeling under a severe financial crisis. Investment in wind energy expected from textile machinery manufacturers and mill owners is currently slow. However, with a new automobile industry getting into full swing and with major foundries based in Coimbatore, optimists say the next six months will see an increase in companies anxious to secure wind power.

That wind energy is here to stay does not seem to be in doubt in the best wind sites of the Coimbatore district of Tamil Nadu-Poolawadi. Farmers who once professed that wind turbines would detrimentally affect the health of their animals, seem to be at ease in lifestyles which now include colour televisions and refrigerators, a luxury created by the increase in jobs created by neighbouring wind farms. One farmer proclaims, "Even the weather has changed here in the past three years."

Indeed the area is greener, an indication perhaps, of residents using electricity to make once barren land cultivable. There are roads leading to wind farms and substations set up, all ready to transfer power to the grid. Says a proud developer, "The grid is so stable that we can now run our machines for 24 hours a day."

Getting back to work

All of the wind industry's serious members have their sights set on an improved year ahead. Enercon's S.V. Kulkarni says his company's blade manufacturing is on schedule, with exports of 150 sets each of blades for 230 kW and 550 kW machines. From Sree Rayalaseema Power Corporation Limited, T.S. Kanakraj says the slowdown delayed his plans to go public, but that in retrospect time to think has been no bad thing. "All the screwdriver technology will have to go. Only the serious players will survive," he says. The 300 kW Japanese Mitsubishi turbines made by Sree Rayalaseema have been awaiting certification and ISO accreditation. "All this takes time," says Kanakraj. "But we haven't invested INR 250 million for nothing." He says Rayalaseema plans to commission 10 MW by March 1997.

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