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Renew | February 2017

The Long Shot

Wind power has been in India since the 1990s, and if used to its full potential can take the country´s growth to unchartered shores.

Wind energy has been identified as a potential response to India´s crucial power challenges since the 1990s. The sector has undergone a major shift in India, and even after a good 25 years, we still await the full potential of this renewable source to be realised. From being an investment that provides tax credits to mainstream Independent Power Producers (IPPs), the sector still leaves much more avenues to be explored.

Moreover, with ~28.5 GW of projects already installed, India attained fourth position in global wind power installed capacity. FY16 was a historic year for the Indian renewable industry as wind energy surpassed all its previous records with ~3,300 MW installation. The previous highest installation was ~3,196 MW in 2011.

India´s wind energy sector has witnessed unprecedented acceleration last year, propelled by technology and conducive policy environment for renewables, by the central and state governments. The government target of 60 GW wind energy by 2022, is closer to becoming a reality propelled by technology and a conducive policy environment.

As a result, we witnessed annual installations of 3,415 MW in FY15-16 - higher than ever before, and 48 per cent higher than the previous year. The industry is expected to grow at a rate of 30 per cent annually, and may even surpass this on the back of the positive policies.

Wind farms are being set up with the latest technology, large-scale MW-class wind turbines, inclusive operation and maintenance practices for sustainable plant life, and logistics tools for construction, while maintaining seamless grid integration.

Make in India
The new draft of the renewable energy law that was tendered last year puts forward institutional support that´s required to achieve renewable energy goals. A plan is also in place to build supporting eco-systems that include resource assessment, testing facilities and monitoring and verification programs. Policies are also in place to boost local manufacturing.

The union budget of 2015 saw the government quadrupling the target of renewable energy to 175 GW by 2022-split between 100 GW solar, 60 GW wind, 10 GW biomass and 5 GW small-hydro power. ´With renewable energy becoming a major focus of the government, policy makers, along with field experts, are increasingly waking up and taking stock of the true potential of wind power, states Vikram Kailas, MD and CEO, Mytrah Energy.

The renewable industry can play two pivotal roles in facilitating the success of the ´Make in India´ mission, believes Tulsi Tanti, CMD, Suzlon Group, ´Firstly, India can be transformed into a manufacturing hub for renewable energy technologies. Secondly, renewable energy is a key to the competitiveness of Indian manufacturing and exports.´

In the first case, while the country is still heavily reliant on imports, especially for solar PV cells and other components, by securing the supply chain for wind, solar and other renewable technologies in India, we can not only reduce the cost of these technologies, but also create value additions and employment in the country. In the second case, take any major industry in India, and you see that power constitutes a critical input and cost. Owing to rapidly declining cost of energy from renewables, energy sources such as wind are less expensive than the prevailing commercial or industrial tariff.

´In fact, many corporate houses, public sector units and small and medium enterprises, such as those in textiles, have already tapped the benefits of wind power to hedge their energy costs,´ states Tanti. Therefore, to develop a strong manufacturing and export base with global competitiveness, we need a large scale renewable energy foundation in India.

Technology Evolution
Technology and innovation will continue to be the catalyst for the wind industry growth. ´The renewable energy space is abuzz with the arrival of state-of-the-art technology,´ feels Kailas.

Hub heights are progressively increasing; what used to be a standard height of 80 metres in the past has now increased to 100 metres-plus, which makes it possible for renewable energy companies to tap into a larger number of locations that were earlier considered unviable for wind.

Over the last few years, blades have got progressively longer - from around 97 metres to around 116 metres (and a projected 150 metres over the coming years) - increasing the sweep area and enhancing the electricity produced from each wind turbine.

Carbon is progressively replacing fibreglass as the material of choice for making blades, allowing rotation even at low wind speeds of two to three metres per second, which again opens up a large number of prospective geographies for setting up windmills.

Wind farms are getting progressively digitised. Scores of algorithms are being written that make it possible for blade direction to proactively change in line with changing wind directions and speeds, thereby boosting operating efficiencies.

´The result is that increased plant load factors (PLF) through technological improvements could transform the face of the sector. Globally the wind industry has accelerated big data usage and India too is moving swiftly in the same direction for efficient, cost effective and smarter solution offering,´ points out Kailas.

Aspects like aerodynamics is still the key to maximising output from wind turbines and there is continuous advancement in this space as well as in materials technology. While improvements in CFD analysis and the resulting optimisation of rotor configuration and pitch control directly translate to overall increase in turbine and wind park production. Wind farm management will also develop further to enhance control of the complete park.

There is a huge opportunity in wind and solar hybrid solutions given the complementary cycles of generation and the better utilisation of the grid. ´It has multiple benefits to offer as one does not have to duplicate costs such as land and evacuation infrastructure. At the same time we feed double the capacity in the grid infrastructure improving stability in the grid system,´ observes Tanti.

But, we first need to develop the infrastructure base for hybrid solutions given the complementary cycles of generation and for better utilisation of the installed infrastructure. Also, a dedicated policy for hybrid is still awaited and will take at least one-two years to translate into a commercial scale opportunity.

Wind v/s Solar
Tanti feels that wind and solar energy do not compete and rather complement each other, because solar in India is in addition to wind and not a substitute. ´Both technologies are required to ensure the energy security of the country and to bring down the levelised cost of energy (LCoE). Due to complementary generation profile of wind and solar, a combination of both the technologies is required, even from grid infrastructure investment point of view,´ he states.

