India's Suzlon Energy has taken the world wind power market by storm coming from nowhere to claim ninth place in the top ten list of the most active turbine manufacturers last year and tenth place for cumulative installed capacity in the world to date. The surprise is that few seemed to have seen the Gujarat-based company's rise in the world rankings coming -- even though India ranks fifth among all countries in terms of installed wind power capacity. The country had a cumulative capacity of 1340 MW up to March 2001 and it was surely only a matter of time before some home grown talent made its mark.
Although only five years old Suzlon has a strong heritage, originating in India's Suzlon Group, based in Ahmedabad, which has activities in international trade, textiles manufacturing, hotels and finance. The vision for Suzlon Energy began when the parent company experienced problems meeting the high power requirements of one of its new projects. Its solution was to build a 6 MW wind farm to meet its needs. From there it was only one small step to repeat the process and become a wind plant developer. "Implemented well, this would not only generate good profits, but also progress the environment friendly technology, and make a meaningful contribution towards national development," says the company.
Suzlon Energy was born with the goal of manufacturing "international quality wind turbine generators in a wide range of capacities, and selling them to other companies." An early alliance with Südwind GmbH of Germany (now part of publicly traded Nordex) led to an unwavering commitment to the development of wind energy in India and resulted in Suzlon's meteoric rise in world wind industry rankings.
In the beginning
The company began manufacturing its turbines in Diu, close to Gujarat, where it installed 25 MW using 350 kW turbines at Bhogat. Today it is the only Indian company marketing wind turbines under its own brand. It has two factories -- one in Ahmedabad and one in Mumbai -- and employs more than 800 people. Offering turnkey solutions (in conjunction with Suzlon Developers and Suzlon Wind Farm Services -- both of which were initially divisions of Suzlon Energy), it has installed 178 MW of wind power throughout India, accounting for 13.26% of total installed capacity across the country. More than half of this (95 MW) has come in the last financial year, which closed at the end of March 2001.
The installed capacity is entirely made up of 350 kW turbines, with the exception of two 1 MW units and the 95 MW accounts for more than half of the Indian total installed last year of 172 MW. Behind Suzlon, Enron Wind took 9% of the market with 15.4 MW and Vestas RRB accounted for 6% with 10.8 MW.
The majority of Suzlon's projects have been built in the pro-renewables state of Maharashtra. Having identified a gross wind power potential of 2108 MW for the region, the state has in recent years had a highly progressive wind policy (Windpower Monthly, October 2000). Last year, 110 MW of new wind power was installed in the region; 82% of this (90 MW) came from Suzlon, which also installed six 350 kW turbines in Rajasthan and five in Tamil Nadu last year.
Wind farm comple
xOne of the company's greatest triumphs is the Suzlon Wind Farm Complex at Vankusawade in the Satara District of Maharashtra. Already here the company has commissioned a total of 401, 350 kW wind turbine generators to bring a total of 140 MW on-line by the end of the March 2001. The plan is for the complex to have a total capacity of 250 MW by the end of March 2002, making it the largest single make, single size (350 kW) wind farm in the world, claims Suzlon.
The huge wind farm offers major industrial companies (including Tata Finance, Bajaj Auto, Bajaj Electricals and Savita Chemicals) ownership of their own turbines under a turnkey contract. Suzlon supplies the turbines and takes responsibility for land selection, micro-siting, site infrastructure development, installation of wind turbines, grid connection, 24 hour operation and maintenance services and liaison with government and soft loan arrangement. Significantly, companies are offered financial assistance "at the lowest rates of interest and the longest repayment period," notes Suzlon.
A high standard of performance has seen repeat orders, says Suzlon Energy director Girish Tanti. "Our machines have generated maximum energy per kW installed with the annual availability factor being maintained in excess of 98-99%," he notes.
As well as providing local communities with power -- including the construction of a substation in the hills -- the Vankusawade complex has also contributed significant social benefits. As part of the scheme, Suzlon provides free medical services to the neighbouring village and has set up living facilities for its staff as well as a workshop.
