Stimulation for public sector investment

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After hopes for a recovering wind market in India have been battered by the extremes of weather and politics in recent months, the latest annual report from the Ministry of Non Conventional Energy Sources (MNES) shows concrete signs of movement in the right direction. Through public sector involvement, higher wind tariffs, a shift to more home grown industry and the establishment of a long term renewables policy, MNES seems to be laying a foundation for future growth.

In its new role as advisor to the wind industry, MNES has begun to encourage profitable public power sector companies to develop wind projects. Investments are not only supported by the government's financial incentives, MNES stresses, but they help companies meet their own power requirements.

Through a series of high level meetings, MNES has convinced three such companies to set up wind projects. National Hydroelectric Corporation plans to build a 200 MW wind farm. Pre-qualification bids for the first 25 MW will soon be announced for Edyarpalam near Coimbatore in Tamil Nadu, says the company. The Rural Electrification Corporation will install a 100 MW project, to be handled by the Tamil Nadu State Electricity Board. The National Thermal Power Corporation, India's largest producer of electricity, has announced plans for 60 MW of wind by next year in Tamil Nadu, Karnataka and Andhra Pradesh. MNES plans to meet with 100 of India's top corporate companies next month to encourage further involvement.

In its report, MNES praises the progress of the Indian wind sector in home grown production of machinery. Eighty percent of wind turbines up to 250 kW in size are now produced in India and MNES expects 14 domestic manufacturers to be building turbines up to 600 kW within five years. The country's first export, an Enercon 280 kW E30 unit, was built by Enercon India. It was bought by Western Power Company in Perth, Australia, for use in its hybrid wind diesel plant (Windpower Monthly, June 1998). "We are now in the process of negotiating further," says Yogesh Mehra of Enercon India. A total of eight E30 units are expected to be ordered by the utility.

MNES is also in the process of preparing a 15 year comprehensive renewable energy policy with supporting legislation. The proposal calls for renewables to fill a 10% share of total installed capacity by the year 2012. Currently at 1300 MW, renewables fill about 6% of the country's electricity generation.

Wind's 970 MW share of that is expected to increase by 80 MW in the next half year -- below the original 150 MW target. Only 70 MW was added from April 1997 to March 1998. Total generation from wind, including demonstration projects, now exceeds 2.85 billion kWh a year.

The new energy policy concentrates heavily on reducing pollution. MNES aims to augment grid electricity supply and substitute fossil fuel for renewables in decentralised plant. It also calls for wind, solar, biomass and hydro to bring power to 80,000 non-electrified villages. The policy addresses issues such as project funding and creation of jobs for the large scale growth of renewable industries in India. The Commission of Additional Sources of Energy, which consists of representatives from MNES and the ministries of power, finance and planning, has approved the policy. Parliament is expected to vote on it early next year.


The ministry has also set up the Centre for Wind Energy Technology in Chennai to serve as a technical focal point for development. Its wind turbine test station will be funded by Danida, the Danish aid organisation, while MNES will pay the recurring expenses. Testing of the first turbine is planned for this month, when Danida's loans are expected to come through. "We cannot enforce testing immediately," says MNES. "It has to be done in a phased manner. We hope the initiative will come from the clients."

MNES has prepared master plans for 80 new wind demonstration sites, each at 625 square kilometres, through its wind resource assessment program. Demonstration projects initiated back in 1985 have resulted in 51 MW of wind plant in eight states. Opening the door to widespread wind development in India, the demonstrations have lead MNES to develop a plan for internationally co-ordinated demonstration projects in neighbouring and developing countries like Bangladesh and Sri Lanka. MNES is prepared to pay the entire cost of turbines with the aim of promoting Indian wind technology exports.

In the states

MNES promises future support for the hilly north eastern states of Meghalaya, Arunachal Pradesh, Assam and Mizoram -- none of which have wind turbines yet. A regional policy for private sector participation in renewable projects is expected in coming weeks.

National and state policies and incentives for private investments have played a big role in encouraging wind development (Windpower Monthly, May 1998). "The market is slowly catching on," says Sarvesh Kumar of Vestas RRB. Maharashtra's policy, which includes a relatively high wind tariff of INR 2.60/kWh, has attracted interest. Vestas RRB has erected the first commercial turbine in Thosegar and has plans for five more 225 kW turbines in the state. With orders for 22 MW in hand for Maharashtra and Perungudy in Tamil Nadu, Kumar expects the company to have 50 MW of units sold by March.

Despite its occasional grid problems and INR 0.10/kWh levy for reactive power drawn from the grid, Tamil Nadu is still "the most wind friendly" state, according to Raj Kumar of NEPC India Ltd. Muppandal-Perungudy in Tamil Nadu has India's largest concentration of wind plant at one location, with 380 MW capacity. The state's electricity board buys wind at INR 2.45/kWh, but it has given in to calls for a higher tariff, raising it to INR 2.60/kWh this month. "We should get the high tension tariff for wind power. But the state has not accepted our proposal," says Kumar.

Director of one of the wind turbine manufacturers hit hardest by the cyclone in Gujarat in June, Kumar says the market there is limping back to health. "We now have orders from Gujarat for 12 MW at Lamba and Patelka." NEPC claims 20 MW of orders now, expecting a total of 30 MW of commissions by March.

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