Surge in commodity prices, supply chain disruptions, increase in tax rates, legacy challenges key reasons
India is ramping up its efforts to decarbonise its economy with its commitment to turn Net Zero by 2070 and updated nationally determined contributions (NDC) of getting 50 per cent installed energy capacity from non-fossil fuels by 2030.
Moving away from fossil fuels; promoting green power and green hydrogen; environmental, social and governance targets; electrifying transport; and boosting energy efficiency are all initiatives the government is taking to meet its goals.
The country needs to add renewable energy capacity across all the resources to meet the expectations created through these interventions.
India's green energy transition story hinges on wind. India aims to install 140 gigawatts of wind power capacity over the next decade, of which approximately 100 GW have not yet been installed.
Wind energy contributes to a resilient system by playing both a complementary and a grid-balancing role since it is available during peak hours and after daylight hours, when solar energy is unavailable.
There is no doubt that wind energy is cost-competitive with fossil fuel-based generation. Further, using India’s wind resources will contribute to a gradual reduction of import bills and an increase in energy security.
Even though there is a high potential for the wind industry in India, installations have slowed. Around 2.3 GW wind capacity will be installed in 2021 due to a large pipeline as well as policy interventions designed to ease execution bottlenecks, according to the India Wind Energy Market Outlook 2025 report by Global Wind Energy Council (GWEC).
The stand-alone wind power bids of the Solar Energy Corporation of India were oversubscribed in 2021. This is an almost 50-80 per cent improvement over the subscribed volumes in the previous two years.
Despite this, the wind project activity in 2021 was lower than expected — only 1.45 GW of wind capacity was installed. The government attributed this to delays during the second wave of the COVID-19 pandemic and heavy monsoons in 2021.
Installed & projected wind capacity in India
Source: India Wind Energy Market Outlook 2022-2026; Global Wind Energy Council
Experts Down To Earth reached out to, however, had a different view. Tender awards have reduced since reverse auctions were introduced in 2017, according to them.
There were a large number of bids as a result of the new scheme, but they were highly competitive. So, the market has centered around a few substations in Gujarat and Tamil Nadu, which offer the best wind resource potential and lowest land costs.
This resulted in bottlenecks that slowed down project activity. At the same time, the cost of solar-based power continued to decline, creating a wider gap between electricity generated from wind and solar energy. This resulted in delays in signing power supply agreements for already auctioned projects.
India's wind energy resource may be fully unlocked by taking the following steps, according to the latest report by GWEC — India Wind Energy Market Outlook 2022-2026:
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