Wind of Change

Solar power has emerged as the fastest growing segment within the renewable energy sector in India, overtaking the long-time favourite wind power. What it will take to regain wind power growth momentum? By Subhajit Roy, Group Editor

In the last 3 years, installed renewable energy capacity in India has more than doubled
from around 32 to 71 GW. Wind energy is leading the pack, contributing more than 50 per cent of this with cumulative installed capacity of over 34 GW. According to J P Chalasani, Group CEO, Suzlon, “Due to the shift to competitive bidding, wind energy has become the cheapest source of energy across all sources. Because of the tariffs coming down, the demand from market has picked up substantially and distribution companies are showing interest in buying wind energy since it’s a viable model for them.”

However, the last year had been challenging as the wind industry witnessed slowdown due
to the transition from FiT (Feed-In Tariff) to competitive bidding, which impacted margins and created temporary uncertainty in terms of volumes. “The overall wind industry installations plummeted to 1,766 MW in FY18 (32 per cent of FY17 installations) due to stagnant volumes, uncertainty on PPAs and policy environment,” opines Chalasani.

“One advantage which wind has over solar is lesser technological risks related to project life as many plants have already demonstrated complete project life cycle. Another area of opportunity for wind can come from offshore where PLFs can be 50 per cent more than onshore projects (although costs can also be higher) and more than 7,000-km long coastline obviates the need of land procurement, which is a limited resource,” Ankur Agarwal, Senior Analyst, Global Infrastructure Ratings, India Ratings and Research
(Ind-Ra) said while listing the advantages of wind power in India.

The industry is on a growth trajectory and there is a clear visibility of volumes. The sector last year saw bidding of 7,500 MW (6,000 MW from central and 1,500 MW from states like Gujarat, Tamil Nadu, and Maharashtra. Additional 10,000 MW of bidding is scheduled to take place by the end of FY19. Under the new bidding process the project size has significantly gone up to 250 MW – 500 MW. As a result, there is an increase in the economy of size and project cost is reduced, improvement in technology has led to viable tariffs, avers Chalasani.

India is attracting investments from large scale global utilities. Commissioning volumes will improve in FY19 compared to FY18. Volumes to exponentially grow to over 8,000 MW FY20 onwards. New bids awarded will be commissioned over FY20 and FY21.

However, Dr Sanjiv Kawishwar, Sr. Vice President, ReGen Powertech Pvt Ltd. says, “Implementation of competitive bidding for tariff determination in wind sector has devastated the growth and there is hardly any progress in project execution finalised through such mechanism.”

He acknowledges that solar power has emerged as the fastest growing segment with the favourable government policies for last few years.

Technical feasibility and reliability of wind power is ensured by complying to the well-established type certification standards. “Commercial feasibility of wind power set ups needs to be enhanced by right mechanisms for tariff determination and restoring the beneficial schemes like GBI or AD that were prevailing earlier,” suggests Dr Kawishwar.

Volatility in yearly PLF – a major risk

Volatility in yearly plant load factors (PLF) is a major risk in wind compared to solar, avers Agarwal. While in the Ind-Ra portfolio, it is witnessed PLFs around P90 level in FY16 and FY17 (except Tamil Nadu and Rajasthan where there were more grid availability related issues), PLF in FY18 were about 3-15 per cent lesser than the previous year in five states among the seven most windy states (except Tamil Nadu where PLFs were more than previous year owing to improvement in grid availability and Rajasthan where generation levels were almost same as previous year). Agarwal also admits that generation risk in case of wind power projects is much more compared to solar. He adds, another major risk faced by wind compared to solar is the seasonality. Bulk of the annual generation is achieved during four windy months of June to September and repayments of the loan have
to be structured around it. Also, many counterparties (mostly state discoms) pay within time just before and during the windy season, but start delaying after the wind season is over, because of shifting of their priority towards other sources of power.

