Over 3,000 MW of ageing turbines (sub 500kW capacities) are located in high wind sites. Tulsi Tanti, Founder, Chairman and Managing Director, Suzlon Group, believes that they can be repowered with upgraded technology and the potential of the sites can be maximised for higher energy yield.
What are the current challenges faced by wind turbine manufacturers?
Last year was challenging as the wind industry witnessed slowdown due to the transition from feed-in tariff (FiT) to competitive bidding. This impacted margins and created temporary uncertainty in terms of volumes.
The industry is now on a growth trajectory and there is a clear visibility of increasing volumes. FY19 would be the start of a high volumes market with central- and state-level auctions taking place in India. The sector is expected to witness exponential growth with approx. 10-12 GW volumes being met each year.
Availability of grid and land infrastructure at the state level is a matter of concern and the state governments need to invest in that area well in advance based on the available wind and solar resources in the state.
Renewable energy needs large-scale funding; so banks and financial institutions should earmark a certain percentage of finance for these projects. Finance should also be made available for longer periods of time, say, 20 years. The new emerging market scenario would require remodelling of the working capital requirements of original equipment manufacturers (OEMs), vendors, developers and generators. This will ensure lower cost of energy that would benefit the end consumer.
What is the rationale behind the wind-solar hybrid policy?
There is a huge opportunity in wind-solar hybrid projects, given the complementary cycles of generation and better utilisation of the installed infrastructure. However, a dedicated policy for hybrid power generation is still awaited and we believe it will take some time for this opportunity to translate into commercial scale. Wind-solar hybrid has multiple benefits to offer as both the sources complement each other. One does not have to duplicate costs such as land and evacuation infrastructure. In order to push it on a mass scale, it would be good to initiate FiT regime for wind-solar hybrid for a few years before taking the "auction" route, as it is an untested ground.
Is retrofitting of wind turbines possible? If yes, what are the pros and cons and how is it likely to impact the power purchase agreement (PPA) of states?
Over 3,000 MW of ageing turbine (sub 500kW capacities) are located in high wind sites. They can be repowered with upgraded technology and the potential of the sites can be maximised for higher energy yield. Repowering enables utilising the same land parcel to generate double the energy by deploying next generation wind turbines that give higher plant load factor (PLF). Suzlon is the custodian of approx. 30 per cent of wind assets of 3,000 MW, repowering the potential identified by the Ministry of New and Renewable Energy. We have the latest technology to repower the older fleet.
However, for a project size of less than 10 MW, replacing the old wind turbines would be tough to compete in the "auction" process initiated by the government. In order to make repowering successful, it would make sense to continue with the FiT, as project sizes would be less than 25 MW.
Wind manufacturers are receiving benefits on working capital in the wake of large-scale projects.
How much will this contribute to meeting the 60 GW capacity target by 2022?
There is a difference in timelines of Solar Energy Corporation of India (SECI) versus FiT regime, and hence financing agencies need to relook their products in the changing scenario. Also, with a firm PPA of 25 year, the time is right to get into an amortisation schedule of more than 15 year and the requirement of mezzanine capital would also be there. Given that PPAs are now secured for longer tenures and get stabilised payments from central bodies, renewable energy projects should be considered for longer period financing up to 20 year. Availability of funds will lead to faster implementation of projects and will contribute to surpassing the government's target of 60 GW by 2022.
How has the transition been from the FiT to competitive bidding regime?
FY17 was a slow year due to transition from FiT to competitive bidding. Temporary uncertainty prevailed in terms of volumes and margins were impacted. The wind industry is now on a growth trajectory with a healthy order flow owing to SECI I, II, III and state-level bids in Tamil Nadu, Gujarat and Maharashtra. We are seeing big scale projects of 200-300 MW capacity. With SECI IV, V and NTPC bids coming up, another 6 GW is expected to be auctioned. Volumes are set to grow and we will see around 10-12 GW being auctioned each year.
Do you see a healthy order pipeline in the wind energy sector after a lull?
Volumes are set to grow and we will see around 10-12 GW being auctioned each year. The wind industry is determined and focused on offering energy security and affordable energy for all and transition to a low-carbon economy.
How can the battery storage technology be made more viable in terms of installation cost?
Renewable energy has entered an exciting new phase and its growth is unstoppable. Once considered a niche industry dependent on government subsidies, today it is driven largely by economic realities, improved reliability and cost competitiveness backed by proven technology. Another advantage of renewables is that it is modular in nature and is scalable. We are confident that the evolving technology and economic viability of energy storage solutions will give further impetus to renewables.
How do you see technologies like big data and artificial intelligence playing a role in wind power?
Technology and innovation will remain the catalysts that drive growth in the sector. Digitalisation of services, innovation in tower and blade technologies aimed at making unviable wind sites viable, provisions for better yield and increased turbine utilisation will be the key focus areas. Digitalisation will enable maximising turbine efficiency and availability by leveraging the big data technologies. Big data represents information assets characterised by high volume, velocity and variety. This will not only increase energy production at lower lifecycle cost, but also ensure greater transparency of performance parameters at all levels. It is a win-win situation for customers and wind farm operators due to enhanced revenue and reduced operations and maintenance cost.
Why are wind plants located largely in the southern parts of India?
The availability of rich wind energy resources, a gap between power demand and supply and robust State government policies have led to wind farms being located in the southern states of the country.
What are the States you are looking at?
We have a presence in all the eight windy States of India and also opened up the wind market in Telengana. With the advent of competitive bidding, the market will expand in other states too. Apart from this, Suzlon is also exploring the possibility of offshore wind farms and have installed our first offshore MET station in the Arabian sea, off the coast of Gujarat.
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