Tulsi Tanti, Chairman and Managing Director, Suzlon Energy said that in India, investors are bullish and excited to be part of the renewable growth story. Digitalisation of services, innovation in tower and blade technologies aimed towards making unviable wind sites viable, ensuring better yield and increasing turbine utilisation will be the key focus areas. The industry will collaborate further to improve the supply chain, enable grid integration and leverage digital technologies.
"While the wind industry's transition to the bidding regime created short-term challenges in 2017, it has laid the foundation for sustainable and inclusive sector growth. The wind industry is poised to grow to about 8-10 Gw annually, with 5-6 Gw annual bidding at the Central Government level, 3-4 Gw capacity auctions from the nine windy states and one Gw capacity expected from the PSU and captive markets. This will pave the way to unlock 300 Gw wind energy potential in India and harness the latent potential of non-windy states," he said.
Another rating agency Icra has also said that the wind capacity bidding programme announced by Ministry of New and Renewable Energy (MNRE), Government of India is quite significant and provides a visibility to support capacity additions over next four year period, provided the same is implemented in a timely manner.
However, the industry has said that there are a few hurdles including uncertainties in solar panel costs, unpredictable behaviour of distribution companies (discoms) and operational troubles from wind turbine manufacturers need to be addressed by renewable developers.
The rating agency says that avoidance of downtime of solar and wind plants are critical in ensuring the predicted internal rates of return (IRR). Uncertainties in plant load factor are significantly higher in wind projects than in solar, owing to estimation errors during initial wind resource assessment, high dependence on single-turbine supplier for operations and maintenance, and high susceptibility to grid curtailment.
The tariff discovered in the reverse auction under the second MNRE (Ministry of New and Renewable Energy) scheme conducted by the Solar Energy Corporation of India (SECI) in October 2017 declined by 24 per cent to Rs 2.64 per unit as against Rs 3.46 per unit discovered in the first MNRE scheme. While this significantly improves the tariff competitiveness of wind energy over conventional energy sources, the viability of such tariffs remains a challenge. "This would depend up on the availability of long-tenure debt at cost competitive rates, capital cost, PLF level and ability of the developer to identity locations with high generation potential," said Girishkumar Kadam, sector head and vice president, Icra Ratings.
There are also concerns about distribution utilities in some states looking at renegotiating or canceling the signed purchase agreements following the significant decline in wind energy tariffs discovered through the competitive bidding route, though the Centre has advised the states against any such move.
Creating a favourable ecosystem and better ratings may have its importance in the Centre's move towards achieving the targeted 175 Gw clean energy by 2022, said experts.