Mission 2500 MW of Wind Energy in 2012-13 ???
Is this really a setback for wind energy capacity addition in 2012-13 or India likely to gain momentum in second half?
Don’t you think that due to economic slowdown, Infrastructure affected a lot? Power sector in infrastructure is a real setback because we already starved of energy and slow pace in investment create a huge gap between demand and supply. There is a gap between what we have planned and what we are achieving, and this gap should be filled in next few years otherwise it would impact power sector harshly and in the end consumer will suffer. Since we have achieved about 54,000 MW in 11th year plan and in last year of plan itself, it is about 20,000 MW. Besides all slowdown, Indian power sector attracts a huge investment and in green energy it also increases significantly. As per Bloomberg more than 10.2 billion US dollar investment has been made in renewable energy sector in India alone in FY 2011-12. Out of this huge lump sum, 4.2 billion US dollar was invested in Solar, but wind power also attracted a significant amount worth Rs 19,200 Crore leading to generation of 3200 MW. It is far better than what we have planned.
Something is missing
What we have achieved doesn’t matter if we are talking about current scenario which creates a dubious situation. Fall in installed capacity in first 5 months of this FY shows the impact of economic slowdown along with many factors. Due to economic slowdown, investment attracted by Wind Power might be less but is it the only reason? My answer is no, economic slowdown is not the only reason behind this scene because last year we saw a huge investment in this sector. As per Sep 7 news, The industry is expected to lose investment worth Rs 12,000 crore in 2012 due to revoking the incentives, said K Kastoorirangian, chairman of the IWPA. So we can say that economic slowdown is not a single factor, therefore I would like to discuss few factors which degraded the capacity addition and restricted it to 614.50 MW in first five months of FY 12-13.
• Incentives are not provided to wind developer in the form of Accelerated Depreciation and Generation Based Incentive after FY 2011-12.
• Banking Provision was removed in “Tamilnadu Wind Policy 2012”, so it’s a real setback for developer, especially for captive and third party developer.
• Increase in the cost of machinery and civil work but very few states revised their “Levelized tariff” on that basis.
• Except Maharashtra and Rajasthan (Partly), no other state follow CERC guidelines while determining “Levelized Tariff” on the basis of different “Wind Zone Basis”.
• Most of the high potential sites are already reserved, thereby leaving behind wind sites having low Wind Power Density and we are lacking the state of art technology for such low wind sites.
• Very difficult to provide grid connectivity to all sites due to geographic constraints.
By this we can say that we miss our momentum, we lose it in shine of last Financial Year growth.
Has Really Wind Energy Attained the Maturity??
As per last few years trend, market analyst says Wind Energy has attained the maturity. But has it really happened? In my opinion Indian Wind Energy still needs a supporting hand and without this it might fall down steeply. We are lacking in technology to use the sites of low wind potential. Few states are still not able to provide conducive policy and attractive tariff so that developers can compete in harsh environment. Evacuation infrastructure also causes problem for developer, sometimes capacity becomes stranded due to unavailability of grid.
But all points are not against the Wind Energy. Landed cost is equal to the generation cost of imported coal based plant. It is a clean source of energy and India is having a huge potential as per recent analysis.
• To boost the confidence in developer which is lacking due to removal of incentives (like AD & GBI), MNRE proposes to re-introduce GBI which is about Rs 0.80/KWH for more than 5 years.
• Green energy corridor, an initiative to provide grid infrastructure facility to renewable energy.
• National Clean Energy Fund to fund clean energy projects.
Remedies to ramp up the rate of capacity addition:
There are still seven months left in this FY. In next seven months, we would like to see the high capacity addition, but is it possible to achieve target of 2500MW? We have achieved about 1800 MW in second half of FY 2011-12, so we have a ray of hope to achieve this year target and maintain the momentum of achieving 5000 MW in subsequent years. Government along with state government should find the solutions to boost up the investment and also provide level playing field to manufacturers as well.
• To fast track the project, government should provide rapid clearances.
• State government should provide land at low rates like in Rajasthan and Karnataka.
• Evacuation Infrastructure should be the state government’s responsibility.
• Non-compliance of RPO should be punishable.
• REC future should be clear in developers mind.
• Levelized Tariff should be compatible to Capital Cost incurred by developer.
• Tariff should be decided on the basis of “Wind Power Density” as per CERC guidelines.
• Should invest more on technology to harness low wind potential sites.
Wind energy potential assessment on the basis of different criteria is different and if we follow C-Wet assessment over it, we are able to harness only 17.5% of total potential till now. We still left with a huge capacity and this scenario doesn’t include the off shore wind potential. So we must ensure a huge investment in Wind power in next few years by making policy more conducive and incentives should be given in such a way that investor’s confidence remain in system for a long time.