On 01 December 2020, MEC Intelligence (also known as MEC+) participated in a roundtable session on India at the digital Wind Energy Hamburg conference 2020. The session was on the upcoming developments in the Indian market and hosted by Global Wind Energy Council (GWEC).
Topics were two-fold:
1. The Status and outlook of wind power in India (both onshore and offshore) and what still needs to be done
2. The plan to develop India’s local and global manufacturing capacity and how this can drive India’s economic recovery from the COVID-19 crisis
• Balram Mehta, President – Wind and Asset Management, Renew Power
• Amar Variawa, Director of Public Affairs India and SE Asia, Vestas
• Deepak Krishnan, Associate Director-Energy, WRI India
• Sidharth Jain, CEO and Founder, MEC+
Moderated by Francis Jayasurya, India Director, GWEC
This note has two parts: 1) The key conclusions 2) Question wise summary
• COVID-19 did not impact the existing portfolio of operational projects. The government gave full support to industry to keep projects running and to provide access to farms under lockdown jurisdictions for O&M. Manufacturing was allowed to run after a few weeks and there was considerable coordination with the government at all levels.
• India’s growth in installed base for wind has declined from projections in the last three years, while solar-based installations have grown. The Indian government has issued around 16 GW of tenders over the last three years out of which 9 GW projects are still under construction. The root cause has been the delays in signing the agreements for land and power supply with utilities. The delay in signing of the power supply agreement is surprising as even though the budget existed, the underlying non-RPO were not met.
• Standalone wind auctions have also seen a drop. In the last three years, auctions have dropped to 2 GW in 2020. The government has set a strong wind target till 2022 and 2030, and it should start to extend the non-solar RPO to meet its targets.
• The role of wind is clear to the top ministers in the government. Policies such as wind parks and tariff regulations are already being considered to provide immediate relief.
• Hybrid tenders have come up. Asset developers must focus on high-speed wind resource site acquisition and modelling capabilities to participate in wind bids which are in a combination of other sources
• Right now, sentiment may be negative, but wind plays an important role in the energy mix. Wind presents an opportunity for competing against coal and battery for complementing solar energy today. For this to happen and to grow, the market OEMs should consider building commercial capabilities to help IPP (Independent Power Producer) deploy large scale wind into stable grid renewables and partner with local players to tie up attractive sites.
• Offshore wind is likely to get delayed and near-shore options might get priority in Gujarat and Tamil Nadu.
• India is an attractive manufacturing hub for OEMs who are looking to de-risk their manufacturing from tariffs on exports from China. Already, all top OEMs are present in India with their domestic set up, which is being re-oriented for exports. The large global OEMs continue to service the global market from both China and India. However, smaller OEMs and regional players are expected to make India as their global hub.
• The challenge in exporting turbines lies in the nature of domestic demand and its link to the global demand. India will primarily be a 3 MW turbine market, which will be relevant only in the US and LATAM outside India while other markets move to 4 MW.
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MEC Intelligence, also known as MEC+, a consulting firm focused on the wind and renewables sector for 10 years and is based out of India and Denmark. MEC+ offers insights and strategy support to CXOs, clients include one of the largest global wind OEMs, European utilities, Global Supply chain players, Equity funds, and Independent Service Providers. For more interesting reads, visit Expertise and Insights.