To regain the growth momentum, Agarwal feels, wind will have to establish its cost superiority compared to other renewable sources especially solar. This can only be achieved by investing in technology by turbine manufacturing companies. We have seen times (early 2000s) when PLF of 24 per cent were considered good with a CAPEX of around Rs 60 million per MW. Now bidders are factoring in PLFs as high as 40 per cent with just a marginal increase in capex to around Rs 65 million per MW. This has led to drastic reduction in wind tariff to as low as Rs 2.43 per unit discovered in an auction conducted in December 2017 by Gujarat state Discom. Can it go down further and how fast? And, the bigger question is: Can the tariffs for wind go down faster than solar? Right now, solar is looking to win the race but much will depend on research and development being done by this wind turbine suppliers. According to Agarwal, if they are able to achieve better generation levels with lesser increase in CAPEX requirement, the tide can change.

Suzlon gaining strength

Suzlon has commissioned 626 MW of wind power projects in the financial year 2017-18 (FY18), the highest installations by any player during the fiscal, claims Chalasani. He assd, “With this, Suzlon has gained a market share of 35 per cent despite an extremely challenging year for the sector and several hurdles due to the transition from FiT to bidding regime.”

Suzlon’s market share has been continuously growing: from a market share of 19 per cent in FY15, the wind major has attained a market share of 35 per cent in FY18. From 7,500 MW bidding completed, Suzlon has the largest share of order win from capacities auctioned till date, the company informs.

“Suzlon is well positioned to reap the benefits in this new business regime with our end-to-end solutions, continuous investment in India specific wind turbine technology, vertically integrated operations and best in class services. Technological innovations will continue to be the bedrock of our growth. Our current order book is of 1,134 MW,” Chalasani said.

Recent initiatives at Suzlon

 In FY18 Suzlon and associates commissioned the first Operational Offshore LiDAR based Met Station in the Arabian Sea
 Launched India’s tallest 2. 1 MW WTG (S111 – 140m)
 Launched India’s largest 2. 1 MW WTG (S120 – 140m)
 Launched India’s largest rotor diameter 2.6 to 2.8 MW WTG (S128 – 140m).

Prototype of Suzlon S128
WTG installed in Sanganeri, TN

Recent initiatives at ReGen Powertech

ReGen Powertech has launched ‘Multi-brand Services’ (ISP) for O&M of other company wind turbines also. The company is progressing in the areas of ‘solar hybridisation’ and new high efficiency wind turbine models profitable for such low tariff, informs Dr Kawishwar.

Technologies that help to improve wind turbine efficiency

Institutionalisation of energy management systems with a scope to generate optimum energy for 25 years and implementation of RE Efficiency Standards – IEC 13273 have helped to improve efficiency hence energy economics, comments Dr Sanjiv Kawishwar of ReGen Powertech while talking about the technology that helps to improve wind turbine efficiency.

Today, for wind turbine manufacturers, the focus is on developing products with higher energy yield, reducing Levelized Cost of Energy (LCoE) and maintaining cost competitiveness.

Apart from a host of other features including aerodynamic profile and material of blades, hub height and wing span are the two major factors leading to increase in PLFs. Hub height has slowly increased from 50 metres (in 1990s and early 2000s) to 130-140 metres in majority of the upcoming wind projects. Suzlon recently commissioned its S128 machine with 140 metres hub height and capacity of 2.8 MW. A mere increase in hub height totally changes the kind of resource one is looking at. While at 50 meters hub-height, total wind resource in India was estimated at 48 GW, the same increased to 102 GW at 80 meters hub height. The same potential increases to more than 300 GW at 100 metres hub height (as
per analysis by National Institute of Wind Energy). “More hub height means one can install bigger blades covering more span/area resulting in better power generation (due to more energy transfer). Lighter blades with better aerodynamic profile also have a role to play in better generation estimates for these bigger turbines,” explains Ankur Agarwal from Ind-Ra. Suzlon’s Group CEO J P Chalasani also said, “Innovation in tower and blade technologies aimed towards making unviable wind sites viable, ensuring better yield and increasing tturbine utilisation havebeen the key focus areas”

By Subhajit Roy, Group Editor