Wind Energy: India’s Market prospects

Introduction  

Wind energy uses kinetic energy of the wind to convert its into mechanical enegy to produce a clean form of energy without producing contamination or emissions. This energy can be used for specific tasks to power homes, businesses, schools, and the like, it supplies around only 0.1% of total global electricity.

Wind energy is being used for village electrification, water pumping, battery charging, small industrial uses, etc. In India, however, the use of wind as an energy source is at a preliminary stage for decentralised energy generation. India has nearly 600,000 villages and has a large potential for decentralised energy (DE) systems while India’s commercial energy consumption has been growing fast.

India depends heavily on coal and oil for meeting its energy demand which produces a toxic miasma that contributes to smog and acid rain and greenhouse gases emission. Other source of energy is natural gas which is made up mainly of chemical called methane, a simple compound that has a carbon atom surrounded by four hydrogen atoms. Methane is highly flammable and burns almost completely. There is no ash and very little air pollution. The use of electricity has grown since it can be used in variety of applications as well as it can be easily transmitted. Though major energy sources for electrical power are coal and natural gas, use of renewable energy like wind and solar is rising.

Wind energy is a clean, eco-friendly, renewable resource, non-polluting to generate electricity. Unlike conventional power plants, wind plants emit no air pollutants or greenhouse gases. Only concern is noise produced by the rotor blades, aesthetic impacts, and sometimes birds have been killed by flying into the rotors. Most of these problems have been resolved or greatly reduced through technological development. National Aeronautical Laboratory (NAL) was among first which developed a 4.9 m diameter conventional multi-vane wind mill in mid 1960s thereafter Sail-type windmills under a project initiated by NAL during 1976-1977. In 1991, ‘private power policy’ commenced in wind power generation which  ultimately led to successful commercial development of wind power technology and substantial additions to power generation capacity in the country.

 In 1983 India initiated a national wind power programme with three components: wind resource assessment, demonstration projects and industry-utility partnership. The Indian wind Industry was placed fourth in terms of total installed capacity in the world by the year 1993 but 1996 was worst year for India wind energy market due to Minimum Alternate Tax (MAT) policy, changes in government policies, which resulted declination. To overcome the problem of falling profitability of private wind farm operations in the country some states started supporting the wind power companies and investors with liberal policy initiatives. The wind energy situation started to improve in 1999 and the upswing is still continuing. Technological maturity and introduction of suitable machines for the Indian conditions resulted in overall higher capacity utilization.

 Challenges

The major challenge to using wind as a source of power is that it is intermittent and it does not always blow when electricity is needed. Wind cannot be stored and not all winds can be harnessed to meet the timing of electricity demands.

Market Prospects

Wind power has an expansive future according to experts. Wind energy has been the fastest growing source of electricity generation in the world in the 1990s. However, the majority of this growth has been in Europe, where government policies and high conventional energy costs favor the use of wind energy.

The future look very promising for wind energy market and it is going to see nearly double-digit growth in next 10 years. The future wind turbine will have bigger blades (50m to 65m) and average turbine capacity will be 1.5 MW to 2 MW.

India has been an electricity deficit country despite huge expenditures in the power industry, which provides ample room to wind developers for bridge the demand and supply gap. There are some considerations like good wind conditions, rapid economic growth and growing demand for energy which leads to immense wind energy market potential.

India’s growth in wind energy is due to several incentives announced by the Indian govt. to promote this form of non-conventional energy in the country. The government has introduced a package of incentives which includes tax concessions such as 80% accelerated depreciation, tax holidays for power generation projects, soft loans, customs and excise duty reliefs, liberalised foreign investment procedures, etc. and the industry expects similar support in future too. Indian Wind Energy Association (InWEA) sometimes ago had made a formal submission to the Finance Ministry, requesting introduction of a performance-based incentive system the indirect fiscal benefits provided as tax foregone be linked to performance. It proposed the introduction of tax credit certificates (TCCs), moving away from the current system of accelerated depreciation. The new system is expected to accelerate growth of the wind energy sector in India.

Government of India established Centre for Wind Energy Technology (C-WET), an autonomous R&D institution under the Ministry of New and Renewable Energy (MNRE), to serve as a technical focal point for wind power development in India. In fact it is an only research institute in Asia perhaps in countries in South to promote and accelerate the pace of utilization of wind energy and help hand the growing wind power sector.

Presently India is the fifth largest wind energy producer in the world with a total installed capacity of about 10,900 MW accounted 9 % of the global wind energy market, after United States, Germany, Spain and China. The 6,000 MW of wind power capacity is expected to be installed in two years.

Wind energy witnesses tremendous growth in India and is the fastest growing in the composites industry after FRP pipes & tanks market which is attributed to India’s growing energy need and initiatives by the government to meet a part of this demand through renewable energy sources. National and local legislation was framed to promote private investments in renewable energy and to be estimated that wind energy potential of the country would be at 45,000 MW. Integrated Energy Policy has projected capacity addition of 30,000 MW from wind by the year 2032.

The wind energy market had golden era in 2005 and 2006 wherein market was rocketing at 50 % annual growth rate thereafter market grown by 25 %. In 2009 average growth rate was 14 % and market is grown by 30 % compounded average growth rate (CAGR) since 2004. Most probably this was due to government policy and initiative, awareness, technology advancement, high GDP, economic growth and macroeconomics.

In global context, USA taking over number one position from Germany and China getting ahead of India for the first time, taking the lead in Asia. Approx 40 % market is captured by both USA and China and still only five markets represented 80 % of the global wind energy market. Denmark is still a leading wind energy country worldwide.