Navigating the Winds of Change: Insights into India's Renewable Energy Landscape
We heard from Ramesh Kumar Nandgiri, an expert in Wind & Solar EPC, organized by Systematix. He previously headed the Wind Turbine manufacturing segment at Inox Wind, managed Capex Projects at Vikram Solar, and currently serves as Chief Project Officer at Powercon. Here are the key takeaways from the call:
Renewable energy sector in India:
- Solar efficiency, which was 6 to 7%, has now reached 23% with the latest technologies such as Topcon.
- It is projected that 60% of renewable energy will be solar and 40% wind.
- There is a ₹181,000 crore opportunity for rooftop solar.
- Single metering system is compulsory in every solar and wind park, creating high demand for meters—both for existing and new sites, including those to be converted to smart meters.
Reasons why wind capacity was slow to pick up:
- Wind capacity is largely controlled by OEMs. As of today, wind capacity addition is dominated by 6 companies: Siemens, Gamesa, Duster, Envision, and Inox Wind.
- The years from 2016 to 2020 were challenging, resulting in slow wind capacity additions and no significant ramp-up until recently.
- Supply chain issues, particularly with imported components like gearboxes (each with 60 bearings), were a major hurdle. There are now 2 to 3 players in this sector.
- Indigenous production of 90% of wind turbine blades has eased previous supply chain constraints dominated by China.
- To achieve the 2030 target, India needs to add 20 GW of wind capacity annually, but current additions are only 3 to 4 GW due to EPC constraints, land availability, skilled labor shortages for installation, and grid availability.
- India currently has 46 GW of installed wind capacity, with projections of adding 4 to 5 GW per year.
- There is a rise in repowering projects in Tamil Nadu, Gujarat, and Rajasthan as IPPs focus on upgrading old turbines, micro-siting, grid line changes, and new wind installations.
- The current bidding rate of ₹3.5 is now viable, aided by larger turbines and increased efficiency.
- Inter-grid connections in north, south, and west India are stabilizing.
- Typical costs for wind players are ₹8.5 to ₹9 crore per MW, translating to ₹800 to ₹900 crore for a 100 MW project, covering turbines, OEM, land, and other Balance of Plant (BOP) costs.
What determines which EPC will get an order?
- Capability to execute, previous experience, and faster delivery/installation times in the wind sector.
- All IPPs are seeking turnkey projects including land development, BOP, and erection.
Other Highlights:
- Battery Energy Storage Systems—primarily lithium-ion batteries—play a role in storing energy to meet peak demand, though current penetration is low.
- Solar requires 2.5 to 3 acres per MW, whereas wind needs 1.5 to 2 acres per turbine, allowing for more agricultural land use efficiency with wind.
- Currently, 15 to 20% of potential wind energy lands have been identified in India, with significant potential remaining. Solar may face land availability challenges.
Conclusion
India's renewable energy sector is undergoing significant transformation, marked by advancements in solar and wind technologies despite past challenges. With solar efficiency at 23% and increasing indigenous production in wind, the sector is poised for robust growth. Challenges like supply chain issues and land availability are being addressed, bolstered by policy support and innovative solutions. As India strives to meet ambitious renewable energy targets, collaboration across stakeholders will be crucial in driving sustainable development and realizing the sector's full potential.
