Survival of the toughest

After a year of market uncertainty and lack of credit the rate of wind energy development is picking up again in India, with many saying the slowdown was not in the end as severe as they had feared it would become. Detailed discussion of the problems currently plaguing the Indian wind market were the central focus of Wind Power India '96, the first of a series of annual wind meetings being organised by central government authorities.

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Detailed discussion of the problems currently plaguing the Indian wind market were the central focus of Wind Power India '96, the first of a series of annual wind meetings being organised by central government authorities. The two day event, held at Ootacamund in Tamil Nadu, November 21-21, was hosted by the Central Board of Irrigation and Power (CBIP) in association with the Ministry of Non Conventional Energy Sources (MNES) and Indian Renewable Energy Development Agency (IREDA). The aim is for the meetings to become a forum for across the table discussions with State Electricity Boards (SEBs), MNES, IREDA and planners.

The 83 MW of new wind capacity registered at the end of September for 1996 has proved that the Indian wind industry has staying power, despite the upheaval and uncertainty of an election year. Although far below projections, the 83 MW was above expectations and the mood in Ootacamund was decidedly upbeat after an apprehensive year of a delayed election and budget and 20 months without access to financing. "People were unsure on the government's policy on depreciation. So they waited for the budget before investing further. By the time it was announced with no changes, it was too late to get many wind turbines up by September," explains one seasoned wind observer.

The introduction of the nebulous Minimum Alternative Tax (MAT) on non taxable companies had the wind industry seriously fretting until the government clarified that power infrastructure development would be exempt. The threat of the tax also contributed to wind investment being put on hold. At the same time, IREDA's increased rates of interest on its loans -- coming as they did at a precarious time -- effectively put wind plant orders in cold storage. "Much good has come out of a bad situation," says one industry observer. "The toughest and the best have survived."

Back to normal

Current trends suggest a return to the pre-mid-1996 development tempo as the industry consolidates. Expectations are that 150 MW will be added during the 1996-1997 fiscal year, ending in March, bringing the Indian wind total to over 1000 MW. The target proposed by MNES for the forthcoming 9th Plan period is 2000 MW.

Significantly, private wind power development has now reached 767 MW, more than double the 220 MW set up by the conventional sector. By the end of the current 8th plan period, in the middle of this year, the non conventional energy sector is expected to have provided 7.5% of the 18000 MW installed since 1992. Of this 1350 MW, wind is expected to account for 1050 MW. Of the present 86,000 MW of power generating capacity in India, new renewables contribute 1.5%, or 1200 MW.

According to the recently appointed new Secretary of MNES, Ashok Parthsarthi, the wind industry's turnover was INR 15 billion during 1995-96. "The industry must expedite the process of obtaining type certification as marked out in our guidelines so that the entire sector grows in an orderly manner," he stresses.

Manufacture of wind turbines in India was a topic which came to life at the conference after lying dormant for the past five years. Parthsarthi regretted that not much progress had been made to develop new, efficient models in India. "I urge the wind industry to set up in-house R&D divisions to develop turbines which can operate at low wind speeds and are suited to our grid, environmental and infrastructural conditions. We will also support this activity on a co-operative cost-sharing basis," he said. On the inability of states to keep pace with grid connection of wind turbines, he suggested that SEBs undertake much more advance planning.

Third party sales

Wind could be made more economically attractive if states allowed wind power producers to sell to third parties and not just to utilities. "Since captive consumption mode improves the viability of these projects, third party sales are a necessity," was the stated opinion of S.V.R. Rao, energy specialist at CBIP. Whether third party sales would again be allowed was a question left unanswered. The chairman of the Tamil Nadu Electricity Board, Om Kumar, refused to be drawn on the issue.

Several conference participants pointed out that uptake of wind power onto the grid was not being handled properly by SEBs. Wind, they said, was being blamed for causing a problem with reactive power on the grid which others were contributing to, such as agricultural pumps and devices legally or illegally connected to power lines. Wind turbines, they said, were suffering unaccounted for power losses of up to 10%, losses which the SEBs were not quantifying. While it was generally agreed that TNEB's penalty of ten paisa a kilowatt hour for reactive power drawn from the grid was reasonable, a further increase would not prove viable, said participants. On the subject of reactive power, it was recommended that SEBs provide capacitors at the high tension grid, while wind farms would provide them at source. "We need a mechanism for a continuous dialogue. We are planning to form a standing committee comprising representatives from SEBs, MNES, and so on, so that problems can be sorted out before they get complicated," said Rao.

Too high

IREDA's high rates of interest -- 18% for project financing and bilateral funding and 19% for equipment financing -- came under heavy fire. It was felt that IREDA needed to soften its rate of interest for wind energy, the highest in its portfolio. An appeal was made for simplification of its legal procedures.

It was hoped that all states would soon adhere to MNES guidelines and policies for the 9th Plan period, all to be announced in advance of the plan's start in the spring. Extending performance incentives for generation of wind kilowatt hours was also suggested.

Wind resource assessment, too, should be extended, using 40 metre anemometer masts, more in keeping with modern hub heights than the current 25 metre masts. A macro study to generate a wind atlas for India, and micro level studies for sites with high wind potential, were other recommendations.

CBIP's annual award for wind power manufacturers was presented to NEPC-Micon. Said Rao, "Next year, the institution plans to commemorate the best professional/consultant group, and the best energy development agency."

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