"We need to turn the negative image around," said Dan Kofoed Hansen of Danish wind turbine maker NEG Micon while on a recent visit to Delhi. "There have been too many shortcuts in installation. There have been too many promises made -- too many amateurs wanting to reap from the gold rush." Hansen pointed to the growing trend in wind turbine components made in India, but said caution needs to be exercised in these early stages. "We need to increase quality control. India does not yet have a competitive edge." Still on a cautionary note, he added: "We would like to see incentive schemes that are based on productivity rather than capacity installed." Such incentives encourage the construction of viable projects, rather than just large amounts of capacity.
The official total installed wind capacity in India is 992 MW, but this includes around 35 MW of turbines destroyed in a cyclone in Gujarat last summer (Windpower Monthly, September 1998). The real figure is thus closer to 960 MW. According to MNES, developers are expected to re-build the destroyed projects, using state-of-the-art technology. Meantime, 70-80 MW is expected to be added elsewhere by March. The wind target set by India's Ninth Plan (1997-2003) is 1000 MW, halved from an earlier figure of 2000 MW to take account of the slow down in the country's economy, recently fuelled by Asia's broad economic crisis. The market's 6% growth rate between 1993 and 1996 could get back on track this year.
With the market still short of cash, many wind turbine manufacturers are turning developers. So far this seems to be working. Enercon India is installing a 7.5 MW project, Enercon Wind Farms, at Jogimatti in Karnataka. The company's Yogesh Mehra admits that while things are generally slow going, his company plans to set up 50, 280 kW E30 turbines at the site by March.
Vestas RRB is feeling more optimistic following an order for 30, 500 kW machines financed by a mixed credit loan, the first ever in India for wind power (Windpower Monthly, December 1998). The machines are for a private 15 MW project for Mohan Breweries and Distilleries in Tamil Nadu, partly financed by Danish overseas aid organisation DANIDA (Windpower Monthly, December 1998). "We are convinced this wind project will become a showpiece for the market, partly because it is the first wind farm being installed since the slow down in the economy, and partly because of its unique financing structure," says Rakesh Bakshi of Vestas RRB. Half the loan is made commercially, while the remainder is Danish aid financing. Bakshi also feels that a major new project going ahead in India will give the market a needed psychological boost. The plant, slated to be constructed by March, is expected to produce 30 million kWh annually.
A helping hand
The recent moves by MNES to lay a foundation for market recovery have been welcomed by the industry. MNES has been praised for taking on a more advisory role as well as for campaigning directly for inducements to encourage major private companies to invest in wind. So far, three corporations have pledged to set up 260 MW of wind plant (Windpower Monthly, October 1998).
MNES has identified 160 sites with a technical potential of 9000 MW in 13 states. Domestic funding by at least 15 banks is available to the wind sector, but loans are slow in coming. The Indian Renewable Energy Development Agency (IREDA) has committed $460 million to new projects, of which wind's share is $187 million.
The need for active co-operation between wind farm developers, state energy boards and other agencies was stressed by delegates at Energy Summit '98, held recently in Chennai by the Confederation of Indian Industry. Madras Cements Limited (MCL), which owns 17 MW of wind power capacity, related a tale of woe, which included two years of poor winds, overly optimistic production forecasts by the manufacturers, and slow progress by the Tamil Nadu State Electricity Board (TNEB) on the infrastructure for transmitting the power. "The industry will grow further if financial institutions ensure projections made by developers are accurate," warned the company's A. S. Shivakumar. MCL based its financing on a pay-back period of seven to eight years which has now been textended to ten years. The MCL wind farms, made up of 69, 250 kW NEPC Micon turbines made in India, today generate about 60% of the energy requirements of the cement plant. They are sited at Muppandal and Udumalpet.
TNEB had been concerned with the effect of wind power generation on grid quality, as well as the amount of reactive power drawn from the grid by wind turbines, insisting the wind farms take no more than 35% reactive power. With its project, MCL has proved this concern is unwarranted. "We are happy to note the reactive power drawn in this service connection is less than two percent," says Shivakumar.
In general, the wind industry has started to see that small projects currently do not pay off in India. "There are no benefits for us in taking up individual power projects," explains Sarvesh Kumar of Vestas RRB India. "We need good tariffs so as not to worry about overheads or even sales to third parties." On the export front, adds Kumar, "We need to be more competitive on prices."
China is reported to have begun serious consideration of importing wind turbines from India and an enquiry for two turbines has been received by some manufacturers. The Indian industry, however, views the move with suspicion. "China is good at copying. We do not want our technology to go that cheap," says one member.
The cyclone that razed Gujarat in early June and destroyed wind turbines with a combined generating capacity of 35 MW has also forced the Indian industry into action (Windpower Monthly, September 1998). One observer says it was a blessing in disguise. "Smaller machines will now be replaced with bigger ones. Many non-performing turbines have been hit and these will need to be replaced as depreciation had already been claimed on them," he says. MNES is planning to issue new guidelines for areas prone to cyclones after its report is finished on the storm in Gujarat. The protective measures are expected to outline how tower design can be improved, as well as locking machines fast during a storm.
Acquisition of land and its clearance remains an issue in the state of Karnataka. The paperwork is such that files on individual siting applications are reaching enormous proportions. Karnataka continues to have a generating capacity deficit of 20% with its 4430 MW of installed power plant capacity. Gujarat, despite having been a centre of wind industry activity for a decade, has yet to adopt a wind policy. Meantime, regulations for sale of wind power to third parties has been identified as a must in Tamil Nadu. The state is home to around 700 MW of India's wind power capacity and as such hosts by far the largest amount. Gujarat is home to around 130 MW, with nearly 60 MW Andhra Pradesh.
The wind industry has welcomed the guidelines on structuring wind markets that have been provided to state governments by MNES, but so far there has been little determination to follow them. A hike in the price paid for wind kWhs is hoped for to stimulate the market.