INDIA’S WINDMAKERS WANT NATIONAL POLICY; WHAT DOES INDIA WANT?

The wind industry in India is flexing its muscles. The government recently announced its climate change mitigation program (see INDIA GETS SERIOUS ABOUT SOLAR), putting a big emphasis on the development of the nation’s solar resources, waste biomass-to-biogas resources and hoped-for new nuclear. Wind wants in.

India’s wind industry expects to have 6,000 megawatts of capacity by 2012. That falls short of the Ministry of New and Renewable Energy (MNRE)’s 10,500-megawatt goal for wind.

India’s wind industry thinks it can play a bigger role and wants national policy to reflect its potential. Presently, wind project incentives are capped on installations of more than 49 megawatts.

From a description of statements by D. V. Giri, Chairman, Indian Wind Turbine Manufacturers’ Association (IWTMA): “Mr. Giri felt that this cap on capacity had to go if foreign direct investment had to come into this space in a bigger way…”

Giri also wants a well-defined long-term incentive policy that includes a feed-in tariff and a Renewable Electricity Standard (RES) requiring India's state-run grids to obtain a specified percent of their power from New Energy and a specified percent of their power from wind energy by a date certain.

An independent agency, Project Today, attributed the shortfall of capacity development not to a lack of incentives but to a lack of available sites and a lack of transmission.

Ironically, independent auditor KPMG reported that India’s rise to become the 4th biggest wind power generator in the world has been largely driven by government incentives.

Is this a case of KPMG being right about incentives and Project Today being right about what is preventing India’s wind growth while the manufacturers’ association is nevertheless pushing for stronger, perhaps even unreasonable, incentives? Yes and no. Wind industry advocates are not saying KPMG and Project Today are wrong. They are saying better incentives will attract more foreign investment and grow more wind power for India.

In any energy industry, the better the incentives, the more energy is produced. Great tax breaks (like oil’s Golden Gimmick) and great regulation (like oil’s Texas Railroad Commission) grew the U.S. oil industry. For U.S. nuclear energy, the Price-Anderson Act provided government underwriting of the very high cost of insurance and sustained the industry in its growth phase. Germany’s feed-in tariffs generated a boom for its solar energy industry.

If India wants to grow wind, it will give Mr. Giri and the Indian wind industry more and better incentives.

Can somebody pass this obvious point along to the U.S. Senate?

A society in transition, India will need TEN TIMES the energy it now has in 10 years. (click to enlarge)

Call for national policy on wind energy
August 12, 2008 (The Hindu)
and
India to add 6,000 mw wind power by 2012; but below target
August 12, 2008 (Press Trust of India via Business Standard)

WHO
Indian Wind Turbine Manufacturers’ Association (IWTMA) (D. V. Giri, Chairman); The Ministry of New and Renewable Energy (MNRE);

WHAT
As the MNRE announced the wind industry night fall significantly short of its 2012 capacity installation goals, IWTMA called for a generation-based incentive policy to attract foreign direct investment (FDI) into India’s wind sector.

click to enlarge

WHEN
- The IWTMA call for a national policy came August 11.
- 10th Plan (2002-2007): 5,426 megawatts installed (MNRE goal: 2,200 megawatts)
- 11th Plan (2007-2012): 6,000 megawatts projected to be installed (MNRE goal: 10,500 megawatts)

WHERE
India is fourth in the world in installed wind capacity at 8,696 megawatts. China trails, at 5,899 megawatts.

WHY
- IWTMA estimates India's wind potential capacity at 65,000 megawatts. (GWEC)
- IWTMA contends a good generation-based incentive should have no ceiling on capacity such as the Indian government’s pilot generation-based incentive model that applies only to wind projects up to 49 megawatts.
- In India, wind energy has often been seen as a corporate investment for tax purposes such as depreciation benefits.
- IWTMA wants a long-term government incentive policy to bring independent power producers into the wind sector.
- A national long term policy to support wind would also include a feed-in tariff and renewable purchase specifications (i.e., a Renewable Electricity Standard, RES).
- With new investment, non-performing existing wind farms could be made functional either by turbine renovation or new turbine installation.

India has pockets with big wind - and an overall potential of 65,000 megawatts. (click to enlarge)

QUOTES
- Shashikant Hegde, CEO, ProjectsToday: "The shortfall in wind power generated could be due to lack of availability of land for wind farms and the currently planned captive consumption could be used by others if government provides transmission facilities…"
- Santosh Kamath, Associate Director, KPMG Advisory Services: "The robust growth in the country's wind power generation is largely driven by the incentives provided by the government to companies which set up wind power farms…"