India is expected to install nearly 20.2GW of wind power capacity between 2021 and 2025 — more than 50% growth from the 39.2GW currently installed in the country.
The Global Wind Energy Council (GWEC) highlighted this expected growth as a sign that the Indian market – which has been hit by a slowdown in installations in the past few years and, more recently, the coronavirus pandemic – is bouncing back.
It expects capacity awarded in central and state governments’ auction to drive expansion to 2023, while the installation of wind-solar hybrid projects is set to accelerate beyond 2023.
However, the coronavirus pandemic and other external events may yet present further obstacles to wind power growth in India, according to analysts from GWEC and MEC Intelligence.
Martand Shardul, policy director for GWEC India, said: “It is encouraging to see the market beginning to bounce back, but to drive a post-pandemic green recovery and realise its climate goals, India will need to adopt a more aggressive climate emergency approach and set clear short-term milestones to enable an even more rapid uptake of wind projects.”
He added that close collaboration will be needed between central and state governments to coordinate tenders, and suggested a roadmap to aid the planning of the supply chain, infrastructure and financing could help.
Market recovery
The analysts believe India will add about 3.1GW of new wind power capacity this year – the highest annual installation rate since 2017.
This follows a slowdown in recent years as the country struggled with a switch from feed-in tariffs to competitive auctions.
India’s record year of 2017 (4.1GW installed) was followed by 2.2GW in 2018 and 2.4GW in 2019, and then just 1.1GW in 2020 — the lowest annual total since 2005.
Last year’s total highlighted that the impact of Covid-19 lockdown on India’s wind sector was more severe than anticipated, with only 1.1GW installed out of the 3.3GW originally forecast. The remaining capacity was either pushed into 2021 or cancelled.
GWEC counts capacity that has been commissioned, and includes partially commissioned capacity for larger projects that are built in several phases, a spokeswoman advised.
Meanwhile, totals were lower in 2018 and 2019 because distribution companies were hesitant to sign off on power contracts awarded in auctions as prices rose, MEC Intelligence CEO Sidharth Jain explained in a press webinar. But since the eighth Solar Energy Corporation of India (SECI) tender in August 2019, all contracts have been signed as prices fell again (see above).
However, this uncertainty had caused projects to be cancelled, he explained.
GWEC's Shardul said the coronavirus pandemic and associated economic disruption means the council now expects some projects to be cancelled outright. “External shocks are the ones we need to be worried about,” he added.
Future expansion
GWEC and MEC Intelligence expect the pace of new installations to double over the next two to three years compared with the average annual installations since 2017, when India switched from feed-in tariffs to auctions and the market slowed down.
The analysts highlighted a 10.3GW pipeline in central and state markets until 2023. They added that over the next five years, 90% of new installed wind capacity will come from federal tenders, followed by corporate procurements and state markets.
Corporate procurement for renewables has started to pick up in India as wind and solar have become cost-competitive with power supplied by distribution companies, GWEC explained.
GWEC and MEC Intelligence forecast 3.1GW of new wind capacity to be installed in 2021, 4.2GW in 2022 and 4.6GW in 2023 (see above).
Hybrid future
Beyond 2023, wind-solar hybrid projects — which can optimise land use and access to the grid to make projects more cost-efficient — will be increasingly important to growth in India’s renewables sector, the analysts believe.
“Land prices have increased. Power prices have increased. Stand-alone wind tariffs are difficult in the current scenario unless you find innovative financing mechanisms” MEC Intelligence’s Jain said.
Meanwhile, Shardul pointed out that in most states in India, solar generation is available only during the day and cannot support evening load peaks, while wind generation is flat during the day and picks up in the evening, providing peak support.
This means the technologies can use the same transmission infrastructure without the need for capacity upgrades. It also means that when a wind-solar hybrid project is combined with storage, they can simulate the generation profile of a peaking power plant.
Shardul added: “We are also beginning to talk about storage. Wind and solar will have a complementary role together in the system, so if in a large utility-scale project we have wind and solar together, we can cut on storage costs.
“It is also important that we work on balancing the grid. Having hybrid projects becomes very important from a load generation profile and management point of view.”
