What’s in store for wind IPPs in 2016?

The upcoming Union Budget (2016-17) provides an opportunity to strengthen the demand situation in the economy. According to the Association of Power Producers, the increase in Clean Environment Cess announced by the government will adversely affect the power tariff for consumers, as it leads to an increase of 12-13 paise per unit. There was a workshop held by Independent Power Producers Association of India (IPPAI) for its members to gather their broader viewpoints.

The wind IPP India energy market has been revolutionized by a number of factors, influenced by time, technologies, policies, and financial mechanisms that have pushed investments in this sector in India. The investments are geared more towards independent power producers (IPP) as compared to manufacturing projects. The Central Government has set a target of generation of 60,000 MW wind energy by 2022. This implies that Several IPPs and other wind energy players feel that if the new policy guidelines are steered in the right direction, then the wind energy sector will receive a major growth impetus. Of the 25,188.39 MW of wind power in the country, around 70% is built on AD. The rest comprises independent power projects, whose share has witnessed a steady increase over the years. CARE ratings reveal that there is huge untapped potential in wind power. It also brings to light that due to the limitation of grid infrastructure, the amount of energy produced from wind farms could not be effectively transmitted to consumers, this causing wastage of energy.

The financial year 2015 recorded an effective overall installation of wind power projects. Going forward, the FY 16-17 is likely to see the growth in capacity additions between 2000 MW to 2500 MW given the wind power projects in the pipeline. However, reports and analyses often point to the uncertainty that confines the financial structure of wind power projects in India. It demands to be noted that though the untapped potential is vast, it still remains uncertain as to how much of it can be fructified. As on January 2014, states like Maharashtra, Rajasthan and Tamil Nadu had utilized their overall wind energy potential by more than 50%. On the other hand, Karnataka, Madhya Pradesh, Gujarat, and Andhra Pradesh had estimated wind potential of 13.6 GW, 2.9 GW, 35.1 GW, and 14.5 GW respectively, spread across 26, 7, 40, and 32 wind farmable sites out of which it has been able to utilize only 17%, 13%, 10%, and 4% respectively of capacity. With extensive experience in operating wind and solar farms, Welspun IPP has the potential to emerge as a leading independent supplier to the national grid through path of renewable resources.

Solar power generation and energy storage can contribute to India’s long term energy security and help achieve its climate change objectives.