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Interaction | October 2013

India is Still Struggling as Compared to Western Countries

India is still struggling with random changes in policy, delays in approvals and challenges like poor grid connectivity. Ramesh Kymal, Chairman and Managing Director, Gamesa Wind Turbines, in an interaction with Pradeep Pandey says wind energy has ample scope in the country, however, to realise the expectations, RPO regulations need to be made obligatory.

The last couple of years has been quite challenging for the wind energy sector. How do you see the prospects this year and in the coming years?
The wind energy sector is beginning to rise again with the re-introduction of generation-based incentive (GBI). We are also witnessing the execution of plans by independent power producers (IPPs) who raised funding last year from some of the leading global PEs. Some issues still persists, such as poor grid and approval challenges. However, this year will be much better than the last year.

What are the challenges facing the wind energy sector in India?
The major challenge is around delays in getting approvals, policy uncertainty and poor grid connectivity. These have been an issue for long and have only become worse in the past few years. Issues are diverse and vary from state to state, but the point is that the government needs to ensure that the policy and framework, which is defined, is followed and that investors feel that their investment is secure. The state and the central government need to jointly work on strengthening the grid across India with a special eye for area where there is likely to be concentration of renewable energy.

Do you think solar is taking an edge over wind?
In times when the country is reeling under power crisis, coal and gas prices are rising and yet there is a shortage. It is important that we tap all sources of indigenous energy. I believe solar and wind can co-exist and there is no need to undermine one or the other. Wind is mature and has already achieved grid parity with new conventional power, while solar has some time before it will be competitive.

A lot of industry experts are talking about consolidation in the sector. What is your take on this?
Currently, India has about 4-5 leading OEMs while others are fringe players. There are a reasonable number of suppliers and this provides a healthy competitive environment. However, the current economic climate may force some global and Indian players to scout for strategic investors or partners. Globally, especially in China, the number of players is too large to sustain, hence we might expect some consolidation.

What are Gamesa's plans for growth?
Gamesa is mainly focusing on three aspects:

  • To reduce cost of energy by introducing efficient yet economical turbines. The current G97-2.0 with an efficient blade design and the soon-to-be-launched G114-2.0MW are a testimony to our focus on reduced CoE.
  • To build a strong MW pipeline across key Indian states. Access to good wind sites is essential and we will continue to leverage the global expertise in project development and the experience of the Indian team on the local market to offer best-in-class wind power projects to our customers.
  • Quality after-sales service and innovative solutions: We are focusing on ensuring that base operational assumptions of a wind farm are met and exceeded. We maintain a fleet of over 15,000 MW of 2.0 MW turbines with an availability of over 98 per cent, which is one of the best in the industry. We are also working on life-extension programmes for some of our turbines so that they can safely operate beyond their 20 years design life. In fact, the European Union (EU) has recently formed a task force for turbine life extension, which is headed by a senior services representative from Gamesa.

How do you compare the Indian market with western?
The fundamental driver in India is different from the US or Europe. While the West is looking to shift to greener sources of power, in India, the sheer need for power drives the demand. We need all forms of power and wind. Being indigenous and cost competitive is the apt choice. However, while the electricity market and the power policy regime is well developed in western countries, India is still struggling with numerous policies, random changes in policy, delays in approvals and numerous other challenges.

According to you, what kind of policy reforms is required to ensure planned capacity addition by 2017?
We need an immediate plan to develop a renewable energy corridor across states and strengthen existing state and national grid to handle the inflow. We also need to implement the current renewable purchase obligation (RPO) regulation in each state with no carry-forward or waiver to utilities on non-compliance. All states, irrespective of renewable energy potential need to meet RPO norms. And finally we need to remove all indirect benefits being provided to conventional power. This will force them to complete with wind power.

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