Wind Energy

 

Market overview:

Wind energy, which is already playing a significant role in providing electricity in parts of the globe, presents both large and small opportunities to a range of businesses.The Global Wind Energy Council (GWEC) in its ‘Wind Force 12’ forecast estimates that by 2020, wind would become a US$ 67 billion business in annual terms. GWEC predicts that in 2013, global wind generating capacity will stand at 332 GW, up from 120 GW at the end of 2008. During 2013, 56.3 GW of wind generating capacity will be added, more than double the annual market in 2008. The year-on-year growth rates during this period will average 22%, which is modest compared to an average increase of 28% over the last ten years.

In India a total wind power capacity of 10,386 MW has been established up to June, 2009 against an estimated potential of about 48,500 MW for setting up wind farms @ 12 ha/MW in sites having wind power density greater than 200 W/ sq. mt. at 50 m hub-height. The Country is now the fifth largest wind power producer in the world, after USA, Germany, Spain and China.

The cumulative investment is currently more than Rs. 25,000 billion; expected to touch Rs. 35,000 billion by 2010.

Business opportunities by scale of investments

Scale of Investment Type of Opportunity
Low
  • Consulting for the wind energy industry
  • Training people for the wind energy industry - training on installation, maintenance and repair
  • Wind turbine and wind farm maintenance
  • Setting up micro wind turbines on private farms and residences
  • Wind turbines and components distribution
  • Land owners and farmers can lease/rent their land for wind farms
Medium
  • Developing software that can be used in wind turbines - such as monitoring and instrumentation software
  • Setting up medium scale wind turbine manufacturing plants
  • Setting up manufacturing plants for components and accessories for the wind energy industry
  • Setting up R&D facilities for new research into wind energy
High
  • Setting up large-scale wind turbine manufacturing plants
  • Setting up large wind turbine power plants
 

Advantage India:

  • India is endowed with a large, viable and economically exploitable wind power potential.
  • Over the last 10 years wind capacity has grown at a CAGR of 22%.
  • Cumulative installed capacity is expected to reach 12 GW by 2010.
  • India’s potential is conservatively estimated at 45,561 MW for setting up wind farms @ 12 ha/MW in sites having wind power density greater than 200 W/ sq. mt. at 50 m hub-height.
  • Indian government envisages a capacity addition of 10,500 MW during the 11th Five – Year Plan period (2007-2012).
  • India is placed at the third position in the world in terms of new additions in 2008 and this corresponds to an overall increase of over 40% in new wind power stations.
  • India is net exporter of wind turbines and wind turbines components. Indigenously produced wind turbines and components valued at about US $ 655.4 million were exported to Australia, Brazil, Portugal, Spain, Turkey and USA during the Indian fiscal year 2008-09.
  • A programme entitled “Small Wind Energy and Hybrid Systems” is developed every year for the small wind-power station segment i.e. those with a capacity up to 30 KW and wind-powered water pumps produced in India.

Promotional Policies

Fiscal and financial incentives:
  • Concession on import duty on specified wind turbine parts
  • 80% accelerated depreciation over one or two years
  • 10 year income tax holiday for wind power generation projects
  • Excise duty relief on certain components
  • Some states have also announced special tariffs, ranging from Rs. 3-4 per kWh, with a national average of around Rs 3.50 per kWh
  • Wheeling, banking and third party sales, buy-back facility by states
  • Guarantee market through a specified renewable portfolio standard in some states, as decided by the state electricity regulator by way of power purchase agreements
  • Reduced wheeling charges as compared to conventional energy

Land policies:
  • The Ministry of Environment and Forests has issued guidelines for diversion of forest lands for non-forest purposes, particularly to enable wind generation
  • Clearance of leasing and forest land for up to a period of 30 years for wind developers.

Financial assistance:

The Indian Renewable Energy Development agency (IREDA), the premier finance agency of the Government of India provides soft loans for renewable energy projects, particularly for demonstration and private sector projects

Wind resource assessment:
  • The Government of India has set up the Centre for Wind Energy technology (C-Wet) to map wind energy potentials
  • The C-WET has set up more than 1,000 wind monitoring and wind mapping centers across 25 states
  • Wind mapping at 50 meters (C-WET) and 60-80 meters height (private companies)

National Feed-in-Tariff

In June 2008, the GOI announced a national generation-based incentive scheme for grid connected wind power projects under 49 MW, providing an incentive of 0.5 Rupees per kWh (0.7 euro cents) in addition to the existing state incentives. Investors which, because of their small size or lack of tax liability cannot draw any benefit from accelerated depreciation under the Income tax can opt for this alternative incentive instead.

State Policies:

A number of State Governments have implemented quotas for a renewable energy share of upto 10% and have introduced preferential tariffs for electricity produced from renewable sources. In addition, several States have implemented fiscal and financial incentives for renewable energy generation; including energy buy back (i.e. a guarantee from an electricity company that they will buy the renewable power produced), preferential grid connection and transportation charges and electricity tax exemptions.

Some States with Renewable Portfolio Standards (RPS) or other policies to promote wind generation, have introduced feed-in-tariffs for wind generation which are higher than that for conventional electricity.