CHENNAI: Old order is giving way to new, in wind power installations across the country.
After Tamil Nadu and Maharashtra, newer states like Rajasthan, Madhya Pradesh and Andhra Pradesh are coming up as favorable destinations for wind power, driven by attractive policies and high tariffs.
According to data from the Indian Wind Turbine Manufacturers Association, in the first half of financial year 2014-15, capacity additions in states like Rajasthan have gone up to 108 megawatt (MW) from 35 MW last year, while Madhya Pradesh saw 94 MW of capacity in 2014 from no capacity being added during the same period in 2013, while a traditionally strong state Maharashtra saw a sharp fall in new windmill additions due to policy uncertainties.
“Rajasthan and Madhya Pradesh will be the new top states next year. Tariffs are good and policies are easy in the states and a lot of companies are going there,” Sunil Jain, president of Wind Independent Power Producers Association (WIPPA) and CEO of Hero Future Energies, said. Rajasthan and Madhya Pradesh offer tariffs of Rs 5.64 and Rs 5.92, a higher than Andhra Pradesh offering Rs 4.71, Tamil Nadu’s Rs 3.51 and Rs 4.20 in Karnataka.
Andhra Pradesh and Karnataka have also seen an increase in capacity additions in the last six months. While these are primarily because of orders booked last year, things are looking up in the states. “Andhra Pradesh is doing a lot for renewable energy, planning 500 MW each of wind and solar power by next year, so we expect positive revisions of tariffs, and there will be a lot of capacity coming in there” an official from a wind turbine manufacturing company said. Karnataka too is doing well, with several companies looking to put up windmills for tax saving under the accelerated depreciation scheme where companies get to write off 80% of the project costs as depreciation in the first year to save taxes. Going forward too, improvements in technology will allow wind turbines to operate well even in areas where wind flow is not very high, companies say.
“It is good that many new states are emerging as destinations for wind farms and wind energy is spreading from being concentrated in just Tamil Nadu and Maharashtra, but it is equally important that the new states prepare in advance to manage the transmission requirements, and handle grid integration of these resources,” Vineeth Vijayaraghavan, an industry expert said.
The traditional wind power strongholds – Tamil Nadu and Maharashtra – are losing flavor. New installations in Maharashtra fell sharply from 426 MW between April and September 2013 to 88 MW this year.
“Companies found it very difficult last year as there were uncertainties on signing power purchase agreements (PPAs) with the state utility, transmission issues and problems with land acquisitions. So, not many companies will take the risk again,” Jain of WIPPA said.In Tamil Nadu, while installation numbers show an increase in capacity additions in Tamil Nadu, they are projects planned earlier being executed now, and no new orders have been booked in the state in the last six months due to low tariffs and issues of transmission.