Ready to think big in India

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Until now, conventional wisdom has held that India's relatively poor infrastructure meant that transport and installation of megawatt scale wind power technology was impossible. Think again, says the Indian wind industry. The country is advancing fast and there is plenty of scope for large wind turbines, say several market players

That India's largest turbine is being unveiled in Tamil Nadu is a propitious sign of the times. The south Indian state has the highest installed wind power capacity in the country thanks to its favourable renewable energy policies which, critically, have remained stable over a number of years, and to the ever growing demand for wind power by the region's textiles industry. The launch of a 1.65 MW turbine in Tamil Nadu could now dispel the "myth" that India is not ready for large turbines, says NEG Micon (India).

The company, which became part of the Vestas group following the merger of the two Danish rivals in March, is putting the 1.65 MW unit up at its 56.4 MW Kongalnagaram wind farm in Coimbatore, western Tamil Nadu. With a rotor diameter of 82 metres and hub height of 78 metres, the turbine is not only the largest in the country measured by installed capacity, but also the tallest and widest. The model is ideally suited for low to medium wind resource sites like Kongalnagaram, says the company's Ramesh Kymal. A sister unit is to be installed at Tiruvannamalai, also in Tamil Nadu.

Orders for a further 12 have already been placed, says Kymal. By the end of the year, he expects 60 of the machines to be operating in India, accounting for a third of company business this financial year, ending March 2005. By next year he expects the 1.65 MW unit to account for the bulk of the 400 MW sales target that the former NEG Micon (India) had set itself.

Kymal is not alone in believing the time is right for large turbines in India. With a 1.25 MW machine already doing well on the market, India's Suzlon has a 2 MW model on the way. A prototype is going up in southern India later this year. The Indian turbine manufacturer acknowledges that the number of sites suitable for use of a bigger machine in its home country is limited. The 2 MW turbine is mainly being developed for the overseas market but, nonetheless, the time is right, the company says, for multi-megawatt wind turbines to take their place in India.

Indowind Energy agrees. It is looking for technology tie-ups to ensure more efficient utilisation of wind energy. "This will help us to generate more power and give larger scope of consumption for our power consumers," says the company's R. Balajee. Indowind operates 22.72 MW of wind plant and has 10.35 MW under construction. Balajee is optimistic about the future for larger scale development. With a series of states adopting the recommendations of the electricity regulatory commission for catalysing local wind markets, and the Electricity Act coming into effect, improvements in policy and better tariff structures are on the way, he says. "We are planning expansion with higher capacity turbines," he continues.

Some scepticism

There are those, though, who remain sceptical about India's suitability for large turbine deployment. Enercon India's S.V. Kulkarni is one of them. "Big does not mean technical improvement," he stresses. "They need a higher output, better quality of power and an improvement in the plant load factor. Besides, in India, land is no longer easily available." As infrastructure improves, so will India's ability to move large components, he says. "At the moment big means bigger generators, better roads and bigger cranes, all of which come at a premium and are not easily available. At Enercon, we want to go step by step."

Undeterred, Kymal is bursting with optimism: "We have tapped only 6% of India's potential and with the new electricity act, wind energy is on the threshold of a new revolution." He is in no doubt, he adds, that with the tempo increasing, India will reach its target of achieving 10,000 MW from renewables by 2012. Larger machines will be necessary for reaching that goal.

As well as demand for new wind power developments, the repowering of old wind stations with state-of-the-art turbines is expected to bolster demand for multi-megawatt machines. Already in Muppandal, Tamil Nadu, companies are looking at the potential for repowering projects. "It will happen soon. An awareness of wind is already apparent among investors," Kymal says.

Initial hurdles, such as lack of infrastructure for handling huge pieces of machinery, do have to be confronted, however. For the 1.65 MW launch at Kongalnagaram, transport of the 40 metre long blades along narrow roads was a major headache. Hydraulic axles were imported to steer the trailer -- anyone in the dark could have believed it was a jumbo jet being steered in the distance, jokes Kymal. NEG Micon (India) has tied up with ABG Heavy Industries, a major player in port and infrastructure development, for the installation of the turbines at different locations across the country. "Cranes are no problem now, though hilly areas could still be an issue," says Kymal. Plans for high altitude wind farms, such as Vankusawade in Maharashtra, will most likely not be based on megawatt scale technology.

