While these challenges seem common to both wind and solar photovoltaic, there are two reasons why the wind sector needs some urgent attention. One, even though there are seven wind-rich states, only two of them have sites with mean wind speeds high enough to provide the expected low tariffs (<Rs 2.85/kWh), causing stress on existing land and evacuation facilities. Two, unlike solar PV, the wind sector has a globally competitive domestic supply chain in India. Low annual capacity additions are gravely impacting small domestic turbine and parts manufacturers, while bigger (mostly international) players can survive the turbulence.
How do we solve these issues? Policymakers must choose between two approaches: To distribute the capacity or distribute the energy generated.
Distributing capacity means tapping into wind resources available in medium-to-low wind power density (WPD) regions. While Tamil Nadu and Gujarat have the highest wind speeds and account for 39 per cent of the total wind potential in India, (according to the National Institute of Wind Energy), there is an aggregate potential of 184 GW in other medium-to-low WPD regions. Commissioning wind farms in these states could reduce stress on land and evacuation facilities, potentially reduce the investment required for inter-state transmission infrastructure, and reduce the overall cost of integrating wind power into the grid.
Tamil Nadu and Gujarat have the highest wind speeds and account for 39 per cent of the total wind potential in India
However, lower wind speeds would mean higher levelised cost of electricity. CEEW analysis indicates a 6 to 36 per cent increase from current ceiling tariffs but comparable with the national average power purchase cost for conventional generation. In order to optimise energy production from low-WPD sites, there is need for policy support to give incentives to develop advanced turbine technologies, which could tap low wind speeds.
For the second approach — distributing the energy generated — to work, effective mechanisms are necessary to transfer power from point of generation to the nearest transmission network and to the periphery of offtakers’ networks. The Renewable Purchase Obligation (RPO) mechanism is meant to facilitate the inter-state transfer of power. But compliance of distribution companies with RPOs is staggeringly low. Stricter compliance would go a long way to facilitate inter-state power exchange. Strengthening existing market mechanisms, such as power trading and open access, with regulatory and technological means would be another option. Agile power procurement planning by distribution companies, effective open access regulation across states, and developing advanced electricity market are among the measures that could move the needle.
Additionally, inter-state and intra-state transmission networks need rapid expansion to keep pace with renewable energy deployment to pre-empt a real technical constraint in power transmission across the country. Large injections of variable renewable energy within a regional network would also need additional investments in grid balancing technologies.
Regardless of the approach chosen, India has to rethink the way reverse auctions are conducted. In their current form, reverse auctions will not encourage exploration of low-WPD sites. Nor would they ensure smooth commissioning of plants in high-WPD areas. Site-specific auctions with a ceiling tariff estimated for the chosen geography could support optimum wind farm designs — and more realistic tariffs. The procedure for Long-Term Open Access of the transmission network and substation connectivity also needs to be streamlined with the auction process. This would ensure that the timelines for plant commissioning and network expansion are in sync. This reformed approach would facilitate more capacity being commissioned annually, giving the industry a more stable growth path.
India may or may not meet the wind energy target of 60 GW by 2022. But obsession with targets and lowest tariffs, alone, is a bit like tilting at the windmills. Saving wind energy from the doldrums would need accurate assessment of the costs (of generation and transmission), streamlining the auction process (to give incentives for innovation), and far better enforcement of regulations.