Tapping the potential of Andhra Pradesh

Google Translate

Bordering India's leading wind state of Tamil Nadu, Andhra Pradesh hopes to step out of the shadows to become a key manufacturing hub for the wind industry thanks to its new policies, strong infrastructure and stellar location. With it, a new turbine manufacturer, who believes India now needs to step up a gear, plans to take centre stage

A two-hour drive from India's windropolis of Chennai in Tamil Nadu -- which hosts Vestas and the national Centre for Wind Energy Technology, among others -- lies the tiny hamlet of Mambattu in the state of Andhra Pradesh. While Andhra Pradesh is as yet untested as a serious centre of wind power development, it is emerging as one of the country's industrial hubs -- and as such is on a mission to woo wind turbine manufacturers to the area. A series of tax-friendly initiatives, power purchase prices by concession, well-paved roads, access to good highways connecting it to big conurbations and a relatively good infrastructure are all attractive incentives, now spelled out in black and white with the publication of a seriously pro-wind policy.

Keen interest from the wind industry has resulted. The first company to take the bait is Regen Powertech, a relatively young firm based in Chennai. It was established by Madhusudan Khemka and R. Sundaresh, early directors with the Khemka family's former wind turbine production company, NEPC Micon, an offshoot of the Danish Micon company before it merged with Vestas. The main partner in Regen is Andhra Pradesh's Nuziveedu Seeds Ltd (NSL), while Indivision, the private equity arm of Future Capital, an Indian financial services company, holds a 33% stake.

Regen Powertech has a licence agreement with Germany's Vensys, recently taken over by Chinese turbine manufacturer Goldwind (page 42), to make the Vensys 1.5 MW wind turbine design under licence. The agreement is for technology know-how and future upgrades of the direct-drive design and covers Sri Lanka, Nepal, Bangladesh, Pakistan and Bhutan as well as India, where it hopes to fill a potential gap in the market. With the country's leading turbine manufacturer, Suzlon, concentrating heavily on exports, "a vacuum has been created which we intend to fill," says Khemka.

In business

Regen, having acquired over 44 acres of land in Andhra Pradesh, has opened its manufacturing facility for business. The first two turbines have come off the production line and both are destined for a 50 MW wind farm at Bhimasamudra in Chitradurga, Karnataka. They will be joining 18 MW of Vensys-designed turbines already in place on site, having been delivered by Spain's Eozen, another Vensys licensee set up in Andalucia nearly three years ago (Windpower Monthly, June 2006). NSL ordered the 12, 1.5 MW machines from Eozen last year under a contract that forms part of a wider deal by which Eozen will provide turbines until Regen's own facility is fully up and running, or whenever capacity falls short of demand. "Our policy is to support Vensys licensees anywhere in the world," says Eozen's Manuel Marquez. For the time being, Marques says it is too early to say how much more will be ordered beyond the initial 18 MW.

Initially, Regen's own factory will produce 200 wind turbines a year, with plans to gradually increase that to 500 by 2010. In subsequent phases, Regen also plans to manufacture key components like towers and power conversion systems. Blades are being supplied by LM Glasfiber, with an order for 54 blade sets due for delivery by the end of this year. By end 2009, Regen adds, it will have taken delivery of blades for 150 turbines.

The company is confident it has the right product offering and cites the Bhimasamudra wind farm as a successful demonstration of its strategy. "We expect a plant load factor of 32%, which is high because of the technology we bring that taps low wind areas productively," says Khemka. The Vensys 1.5 MW is an advanced machine able to comply with grid code requirements, he continues. An added advantage is that Regen can ramp up manufacturing without being constrained by the current shortage of wind turbine gearboxes, he says. "With the country running out of high wind speed sites, gearless is the way to go," according to Khemka.

Construction service

Not only will Regen make wind turbines. It also plans to pro-actively create a market for them by offering turnkey solutions for co-development construction of 100-200 MW projects in India to international wind project developers, such as Australia's Roaring 40s and BP Alternative Energy. Any agreement reached will require that a certain percentage of the turbines to be installed must be Regen units. "International developers are keen to come to India, but the bureaucratic hurdles make it difficult for them to buy land, get clearances, etcetera," says Khemka. "They need an Indian partner offering them turnkey solutions. We want a small share for that support." Regen says it is talking to a number of companies about its development and construction service, says Khemka. Both Roaring 40s and BP Alternative Energy entered the Indian wind market in the last two years.

Stale market

Khemka feels the Indian market has turned stale over the last decade. Nothing new has happened, he moans, except for the emergence of larger machines. Even policies and duty free exemptions for certain products largely remained unaltered, he says. With Andhra Pradesh's new policy things are beginning to change. "If in China developers can look at hundreds of megawatts, why not in India? We are creating a new market here," he says.

The state has a potential for about 2100 MW of wind capacity, but until now just 107 MW has been developed. Its new ten-year wind policy is promoted through its nodal agency, the Non-Conventional Energy Development Corporation of Andhra Pradesh (Nedcap). "The objective of the recently introduced policy is to encourage optimum utilisation of the available wind power potential in the state by facilitating the adoption of updated technology through private participation, balancing the interest of the customers and the developers," says Nedcap's vice chairman and managing director, MP Reddy. He expects 200 MW of new wind plant to be online by December 2009, while applications for a further 159 MW are pending approval.

Release of government land in Andhra Pradesh for development will be carefully monitored and initially restricted to ensure there is no pre-emptive occupation by any developer or manufacturer with a view to monopolising potential sites. Under the policy, rates for wind-generated electricity are set at INR 3.10/kWh ($0.073/kWh) for the first ten years, but power purchase agreements can be signed for up to 20 years. Favourable wheeling and transmission charges are also offered, but banking of unused energy is not allowed.

Carbon credits and related revenue are to be shared if the energy is being sold to a local electricity distribution company, rather than used on site or sold to a third party. The wind farm owner can retain 90% of the value of credits under the Kyoto Protocol's Clean Development Mechanism, with the remaining 10% of revenue passed onto the distribution company. The new policy, Reddy insists, will attract developers to the state.

Regen agrees. It believes that with labour readily available and Chennai close by, the state offers the perfect base for its operations. "Heavy cargo can move in any direction and there is smooth efficient clearance," notes Khemka. "The chief minister even inaugurated the factory in March to show the state's focus on renewables."

Regen will not confine its activity to Andhra Pradesh. It is currently in the process of acquiring land for wind farms in other states. These include plans for 150 MW in Karnataka, 120 MW in Gujarat and 100 MW in Tamil Nadu. It is also in talks to develop 50 MW projects in neighbouring Pakistan. This "makes logistical and cultural sense," says Khemka. "We expect to get two projects of 50 MW each near Karachi." Turbines will be delivered by road and heavier equipment by sea.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in

Latest news

Partner content