India

India

Firm renewables policy still missing at all levels -- India activity only in a few states

India, with 1507 MW of wind plant in operation, is keen to maintain its position as the fifth largest wind power market in the world. In the current financial year, 167 MW has gone on-line so far and this is expected to reach 250 MW by the end of the year, March 31, keeping pace with government targets, according to the Ministry of Non Conventional Energy Sources (MNES).

Much of the new capacity was down to the extension of existing wind plant with 10.2 MW going on-line in Karnataka, 6.7 MW in Rajasthan, 19.7 MW in Tamil Nadu, 0.5 MW in West Bengal and 130.4 MW in Maharashtra -- the only state to have had pro-wind policies in place as specified by MNES. Maharashtra, with 320 MW of wind and another 100 MW to be commissioned before the end of this month, has clear regulations for wheeling electricity on its power lines, banking wind power for later use in times of power cuts and sales of electricity to third party customers. The wind sector is also exempt from sales tax.

But Maharashtra's wind policy expires March 31, though the wind purchase price has been set at INR 3.147/kWh ($0.065/kWh), with a built-in annual increase of 5%. A new state policy is "actively under consideration by the state government," says Girish Tanti of Suzlon Energy, India's only home-grown wind turbine manufacturer. Continuing the sales tax break is a must, he says.

In contrast, Tamil Nadu, once the wind market trend-setter, continues to lag behind. The Tamil Nadu Electricity Board fixed the purchase price for existing and future wind projects at INR 2.70/kWh ($0.055/kWh) for five years, but says it is so financially strapped it can only pay INR 2.25/kWh ($0.046/kWh. The balance will be paid as and when the utility's financial health improves, it says. "Unless third party sale is introduced in Tamil Nadu, we do not see any significant contribution in wind energy sector," says Indowind's vice president R. Balajee.

He says the states to watch out for in 2002 are Maharashtra, Karnataka and Rajasthan, which will see serious development. Windy Kerala in the south is also attracting attention.

Minister rules

Meanwhile, the minister for non-conventional energy, M. Kannappan, has again proposed a mandatory target on all states to produce 10% of their power from renewable sources. "This provision is likely to be incorporated in the new Electricity Bill," he says. Whether it will be part of the long awaited new national policy on renewable energy remains to be seen.

A clear trend in 2001 was the first use in India of higher capacity turbines -- with Suzlon introducing a 1 MW machine and NEG Micon clinching sales for its 750 kW unit. For Suzlon it was a good year. Not only did it deliver 45% of all new turbines in India, it became the first Indian company to rank among the top ten most active wind turbine manufacturers worldwide. It also started its own blade production, at Daman in west India, the third company in India to do so after LM Glasfiber of Denmark and Germany's Enercon.

There is also a feeling of serious business about the wind industry. "No longer are investors in it for short-term gains. They are now into power consumption," says one observer. "Serious investors, including giants such as the Tatas and Bajaj group have contributed to the trend." The major oil companies who expressed interest in supporting the MNES wind efforts, ONGC, BPCL and NTPC, failed to follow through on their promises early in 2001, however. If they can be galvanised into action, at least 250 MW of development will result from plans already laid.

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