Indian turbine manufacturer Suzlon is in expansion mode. The opening of its new wind plant in the French-influenced territory of Pondicherry in Tamil Nadu, the planned launch of its 2 MW turbine in mid 2004 and brisk growth have given the company a new air of confidence. Indeed, it now expects to increase its installation rate from 300 MW a year to over 1000 MW a year in the near future -- if it can find the money. "This major expansion plan requires immediate funds and we are looking at raising debt from the market," says Suzlon's Tulsi Tanti.
The new developments are primarily to target export markets. Having completed the supply of 950 kW turbines for a 22.8 MW wind farm in the United States in Minnesota, the company is now negotiating deals with companies in the US and elsewhere for the export of its 1.25 MW turbine for projects with a combined capacity of around 50 MW. Over 125 of Suzlon's 1.25 MW turbine have already been sold.
India remains a key market, Tanti says. Already 83 MW of its 150 MW wind park at Sanganeri, Tamil Nadu, has already been installed using its megawatt class machines. Suzlon is a relative latecomer to India's leading wind development state, but became interested in the potential of Tamil Nadu last year following the introduction of the Textiles Upgradation Fund (TUF). This fund offers a 5% reimbursement on the interest actually charged by financial institutions on sanctioned textiles projects. With 18% of costs for finished textiles for export being for power, the product becomes competitive with TUF support.
"Textile units investing in wind projects in Tamil Nadu have created a new market for the sector," explains Tanti, noting that as a result of TUF the company's Tamil Nadu client list now includes corporations such as the RAMCO, Amarjyoti, Eveready, and Sarvana, all of which are investing in the 1.25 MW machine.
Activity in other states is also planned. The company has recently submitted a proposal to the government of Gujarat for a 400 MW wind power project in the Kutch region. Tanti says he expects the project to be completed within five years, but only if "positive steps are taken. Presently, due to the proposed unbundling of the electricity board and policy issues under discussion, the overall situation is fairly unclear."
He points out that two years ago the 250 MW Vankusawade wind farm in Maharashtra, slated to be one of the largest in the world, was well underway to completion with 201.6 MW installed. Then the project was brought to a grinding halt when Maharashtra jettisoned its wind program. "Since investors are scarce in Maharashtra, due to lack of policy, no new installations are taking place. Only if a new policy, which is conducive to the wind energy sector is announced formally, will we see the Vankusavade wind park on its growth path once again." A new policy for the state has been announced recently (page 42) so the project's development could begin again soon.
One of top five
Meanwhile Denmark's NEG Micon says India is close to becoming one of its top five markets. Expecting to install 100 MW in the country this year, the company's Ramesh Kymal says he is confident that company turnover in India will be doubled in 2004. "While there are no firm orders as yet, there is a strong indication that next year around 500 MW will be added to capacity and we will have a market share of forty percent," he says. "Good GDP growth needs to be fuelled by power and the electricity act has recognised renewables as a viable energy source. We are free to sell [electricity] to third parties, making the projects bankable," he adds, referring to the country's new national electricity legislation.
Financing, he says, remains the biggest problem in India and lack of bureaucratic will to clear forest land in Karnataka is hampering growth. Like Tanti, he notes the success of the TUF in encouraging the textiles industry to turn to wind power. He hopes to see that now replicated with the steel and cement industries.
NEG Micon India is also on the way to becoming a hub for exports. Its facility in Chennai has been set up as a production base for NEG Micon's worldwide requirements. "From next year, we have decided to supply fifty percent of our turbines up to 1 MW in capacity for export," Kymal says.
A project in Sri Lanka is on the cards. The company was the first to put up a 3 MW pilot project in Sri Lanka and this is set to be expanded to 50-80 MW. The project, however, is awaiting legislation. "We are hopeful that peace talks in Sri Lanka will open up the north," he adds. Also in Indian waters, initial studies in the Maldives show good winds on the islands, potentially making them another new market: "The Maldives are very conscious of eco-tourism and keen to promote renewables. We expect to be looking at the market there." The company, he continues, has also been approached by private investors to conduct wind studies in Chittagong, Bangladesh, where there is a shortage of power and wind power can compete with conventional power without incentives.
Another turbine manufacturer with an eye on India is GE Wind Energy. The company is still testing the waters in India with its first 1.5 MW turbine expected to be installed in Tamil Nadu's Coimbatore district by March. As part of its efforts to exploit synergies with the rest of the GE group's businesses, GE Wind has shifted its office from Mumbai to Bangalore, something it says will bring it closer to its potential customers. In addition, GE India is believed to be studying the offshore market, and if a study initiated by the Ministry of Non-conventional Energy Sources is completed, GE India is widely expected to be one of the first in the country to set up offshore wind stations.