Besides, wind is already at grid-parity and with over 28 GW installations, it is a proven and mature technology. The government too has set individual targets for wind and solar. Moreover, wind employs over two million individuals in the manufacturing and projects side of the business. Also, there is a huge opportunity in wind-solar hybrid solutions given the complementary cycles of generation and better utilisation of the installed infrastructure.

Beyond the domestic, India has exported wind products and technologies to over 30 countries in the world, so the sector itself is truly ´Make in India´ not only for domestic market but also for the export market. ´You must appreciate that no other Asian country has achieved this feat in wind and the products are predominantly sold in the developed markets, like the US and Europe,´ he adds.

The industry has attracted an investment of over $3.16 billion and the cumulative installations of the sector is about 64 per cent of India´s total grid interactive renewable energy capacity. The 50 per cent growth in installation vis-a-vis the previous year (~2311 MW in FY15) demonstrates the industry´s preparedness to achieve 60 GW wind by 2022, with ~28.5GW cumulative wind installations in India, the sector is almost half done with the target.

Tanti feels that wind is a more bankable option as the tariff of solar projects has gone down substantially low at below `5, making a lot banks are uncomfortable about financing those projects. There, sufficiency of cash flow to service the project is a question. In contrast, wind has a track record of 20 years and has less than 0.5 or 0.6 per cent of NPAs.

´In the last two years, the government´s policies are aimed to develop both solar vs wind. The concern on solar is increasing because of competitive bidding. Wind is believed to be tested and safe secured investment. I believe, the institutions finance projects after looking at whether the project can give sufficient cash flow or not,´ he points out.

Operations and Maintenance (O&M) as an industrial function comprises of a broad spectrum of activities required to assure that the set-up, equipment and parts of a factory/unit perform the functions for which the facility was constructed. Wind turbine O&M practices are facing diversified challenges with respect to operating costs, asset management, reliability and component failures and right know-how on maintenance strategies.

Commenting on the technologies that OEMs can adopt, Akhil Jha, Vice President Technical, Shell Lubricants India states, ´Lubricant technology plays a vital role in keeping wind turbines running reliably and efficiently. The OEMs and customers today are constantly striving to improve efficiency and operational reliability, and enhance competitiveness by avoiding loss of output and increased maintenance costs.´

Besides lubrication, one of the most important aspects of a wind turbine is the reliability of its ´critical´ components like gearbox, generator, blades etc., which need to be properly conserved and maintained to achieve an optimum level of performance and reduced need for costly maintenance. Especially in today´s scenario of high demand, component lead time represents more than 80 to 90 per cent of total downtime.

Today, new ´preventive´ maintenance practices are being developed, using high tech condition monitoring technologies, which aim to reduce the overall turbine O&M lifetime costs. Points out Jha, ´Wind OEMs are now focussing more on predictive maintenance techniques which have arisen to maintain, visually inspect, measure, and analyse the condition of the turbines and perform required repairs through technology called Condition Monitoring (CMS).´

Meanwhile, commenting on the O&M for on-shore and off-shore wind projects, Tanti adds, ´It is different, but also similar as the principle is the same. But, having said that, on offshore, the costs of installation are higher and the capacity of the products are higher rated to harness better quality ocean winds.´

The evacuation process is different as in most cases, the sub-stations are better installed onshore. And the vagaries of nature needs to be taken into account. The corrosion factor, unpredictability of ocean currents and available of talent in the country in a new developing area of the renewable business are some of the challenges that needs to be considered.

He feels that since access to off-shore turbines is difficult and it is expensive to move service staff and material; product development, maintenance and ensuring productive lifetime for wind turbine generators (WTGs) are factors that need to be planned well in advance.

According to Kailas, land has been the major bottleneck for faster implementation of large scale projects in India which can be dealt with the concept of wind farms. Also, dependence on import of advanced WTGs entails foreign exchange risks, import taxes and duties which can be addressed by incentivising setting up of manufacturing units in India, which has already set ambitious target for large scale renewable generations. Credit rating of off-takers being distribution companies are not promising and may be enhanced by the government/banks with additional guarantees and/or credit enhancement mechanisms. Delays in payment and dishonouring of PPAs continue to be a risk for the investors, which may be addressed by centralising the functions procurement with adequate payment security to reduce this concern.

Readiness of evacuation infrastructure i.e. green corridor to cater the overall renewable capacity addition which could avoid congestion and back down.

Way Forward
With ~28.5 GW, India attained fourth position in global wind power installed capacity, India now has ~31.5 GW to achieve by 2022 i.e. ~5,000 MW annually. ´I am confident the wind sector can deliver the 60 GW target,´ states Tanti.

He suggests some policy recommendations that the government can consider to smooth the way for wind power in India and continue the momentum in renewable energy:
Long-term policy predictability: Accelerated Depreciation (AD) and Generation Based Incentive (GBI) should continue till 2022;
Banks and financial institutions should earmark at least 20 per cent finance for renewable energy projects and provide finance for longer period of 20-25 years;
SMEs should be supported by five per cent interest rebate for using renewable energy for captive requirement;
Improve availability of grid and land infrastructure at state level;
GST for RE projects at zero rate, since electricity is not subsumed under the proposed GST framework;
Provide manufacturing with support to facilitate innovative financing, increase capabilities, facilitate job creation and meet the ´Make in India´ initiative. Wind manufacturing capacities are created in India, while solar is imported from China.
Incentives for local manufacturing and job creation in the sector should be considered;
Implement the EXIM practices of China and USA that gives a line of credit of $1 billion and $2 billion respectively, in case of exports by local companies.
In India, EXIM offering is limited to $200 million per year. RBI should remove the 10 per cent limit imposed to one company or infuse $5 billion fresh equity to EXIM.


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