Envision plays the waiting game and looks for partners in India

INDIA: India's wind-power market is thriving, thanks to prime minister Narendra Modi's aggressive targets and most of the major turbine makers have established a presence in the country.

Useful… Envision has low-wind experience from China
Useful… Envision has low-wind experience from China

Senvion, Vestas, Nordex Acciona and Enercon have all entered - or re-entered - the market in recent years, joining Siemens Gamesa Renewable Energy, which, in the guise of pre-merger Gamesa, led the market in 2015 and 2016.

They face competition from established domestic players,such as Suzlon, which leads the cumulative market with more than 2GW, Inox Wind and ReGen Powertech.

Chinese player Envision Energy has also thrown its hat in the ring, getting its 2.3MW turbine with hub heights of 115 and 90 metres approved for sale by the country's energy ministry. The firm has a manufacturing facility near Pune in Maharashtra, western India.

Low-wind experience

"We feel that is fairly appropriate at this stage in the market, as our experience in China has been significant in terms of the low wind conditions," Mel Badheka, Envision's senior director for international business said.

"Since we just got the approvals, we do not have any installations yet. But we are in various stages in development with some of the major independent power producers in India," said Badheka.

Envision's current lack of presence in the country is not worrying Badheka, however, as the company wants to learn more about the market.

"We are not in a big hurry. Just as our chairman and CEO (Lei Zhang) has said, we plan to be in India for the long term, and we are looking to better understand the regulatory environment, as well as the taxation and the auction mechanism," Badheka said.

"Considering India just had its first successful auction in February, we are looking to see how those projects are going to develop - what are the challenges others are seeing in terms of execution."

Risk assessment

To help the company navigate India's tricky regulations, Badheka said Envision was speaking to a number of local partners that understand the market better.

"We are currently evaluating many potential partners, and we'll take our time to understand the risk profile first. As you may have seen from other experiences from some of our peers, there are still significant challenges, especially in the regulatory environment, so we are being careful.

"Land acquisition in India is a significant hurdle for wind-power projects. We're just evaluating some of these local providers to see who has really got a solid track record," Badheka said.

Land rights are a big issue in India and can stretch back generations, but often only come to the fore when wind-project applications are submitted. One of domestic player Suzlon's largest departments is dedicated to land rights.

"We want to make sure that we don't take untold risks, thereby risking our clients' investments," Badheka explained.

"So there are very serious areas that we look at in depth and ensure that any projects that come our way are thoroughly evaluated from a risk perspective. We believe that the market is fairly healthy (and) fully support the Make in India programme by prime minister Modi."

Make in India is aiming to promote growth in Indian manufacturing with a focus on renewable-energy sectors.

"(The government has) done a lot to improve the profile of the country and also the rule of law, which is definitely a big plus to drive foreign investment into the country," Badheka said.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in