For the first 1.65 MW machine, components have mainly come from abroad. But by the end of the year, Danish rotor blade supplier LM Glasfiber expects to be able to make large blades at its Bangalore facility in India, in which it has already invested in a $6.6 million upgrade to meet the new demand. "The blades will be delivered to deadline," assures LM Glasfiber's Nirmal Gupta, who already has his hands full with an order for 34 sets of blades for export to China in August, where they are bound for a new wind station equipped with turbines from GE Energy.

NEG Micon (India) is also spending $2.2 million this year to expand its manufacturing facilities in Chennai and Pondicherry to include production of large turbines plus an additional $5.5 million to upgrade plant and equipment. In addition, $24.5 million is planned for investment in sub-stations and other facilities. As well as the Indian market, the company is banking on increasing its export activity to other countries in Asia. Of the $223 million orders it has for 2004, 5% ($11.12 million) are for the export market, although all of these are for machines with rated capacities under 1 MW.

The company hopes to boost sales by 5-20% in 2005, says Kymal, although this will depend on plans yet to be announced following the merger with Vestas. "We expect synergies of size," is all that Kymal says. As yet, no decision seems to have been taken on the Indian operations. Vestas has a joint venture with RRB of India for the manufacture of 225 kW and 500 kW turbines, while NEG Micon (India) supplies 750 kW, 950 kW and now 1.65 MW machines. The only real change on the horizon expected is a gradual discontinuation of the 950 kW machine. "It is not ideal for major sites, barring Karnataka, with slow winds, where the 750 kW has been found to be most effective," says Kymal. The indication is that the company's existing operations in the country will continue largely unaltered.

Highest ever

Tamil Nadu is expected to remain a key market. It is no accident the company launched its 1.65 MW machine in the state. More than half of the new wind power capacity installed in 2003-04 ended up in Tamil Nadu -- 317 MW of the 615 MW installed in India last fiscal year, bringing the country's cumulative capacity to 1869 MW by the end of March. Indeed, this is the highest annual installed capacity ever by an Indian state.

Indian Wind Power Association vice chairman K. Kasthurirangaian notes that if everything continues on track, the state could see an additional installed capacity of about 450 MW during 2004-2005. Kymal agrees. "The success of wind energy in Tamil Nadu is not an accident," he says. "While nothing has happened on privatisation of utilities, the state government needs to be praised for its stable policy with the bureaucracy firmly behind wind. It has resulted in a proactive approach in which the government, for instance, allows private operators to set up infrastructure like substations against grid connection charges. This has accelerated growth."

Moving out of Tamil Nadu

Tamil Nadu's status as the wind industry's most favoured state could rapidly change, however. With central government leaning heavily on state governments to stimulate markets for wind power, Tamil Nadu is no longer the only place courting both wind turbine manufacturers and wind project developers. Other state governments are beginning to recognise the benefits of attracting the economic activity that goes hand in hand with wind power development. Tamil Nadu has also introduced a 4% sales tax, making it far less popular as a base from which to do business.

NEG Micon (India) has already decided to partially escape the new tax burden and open a factory in the independent union territory of Pondicherry on the Tamil Nadu coast, while still retaining its main base in Chennai, Tamil Nadu's capital. Suzlon, too, has settled on Pondicherry for a facility in southern India, instead of the more natural choice of Chennai. Suzlon's base to date has been in the independent territory of Diu and Daman between the northern and central coastal states of Gujarat and Maharashtra. Enercon, too, is shunning Tamil Nadu as a base, preferring to stick to Daman in Maharashtra despite its large projects in the southern state.

Indeed, Maharashtra is rapidly taking over from Tamil Nadu as the wind industry's preferred state to set up in. Following the edicts of India's new Electricity Act, it has enthusiastically embraced policies to stimulate a wind market after close consultation with the Indian Wind Energy Association (box). The state's green power policy expects to stimulate $17.8 million a year in new economic activity. Moreover, the Electricity Act and power sector reforms introduced by the national government means wind power is increasingly on the radar of serious power industry players like Tata Power & Reliance. "Big corporations are now seeing wind power as an investment opportunity," confirms Kymal.

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