Coming from the same bloodline of renewal, it becomes very important for wind and solar to be in each other's company. But more than that, both forms of renewable energy depend on each other to balance the energy supply.
Below are edited excerpts from the webinar:
Wind energy overview
The Government of India has shown great interest in the renewable sector. Today, the installed capacity of refurbishment in the country is 87 GWs. However, these figures from about 10 years ago would have been inconceivable.
In the past, renewable energy was a fringe player, but today it is one of the main players. Today, the total capacity of renewable energy is 20–25 percent and it contributes about 10 percent to the energy basket. The renewable sector has managed to reach that level. However, the target set by the government by the year 2022 is 175 GW. But I have a personal reservation about it.
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About 87 GWs have been received, 40-41 GWs projects are under implementation phase, and bidding for 31 GWs is in the pipeline, with the government assuming the country will be able to get around 160 GW of renewable energy.
In terms of wind power, it is 37 GW which is 10 percent of the total capacity. India is the fourth largest country in the world in terms of total wind installations. It is the second-largest in wind capacity in Asia.
While wind power has been a leader all the time, solar power has been growing rapidly in the last few years. It is not wind versus solar but it is wind and solar. I firmly believe that neither solar energy can survive without wind nor wind without solar.
Out of the 175 GWs target set for renewable energy, it is estimated that 60 GW are the targets set for wind power - only 37 GWs have been achieved, 9 GWs are under implementation and 3 GW are under a bidding process. The government is optimistic about reaching 48 GWs (and 60 GWs per set target).
Challenges and opportunities in the air
Challenges and opportunities in the air
In the last few years, there has been a significant change in terms of technology (in the renewable energy space). Today, the size of the wind turbine is about 3.3 MW, (until recently it was 1.5 MW, but it has been developed).
Not only size but hub heights also play an important role. Now, we are talking about 140–160 m hub heights. Such highs improve the efficiency of sites - so low potential sites will actually become high-wind potential sites. These technological changes have improved efficiency in the wind energy sector. This has reduced the cost of tariffs.
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The turbine has one element that is rarely understood and is operational maintenance services. Today, in terms of operational maintenance services, more than 97 percent of machines are available. This case was not an old case.
Yet another area explored in the wind sector was the digitization of the service business. So, there is constant innovation in the service business as well.
On the commercial side, we went through the bidding process. Adding to this, there was a significant change in the profile of customers. It was usually retail and captive consumers. Today, there are large utilities, foreign and domestic among others, who are our customers. There has been a new change in the gamut of the wind sector.
The critical challenge is one that revolves around capacity addition. In the wind sector, it has slowed down considerably over the years. In FY 2017, which was the last year of the feed-in tariff, we added 5.5 GW a year to one country. However, three years put together - FY 2018, FY 2019, and FY 2020 - we have reduced this. Capacity addition has slowed down and is one of the problems.
The challenge was to move from a feed-in tariff to a bidding system. We also faced challenges of land acquisition or connectivity among other things. This is because the bidding process moves from the state level to the central level, where the only parameter for bidding is the tariff.
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Therefore, every player wants to set up a project where there is a highway. Gujarat saw a huge demand for it. Therefore, the price of land was increased in some areas, after which the government intervened and changed the rules which affected the (viability of the projects). The move brought many projects to a standstill. I am not seeing a significant ramp-up in the region in the near future.
Most of us are facing challenges in making this transition from feed-tariffs to competitive bidding. Unlike any other region, we are in bidding wars. The industry bids at low tariffs without evaluating (to determine carefully) whether it is truly sustainable or not. Therefore, the country is plagued with low tariff issues among other issues that are hurting the region.
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This led to additional crises, with a large number of power purchase agreements (PPAs) looking at ways to exit the PPA. This led to contractual issues besides efforts to reduce power consumption. As the tariff changed, the sector turned into several issues.
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Another challenge faced was the area integrated with the grid. Since renewable energy contributes about 10–11 percent to the energy basket and 23–24 percent of capacity, you need to be part of the grid discipline. Unlike traditional energy, renewable energy faces the challenge of maintaining that discipline. Therefore, scheduling and forecasting is easier in the case of conventional energy, but not possible in the case of large-scale wind power. To achieve this, several other organizations such as Power Grid, need to plan with the Central Electricity Authority (CEA). It is to be noted that all these authorities come under the Ministry of Power and not under the Ministry of New and Renewable Energy (MNRE). This complicates the demand for coordination.
Power is a complex field. And MNRE lacks understanding of this area. Thus, the integration of the electricity sector with renewable energy still needs to be done.
Solar or wind alone cannot sustain on a long term basis. Both have to get married. It cannot be either wind or solar but must be solar and wind.
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Wind energy, like solar power, prioritizes decentralized distribution for rural India. Yet another area that can be noted is this.
Further consolidation
Consolidation will take place across the region. According to a report, in the next eight years, there will be only three OEMs (in the wind sector) globally that will enjoy a 90 percent market share. This will be driven by the pressure to become efficient and to adopt cost-cutting measures. Therefore, many players cannot survive. This will be a big opportunity for companies that come with deep pockets for consolidation.
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Atma Nirbhar wind energy of India
The wind sector meets all the criteria of Make in India. Wind power constitutes about 10 percent of India's total installed power generation capacity. India can actually become a center of export not only for wind turbines but also for component manufacturing. There is a huge amount of capacity.
As far as the wind sector is concerned, it was always made in India. We should encourage more exports. However, in the case of solar, there are a set of challenges (it still depends on imports). However, if the country is considering becoming self-sufficient, the industry will work towards achieving it.
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