India is in a hurry to ramp up wind power capacity to 60 giga watt by 2022. The government is looking to auction wind farms this year and spur up wind power trade among States. Speaking to Bloomberg TV India, Indowind Energy Chairman KV Bala says the industry has been passing through a rough phase for the past 2-3 years and pricing in most States are yet to be feasible when adjusted against inflation.
However, the Centre’s renewed interest in wind power and possible policy changes for mini and macro grids and offshore wind farms can help India achieve the ambitious target and benefit the industry, he said.
What do you make of the government’s initiatives to auction wind farms? It is planning to auction about 1 GW in the coming two months.
The government’s target for the renewable energy sector seems to be really good. So far, the country has got about 30-31 GW of wind-power farms. But we have been having a tough time for the past 2-3 years due to grid and technical issues. The depreciation incentive was withdrawn and then introduced again. Compared with the growth that happened in the last 2-3 years, this push given by the new government is really good, which is going to make the industry players work well and move forward from here.
But I will not be able to comment right now on whether we can achieve 1 GW in a short term because there are bottlenecks in the infrastructure and there have been grid issues in Tamil Nadu. In many other States, the pricing is not in line with the expected viability of a project after factoring in the inflation rate.
But definitely, what the government is targeting by 2022, the initiatives and interactions which are happening, are leading the country in the right direction. Already, policy matters such as the mini and macro grids and offshore wind farm policy under Renewable Act are under discussion. If they come through, then the country can achieve the target and the industry can also do much better.
How do you see the sector and your company benefitting from the Centre’s renewed interest in solar and wind energy? What are your short- and medium-term plans?
Till last year, there were grid issues in Tamil Nadu. And unfortunately, last year the monsoon was also not good and so our top-line did not meet the expectations. But in the current year, the wind and monsoon are forecasted to be better. The Tamil Nadu government has promised that the grid will be available to the maximum possible extent. So we are expecting a better year in terms of production because of the normal monsoon. Last year, we added 4.2 MW in capacity by March 2016, which is doing well. Because of that, we expect to improve the top-line a little bit.
The profitability of the company took some hit because of the rupee depreciation 3-4 years back. With the additional capacities and small price increase, which we achieved last year, we hope this year will be much better than the last fiscal year. We will be looking at new projects. First, we are looking at projects in our existing sites and bettering them.
Solar energy is a big opportunity. We have experimentally joined hands with another small solar project we bid in the past. We are looking at utilising our available land for adding a solar firm and we are waiting for the right policy.