Neelam Mathews: What is the role of MNES in wind?
Ajit Gupta: It is no longer to give direct aid. It is supportive. Currently our main function is to act as facilitators to remove bottlenecks and rationalise policies to see that wind is put on a solid footing. We are devoting more and more time to bringing together private investors and state electricity boards. We are moving faster as our wind resource assessment programme proceeds. We feel this is the basis on which the success of India's wind programme lies.
What main elements of wind policy are you currently reviewing?
Customs duty, which is fixed at 25% for renewables power plant, we hope will soon be reduced to 20% -- the same level as for conventional power plant. We also feel the 100% depreciation for renewables projects has to be looked into. If not administered properly, it could lead to the unfortunate kind of development seen in California in the early years of wind energy there. And we are trying to promote our guidelines to the states.
What about manufacturing wind turbines in India?
There are plenty of signs that it is going on. Even the public sector company, BHEL, has started [making Danish Nordex turbines under licence]. Today nearly all the major players in international wind energy are represented in India. Recently the US has even been looking at joint ventures -- in addition to Cannon, Zond [Triveni Engineering] and even Kenetech Windpower, I believe, may come in.
Except for blades, all wind turbine parts are made in India. Following the agreement with NEPC and LM Glasfiber to make blades in Tamil Nadu, hopefully all the components can now be made here. But as long as the exemption on import duty remains for up to ten wind turbine components, there is no incentive to buy Indian blades or make them here. This is a constraint on Indian manufacturers. We will be considering the question of the duty free exemption clause for these ten components.
What are the main problems for wind energy at the moment?
Now the government has given wind sufficient push for it to stand on its own feet, at MNES we are anxious about careful siting and quality. We need to pay attention to the performance of projects. We're getting our act together on a wind test centre which will be set up at IIT in Madras. As part of this project, being funded jointly by MNES [about $4 million] and UNDP and Danida of Denmark [$4 million] a test station will also be set up at Kayathar, similar to that at Risø in Denmark. We expect it to be functional by next year and are sure that it will help in quality assurance.
In what sense will MNES play a supporting role for wind energy?
Through our demonstration projects. Wind would never have taken off in this country if MNES had not played a role. Whenever we set up a demo project we provide the necessary infrastructure, the grid, roads and so on that are usually lacking in remote areas. The development in Tamil Nadu, for example, is primarily due to our initial projects. A good example of a project failing is in Karnataka. We had given a 4 MW demo project to the state in Jogimatti, which it returned to us because the private sector should develop it. But no private company wants to invest in an area without infrastructure and nothing has happened. If the MNES project had been accepted the whole area would have been flourishing by now.
Which regions is MNES looking at for its projects?
We have a 2 MW demo project in Coimbatore district in Tamil Nadu, although the gold rush site there is Kethanur with miles and miles of land with good winds. We also have a demo inland project in Rajkot district and there seems to be good potential there. And at Dhank in Gujarat there are 650 hectares of land, now cleared for development, with another 700 hectares still being discussed.
There seems to be almost no talk of using the World Bank loan at the speed expected.
The speed of development has overtaken the World Bank line of credit in India -- for wind power at least. There has been a slight delay in implementation. This could possibly be because the World Bank is not used to lending for small programmes and to the private sector, which is why the procedure has become so complicated. Discussions are being held to see if perhaps a different set of guidelines could be used where conditions of lending are simpler. We're all learning together.
Does this mean that India is not looking for aid any more?
Let's say that it isn't our only resort. The World Bank projects are for 75 MW. Currently the private sector has proposed a total of 900 MW and contract negotiations are being held (see main story).
What is the next step?
We are looking at the next class of wind turbine -- the 400 kW. Our demo projects will use new turbines and new sites.