Market Status: India - Back on a growth track after lull

INDIA: India's powerful economic growth is driving the wind sector. The country's overall grid-connected power generation capacity will need to expand from 148GW currently to 460GW by 2030. The country's primary energy demand is expected to triple by 2030.

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With 48.5GW of estimated wind power potential, there are big hopes for wind to meet much of the demand. After a slowdown in 2009, the Indian wind power sector last year achieved a record increase in capacity of 2GW. Cumulative installed wind is now 13.8GW. More than 20 wind turbine factories are under construction.

In December 2009, India instituted an incentive for wind of INR 0.5/kWh ($0.01/kWh) for power sent to the grid. This is in addition to existing state incentives and sets a ceiling for total payment of INR 6.2 million/MW ($135,445/MW) of installed capacity. The incentive will be paid out over a maximum of ten years, or until the ceiling is hit, but for no less than four years. The GBI is limited to the first 4GW of capacity fully connected to the grid by March 2012.

The Indian Wind Turbine Manufacturers Association (IWTMA), however, says the GBI is too low and calls for broadening of certain benefits that are unavailable to independent power producers. A report is to be submitted to the Ministry of New and Renewable Energy (MNRE) in February to make the case for this. IWTMA says it hopes the 2011-12 budget will consider duty exemption for 542 wind-turbine components that have to be imported.

Meanwhile, the government’s Renewable Energy Certificate scheme, applying to all renewables, began in February. A utility or power producer that exceeds its renewable energy targets, fixed by state-level regulators, will be able to sell surplus certificates to utilities that fail to achieve quotas.

The World Bank Group’s financing arm, the International Finance Corporation (IFC), is supporting green energy projects in India.

"We are investing in both generation and technology development," says Anita George, director of infrastructure at the IFC. She says, however, that since renewable energy generation involves a high cost with longer payback periods, many private players have remained reluctant to venture into renewable-energy projects seen as holding higher risk. 

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