The ongoing trade tariff negotiations between China and the US can be an opportunity for Siemens Gamesa’s India manufacturing units to step in and meet the rising demand for wind energy equipment.
“Looking at the export capabilities, we need to take in respect the current negotiations between China and US and, looking at it in a calm way, there might be opportunities around that (for manufacturing more wind energy equipment in India),” Markus Tacke, Chief Executive Officer, Siemens Gamesa, told BusinessLine.
Tacke was responding to a query on the scope for Siemens Gamesa to increase its wind energy equipment manufacturing facilities in India. The company currently has two blade factories in Nellore (Andhra Pradesh), and Halol (Gujarat), a nacelle factory at Mamandur (Tamil Nadu) and an operations and maintenance centre in Red Hills (Tamil Nadu).
Tacke said the company recently started using the India manufacturing facilities to export wind energy generation equipment, in addition to meeting the domestic demand. “We have had a very good and successful practise in the past that products made in India are used in India…We actually use our Indian facilities to export, we have the example of blades recently.”
In 2017, the going had got difficult for wind energy equipment manufacturers after the Centre struck down feed-in-tariffs and introduced reverse bids for awarding wind energy generation tenders. A sudden drop in margins, coupled with the drying up of orders, had put the domestic wind industry in a stiff. To keep the ship sailing, Siemens Gamesa found overseas markets for its India products.
Commenting on the quantum of exports, Ramesh Kymal, the India head of Siemens Gamesa, said, “The export numbers are not that significant right now. We have been sending blades to different places such as the Americas. Now the larger 145 motor (the 145 motor produces 4.5 MW of power from a wind turbine with a 145 meter rotor diameter) are also being exported.”
According to the Global Wind Report 2018, the global wind energy market is expected to grow at an average of 2.7 per cent each year from 2019 to 2023. Total wind energy installations are expected to reach 58.7 GW in 2023, from 51.3 GW in 2018.
“In Latin America, governments’ commitment to large-scale auction is driving the volume. Maintaining this commitment is crucial for positive development in Latin America. For the next two years, the Production Tax Credit (a tax rebate for installing renewable energy) will drive the US market, good economics and state-level renewable portfolio standard (a mandatory regulation to purchase solar or wind energy) will ensure future market activity,” the report said.
“In terms of turnover it (export) is not that large now because we have to cater to the local market also from that same facility. But we find that wherever there is large manual content, for example in blades, we are able to ramp up faster and bring down the costs to make it cost competitive. So exports of these items has a great future in my view,” Kymal said.