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Abridged India Wind session at WindEnergy Hamburg 2020

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).

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Abridged India Wind session at WindEnergy Hamburg 2020

  1. 1. Abridged India Wind Session at WindEnergy Hamburg 2020 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) • What are the important challenges that need to be addressed to accelerate India’s wind power growth and achieve the country’s ambitious renewable energy targets? At the macro level, the demand for energy in India is growing. The Central government is completely aligned to their commitment to renewable sources and has set up an ambitious renewable energy target for 2022 and 2030. Within wind, the government has issued around 16 GW of tenders over the last three years, out of which 9 GW projects are still under construction. To accelerate the growth of the market, the fiscal roadmap of power purchasing distribution companies (DISCOMS) need to be updated to reflect the government’s ambitions. This will create the room for signing up the power supply agreements. Also, moving away from thermal will accelerate India’s wind power growth since the power from wind is complementary to the power produced from solar PV. India should implement the phase-out of old and polluting plants. • How can India become a renewable energy manufacturing hub, as per the “Aatma Nirbhar Bharat” Initiative? What does this mean for both local and global wind sector? The government initiative of “Aatma Nirbhar Bharat” is focused on promoting the Indian manufacturing sector. Ministry has provided full support to the companies planning to expand or set up bases in India for manufacturing and export of services in the RE sector. India is fairly established in terms of local manufacturing in the wind sector. Expansion of manufacturing capability and deepening of the supply chain to include some components, which are imported, depend on the scale of the domestic market and technology from sub-suppliers. Higher predictability on year-on-year firm demand for wind would be required to get the volumes up. In terms of global manufacturing, the major opportunity for India lies in acting as a low-cost footprint alternative to counter the China-risk and supply to the US and LATAM market. We are in close competition with Vietnam and China for manufacturing setup location. • What measures has the Indian government taken to support the wind power sector in the post COVID recovery measures and stimulus packages? o Central government has come up with innovative tenders such as round-the-clock tender, and peak power, to ensure the growth of the wind sector
  2. 2. o Waiver of transmission charges for the renewable sector has been extended o In times of COVID, the government gave a five-month extension to all the projects that got effected by COVID • What will be the future of Corporate PPA (Power Purchase Agreement) market in India? Around 50% of electricity consumption comes through commercial and industrial customers. C&I Consumers are highest paying consumers within any DISCOM. Bulk supply at MW scale is a challenge as there is not a lot of policy-level/regulatory support. However, initiatives such as RE 100 and WBCSD corporate PPA are being taken up to make a win-win scenario for DISCOMs and C&I Consumers. Under these, one of the solutions could be that DISCOMs themselves play the role of contracting RE and supply to customers at a certain rate in the form of green tariff for bulk supply. This will retain C&I consumers in their network. • How will wind compete with the low pricing of solar in the country? Wind should not ideally compete with solar since not only India needs to exploit all its power sources available, but also because it complements solar due to its stable profile and complementary seasonality. Nevertheless, they compete in terms of pricing/volume contracts as there is no requirement in terms of quality power right now. This might be short term. However, this has already started to change. For example, the discussion has already started on the curtailment, which was evident in the first hybrid project auction conducted in 2020 that mandated a certain CUF (Capacity Utilisation Factor). By 2022, it is likely that there will be a shift towards generating power at the specific time of the day and by 2024, there will be a controllable dispatch requirement. If India were to migrate towards dispatchable renewables, then wind and solar need to work together and wind should also be considered as an alternative to thermal. • The Indian government has ambitious offshore wind targets, but the sector has been slow to take off in the country. Which state, GJ or TN, will lead offshore wind in India and what will be required to kick-off the growth of the market? Offshore Wind is the future of India along with onshore wind and solar, especially to manage complementarity. For offshore wind to grow, the scale is important, and the government made a big announcement with its ambitious targets. The focus needs to come back again on this sector by policymakers. India has continued to work on developing sites for OW: o India has installed a LIDAR in GJ and there is a plan for two more LIDARs by March 2021. All the surveys have been completed – navigational, rapid EIA, geophysical, sediment sampling, bore-hole studies, and tide gauge measurement. o In TN, the first LIDAR is planned in Sep 2021. There are some community issues which might further stall the installation of LIDAR. The work has to be initiated on the surveys. Government is considering two other options going forward:
  3. 3. 1. Demo projects: TN government is exploring the possibility to set up demo projects at the Offshore National Test Research Station (near-shore) along with the help of the Danish Energy Agency to check different technologies and prototypes. 2. Nearshore projects: Three sites have been identified in GJ and TN where nearshore projects can be developed without Offshore grid requirement and offshore deployment. The projects are currently under the approval stage. Policy certainty- Long term sustainable Policy framework for offshore is required, which should incorporate a strategy for port development, manufacturing, logistics, etc. This will help instil confidence of the foreign investors in the Indian offshore wind sector. We should also shift our focus from cost to value and take it to nationwide. About MEC Intelligence MEC Intelligence, also known as MEC+, is a specialist research and consulting firm for the marine, energy, and cleantech industries. It has expertise in guiding senior management on new technology and market opportunities and facilitating complex decisions through facts and logic. It is based out of India and Denmark. Clients have included the largest global energy players, shipping companies, private equity funds, and supply chain players. MEC+ has delivered insights on some of the largest M&A deals in India, hi-tech innovation and technology roadmaps for global supply chain players, and strategic planning for profitable growth across multiple businesses. For more interesting reads, visit Expertise and Insights. For regular updates on the India energy sector, subscribe newsletter or follow us on Linkedin