Gamesa will remain No. 1 in Indian wind energy market

Gamesa plans to install 1,600 MW of wind power capacity for various independent producers this year.

Gamesa Renewable Pvt. Ltd, the local unit of Spanish wind turbine maker Gamesa Corp Tecnologica SA, expects to maintain its top position in the Indian market as it installs wind energy capacity at its fastest pace, chairman and managing director Ramesh Kymal said

Gamesa Renewable, which became India’s largest wind turbine maker three years ago by wresting market share from rival Suzlon Energy Ltd, plans to install 1,600 megawatt (MW) of wind capacity for various independent power producers (IPPs) this year, Kymal said in a phone interview on 2 November.

The company, a late entrant in the country’s wind-turbine market, has already installed wind capacity of about 3500MW or 3.5 gigawatt (GW) for its customers in India till date. In comparison, Suzlon has installed more than 9.5GW of wind capacity, but it was built over a longer period of time.

“It took us four years to install the first 1,000 MW, and another 17 months for the next 1,000MW. Then we installed the next 1,000MW in nine months and now we will do the next 1,000MW in just four months. That’s the kind of growth we are seeing because we are focused on the IPP sector. Ninety-eight percent of our sales come from the IPPs,” he said.

Inox Wind Ltd and Gamesa have a significantly higher share of sales in IPPs compared with Suzlon Energy, which has a bigger share of investor clients, who look for tax benefits from accelerated depreciation. But that is changing as Suzlon also is trying to increase its share of IPP clients.

Gamesa had a 29% market share in fiscal 2016 while Suzlon Energy and Inox had a market share of 26% and 23%, respectively.

Suzlon wants to reclaim the 50% share it once had, founder Tulsi Tanti said in an interview earlier this year.

“We have gained market share from the earlier market leaders… We are likely to be the number one this year too. We would like to maintain our market share at 30-35% and we do not have the overarching ambition to achieve 40% or 50%,” Kymal said.

Cumulatively, the order book of Gamesa, Inox and Suzlon touched about 3.4GW as of 31 March, IDFC Securities Ltd analysts Shirish Rane and Mohit Kumar wrote in a 25 October note.

“We expect the Indian wind turbine market size to touch 4.3-4.5GW (per annum) in FY17E on the back of healthy order book of Suzlon, Inox and Gamesa India,” they wrote.

Gamesa counts ReNew Power Ventures Pvt. Ltd, Hero Future Energies, Orange Renewables, Tata Power Co. Ltd, Ostro Energy Pvt. Ltd, and Greenko Energy Holdings among its customers. Parent Gamesa had in November 2014 committed €100 million in investment for expansion of facilities in India.

The Indian unit changed its name to Gamesa Renewable from Gamesa Wind Turbine Pvt. Ltd after entering the solar energy market. It plans to build about 160MW-200MW of solar energy capacity on the engineering, procurement, and construction (EPC) model.

Kymal said the Indian unit is now locally manufacturing inverters used in solar projects from earlier importing them from Spain. This is helping it earn higher margins in building these projects even as low solar tariffs mean margins for EPC companies have been squeezed. Suzlon, which last year won 210MW of solar projects, too is focusing on the solar EPC market.

In June, Gamesa announced it plans to merge its wind business with those of German engineering company Siemens AG. The merger, which is expected to close by March 2017, will not see any changes in the India business, given Siemens is not present in wind in India, Kymal said.

Apart from Suzlon, Inox Wind and Gamesa, wind equipment makers in the country include WinWinD and ReGen Powertech Pvt. Ltd. Large wind IPPs include Welspun Renewables Ltd (now under Tata Power), Goldman Sachs-backed ReNew Power, Morgan Stanley-owned Continuum Wind Energy Ltd, and JP Morgan-backed Leap Green Energy Pvt. Ltd.

India has a target of setting up 100GW of solar energy capacity and 60GW of wind energy capacity by 2022. The country has already has 27GW of operational wind energy capacity.