First MW turbine
Suzlon's other great triumph is the installation, again in Maharashtra, of India's first two 1 MW turbines at Kavdya Dunger, near Supa in the Pune District. With a mean annual wind speed of 6 m/s and a group of five hills with elevations of approximately 960 metres, Kavdya Dunger is perfect for the 1 MW turbines, says Suzlon. So far the two turbines in operation are "functioning five per cent above prediction," says Tanti. On the back of this, Suzlon hopes to install around 50-55 1 MW machines here by the end of March 2002. "The 1 MW has been accepted well and we are receiving repeat orders," Tanti says, adding that he expects these projects to set the trend for bigger machines throughout India.
It is hoped that other projects will be built in Maharashtra. The state government has identified 16 further sites for wind power development and Suzlon expects to be in the spotlight. "Maharashtra has been a driving force for wind energy for the past two years," explains Tanti. "It has an attractive sales tax benefit ensured on achievement of stipulated plant load factor."
End of the road
But while progressive, the policy is short term and is scheduled to expire at the end of this year. While acknowledging that opportunities will arise elsewhere (such as Rajasthan where policy is good), Tanti is concerned about the limited lifespan of Maharashtra's policy and about plans for the introduction of sales tax -- value added tax (VAT) -- as outlined in a recent energy policy review document published by the state government. He stresses that for India generally to meet its energy demand and its sustainable development targets (which includes a commitment to source 10% of its electricity from renewable sources by 2010), not to mention foster confidence in the market, a long term policy with the right market incentives "are essential." He notes that investors typically look at a minimum investment period of six years. Policy, he says, must reflect this.
The Maharashtra state government has offered reassurance that alternative incentives will be put in place (Windpower Monthly, October 2000) and Tanti, for now, is willing to accept the move. "If the sales tax benefit is withdrawn from Maharashtra as part of the government's plans to incorporate VAT, the government has assured that an equivalent amount of incentives in another form will be given so that industry growth is not hampered," he says.
But having seen other previously progressive states fail to keep up the momentum (notably Suzlon's home state of Gujarat where policy has not been renewed since it expired in 1998 resulting in Suzlon supplying power to companies at a wheeling charge of 10% compared to the previous 2%), he believes central government needs to become more progressive with all of India's states setting long term targets and policy.
"In India, the wind regimes vary from state to state. The government should introduce adequate incentives in all states to ensure uniform development," he says, adding that "for the industry to survive, it needs to be supported by government."
An eye to Europe
Suzlon's prime objective, Tanti stresses, is to make a turbine which is primarily designed for Europe but equally at home in India. This is no mean feat and the process is ongoing. The entire electronic control circuits have been "tropicalised" with higher thermal tolerances in order to cope with India's high ambient temperatures, while electrical and electronic systems have been upgraded to withstand surges and power fluctuations. Furthermore, thermal sensors for the control and monitoring of generators have been added. The turbine, Tanti says, is now 40% locally made, including tower, hub and generators, but constraints still exist as far as gear boxes go: "Volumes are not there to justify investment costs in the technology," says the company.
Confident of its product, Suzlon is one of just two companies to have sent its turbines to be tested at India's Centre for Wind Energy Technology (C-WET) at Kayathar, Tamil Nadu. Its 1 MW machine was sent in June. The role of C-WET is significant to the development of the industry, Tanti stresses. Once the transfer of knowledge and technology from Denmark's national wind turbine laboratory at Risø is complete, "C-WET can have an important role to play for supporting the region," he says, referring to the whole of Asia.
It looks unlikely that Suzlon will be making turbines bigger than 1 MW. "Under the present infrastructure available in the country, turbines bigger than 1 MW are not feasible," Tanti notes. For now, the company intends to continue its expansion in India and has its eye on other Asia markets, notably China, Japan, Vietnam and Australia. In its latest set of world wind market predictions, Denmark's BTM Consult is forecasting steady growth in the Asian market to 2005, with an estimated installed capacity of 3480 MW. Tanti says he is actively looking for export opportunities and hopes to have something in place by April 2002.
"The Asian market is expected to grow. However, governments must appreciate it is important to promote wind energy first." In this he means getting the message across to the public, as well as through to public officials.
Even if the message about wind power's viability takes a long time to get through, Tanti is not a man to be deterred. Having weathered the withdrawal of renewable policies in Gujarat and now facing a similar situation in Tamil Nadu, many a man would have considered walking away from it all. But not this one. "I am here to stay," he simply says.
At number ten in the world rankings, number one in India, continued growth during a slowing economic climate, plenty of financial muscle to draw on, and facing an ever widening market he and Suzlon Energy would seem to have everything going for them.