More private wind developers will evince interest in taking up projects under the repowering scheme, which will lead to overall growth of the sector, says Mahesh Palashikar, CEO, GE Renewables, India.
The concept of repowering projects is still new and the potential of such projects has so far remained untapped in the country. Do you think if a company undertook such projects as part of its strategy, it would be able to grab a major share of this market?
Needless to say, repowering is a proven concept. Countries like Germany and Denmark have extensively repowered their old installed wind farms to bring the fleet to contemporary technology standards. We see a need for implementing repowering at a wider scale in our country. Repowering has lot of merits, it can be undertaken on the existing wind farm boundary, it does away with the hassle of land acquisition, and uses large amount of existing infrastructure. With given resources and replacing old wind turbines with advanced and contemporary wind turbines, we can generate more power, capacity wise and close to triple the electricity generation from these sites.
India has immense repowering potential with existing wind capacity 4 GW coming from installations 10 years or older, and turbines with less than 500kW ratings, which are installed on rich wind sites. Some States in India such as Tamil Nadu, Gujarat, Maharashtra, Karnataka etc., have the potential. Strong policy support and incentives from Central & State governments will see faster repowering of these farms. More private wind developers will evince interest in taking up projects under repowering scheme, which will lead to overall growth of the sector.
How do you see the Indian market potential for the wind energy sector? The government aims to add 10,000 MW per year to lift the wind energy sector. How realistic is this particular target?
The current target of 10,000 MW seems to be an ambitious target. And we are glad that the current government has given much impetus to the wind sector, which gives Independent Power Producers (IPPs) the much-needed boost and confidence. The situation as we see it is the sector was bleeding, and was not performing well over the past couple of years with less than 2GW added in each of the last two calendar years. Though immediate results may be a thing we would see in a few months´ time, these are welcome steps towards achieving the target. Policy implementation and framework like RE Roadmap will provide the necessary fillip to the industry.
We see examples outside India, like China producing up to 18 GW of wind energy and Germany, meeting its 75 per cent electricity demand from wind power; India with good wind energy potential should be able to fuel maximum of its energy needs through this clean power. GE´s viewpoint is the target looks achievable and not impossible, provided we have favorable policies and their implementation to back the industry.
What kind of infrastructure backup will help to achieve this target?
The ´Green Corridor´ is a significant initiative. However, inadequate transmission infrastructure planning at State level continues to be a challenge as State Transmission System Plans do not take into account RE capacity buildup. Therefore, private sector participation by way of new business models in transmission infrastructure development is as important as a dedicated institution within State governments to facilitate RE transmission planning.
The Grid Code has recognised RE projects to have ´Must Run´ status. However, in practice it is not strictly followed. As we are all aware, around 40 per cent of wind generation was backed down in Tamil Nadu. Therefore, it is critical that the ´Must Run´ status is enforced.
Similarly, while we have an Open Access Policy, its implementation is flawed and has also limited the growth of the wind sector. For example, at the intra-State level, charges and conditions for open access in place have deterred the growth of wind. A point that gains significance at this juncture is the need for a Model Open Access regulation to be followed for all wind transactions.
You were right that 10,000 MW is an ambitious target. However, there is a difference between a realistic target and an ambitious target. In such cases, are Indian wind turbine makers capable enough to meet the proposed higher targets of the government?
Indeed they are. As on today, the wind turbine manufacturer capacity stands at 9,000 MW. It means, the current capacity at this point can suffice any requirement from the IPP developers. India, as on today has a blend of international as well as domestic players. So the existence of both-ability and capacity-will make sure that the future requirement from IPP developers is not hampered and the target is achieved. But there is a slight constraint in terms of advanced technology. Every manufacturer may not have a technologically competitive product suited for Indian wind conditions; but if you talk of capacity alone, it does exist. And even if the manufacturers fall short of (the target), then the government´s agenda to encourage manufacturing activity will certainly boost the sector.
Wind energy, which had been overshadowed by solar projects in recent years, got a big boost as the government has restored key tax incentives. Your comments. The target of the new government to provide 24/7 uninterrupted power supply to all homes augurs well for the growth of the energy sector in India. Three critical elements that would contribute to a big boost for wind policy include (a) long term policy certainty (b) uniformity in implementation of policies across States (e.g. feed-in-tariffs across States) and (c) enforcement (e.g RPO compliance).
What are your views on the Renewable Energy Certificate (REC) mechanism?
The challenge with the REC mechanism is arising due to the lack of RPO enforcement. Efforts for RPO compliance monitoring and reporting framework are inadequate. Many SERCs have allowed carry-forward of RPO compliance rather than enforcement. It is imperative that the Renewable Purchase Obligation initiative boosts the confidence of investors by ensuring binding RPO compliance through an amendment to the Indian Electricity Act. In addition, we hope that CERC would bring out a Model Guidelines & Framework for RPO compliance monitoring/reporting.
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