Potential for wind power generation in India- Plugging Gaps

India is the fourth-largest in the world with respect to the number of installations, and the second-largest wind manufacturing hub. However, the installations have been declining in the last two years. As of 2019, the country has over 37 gigawatts of wind capacity. The steady growth of the market is attributed to the rising energy demand and the political ambition of the country. Over the next decade, electricity demand is expected to double to 1.35 billion people.

VIEWPOINT TOWARDS 2022:

The government of India has set a target of 175 gigawatts of renewable energy by 2022, which includes 60 gigawatts of wind energy. By 2030, the country is expected to have 450 gigawatts of wind-based generation. In addition, the country has attracted international investors and supply chain players due to its robust wind market. The rapid emergence and evolution of technology and capital has led to a reduction in the cost of wind energy. It has become one of the most cost-competitive energy sources on the grid. Wind's levelized cost of energy has dropped by about 40% from 2015 to 2019.

The total number of wind installations in 2019 was 2.3 gigawatts, which is half of the total of 4 gigawatts in 2017. Despite the various factors that have affected the wind market, the country's power purchasing agencies have been able to successfully auction over 17 gigawatts of wind capacity. However, a significant chunk of these projects were not able to get operational due to various factors. Over 80% of the projects that were awarded during the first six auctions were delayed by at least a couple of months. The government's decision to use the low prices that were captured in the auctions during the last two years as a benchmark for the upper price cap in the future auctions has also led to a loss of steam.

The government's decision to impose a tariff of 20 percent on the sale of wind energy was also not feasible due to the country's exhausted grid infrastructure and the changing land use criteria for awarding new wind sites. The seven states that manage the wind procurement process have also seen a significant decline in their orders. The low response rate in the auctions is attributed to the various factors that have affected the wind market, such as the poor financial position of the state distribution companies and the chronic payment delays caused by the projects installed before 2017. The wind market is expected to continue to be volatile in the next few years due to the various factors that have affected the industry. The time required for the development of new wind sites and the increasing cost of doing business are expected to delay the installations. This will also drive the prices of wind energy.

To ensure that the wind market is stable and competitive in the future, the government must maintain its realistic price expectations. It should also improve the auction infrastructure and lower the barriers that prevent the private sector from participating in the market.

IMPACT OF COVID-19

The implementation of COVID-19 is expected to have a negative impact on the wind market in 2020, as it will delay the development of new wind sites and increase the supply chain disruptions. Despite the various factors that have affected the market, the uncertainty surrounding the new tender process and the business environment are still expected to prolong the impact.

Due to the nationwide lockdown on March 24, 2020, all renewable energy projects that are currently under construction will be given an extension of their commissioning deadlines. The total active pipeline is around 8.6 gigawatts. About 2.8% of this was scheduled to have been commissioned in 2020, 5.2 gigawatts in 2021, and the remaining 0.4 gigawatts in 2022. This extension is expected to have more relevance for projects that are currently under construction in the fourth quarter of 2020. It is estimated that around 0.7 to 1.1 gigawatts of projects will be commissioned in 2020, which is significantly lower than the 3.3 to 2.6 gigawatts previously expected. However, most of these projects will still be on-track in 2021. Due to the lockdown, the government has notified about 3.2 gig of tender for various wind projects. However, no closure date has been set for these projects. The new tenders in 2020 are expected to reduce the total installed capacity by about 12 gigawatts to 11.5-12 gigawatts from the previous 13 gigawatts. This could also impact the availability of funds for new projects and the FIDs of existing ones. In addition, the weak balance sheets of some of the country's financial institutions could also increase the risks associated with new projects.

Although the operations and maintenance activities of wind power plants have remained suspended due to the nationwide lockdown, the manufacturing of components has been allowed to resume in order to safeguard the supply of electricity. The Ministry of National Renewable Energy (MNRE) has stated that the outbreak of coronavirus could affect the country's supply chain, but it is not clear if this will be enforced. Due to India's position as the largest producer of wind turbines in the Asia-Pacific region, the suspension of the country's original equipment manufacturer (OEM) activities could have negative effects on the global market. The government has also issued a relief package for the power sector by announcing a moratorium on payments by state-owned electricity distribution companies (DISCOMs). It also issued guidelines to allow renewable power producers to issue invoices to the discoms during the lockdown. This decision was taken after a number of state electricity distribution companies (DISCOMs) invoked force majeure to suspend their operations and stop paying their dues.

CONCLUSION:

Wind power has been around for centuries. It can be used to pump water, grind wood, and send ships to their destination. Today, it is a vital part of meeting the climate targets. So here is a right way to conclude that:

•  Wind beats coals: Wind power is cheaper than other forms of energy such as nuclear and coal plants. It costs around three times less to generate electricity on land than it does in other regions. According to estimates, the cost of wind power will drop to around 0.03 ($0.04) per kilowatt hour by 2030. in future, this will lead to the availability of 20 times more electricity thean before.
•  Offshore wind power is powered by the powerful and reliable wind turbines that can be found in various parts of the world. These facilities can produce up to 10,000 kilowatts. In 2025, they are expected to reach a capacity of 15,000 kilowatts. This will allow them to provide electricity to around 40,000 households.
•  China is currently the world's largest producer of wind turbines. In 2020, it added over 50 gigawatts of new capacity. This is equivalent to the output of over 50 nuclear power plants. Two of the most prominent countries in the expansion of wind power are Germany and Denmark. In Denmark, wind power has already covered about 50% of the electricity needs, while in Germany, it has reached 25%.
•  Around 1.3 million individuals work in the wind industry globally. Most of them are in China, India, Germany, and Brazil. Wind power is becoming more prevalent due to the lower cost of installing and operating turbines.
•  Until now, ships were mainly powered by diesel engines. However, with the advent of wind power, modern vessels can now run on wind energy, which can cut down on their energy consumption by up to 30%. In addition, they can now use green hydrogen as their fuel.
•  Floating wind farms: There is currently enough space in the sea to support wind power. However, in certain areas, such as the deep waters of Japan and Europe, it is not feasible to build foundations for wind turbines. Instead, they can be placed on the seabed using floating turbines.
•  wind power for homes: Wind power installations on the roofs of buildings are typically not economical due to the weak wind conditions in cities. On the other hand, photovoltaic systems on the roofs are more efficient.
•  Within a year or two, wind turbines can generate the energy they need to build. Although they don't release carbon dioxide into the atmosphere, they can still have a significant impact on the landscape. Despite their negative effects, wind power is still considered to be the best option for the environment.
• Combined with solar power plants, wind and solar power can meet the energy needs of the world. In regions with a lot of sunlight, such as those in the equator, photovoltaics are the cheapest energy source. However, in areas with strong wind conditions, wind power is the most effective energy source.

Pic Courtsey-Med J at unsplash.com

(The views expressed are those of the author and do not represent views of CESCUBE.)