Energy is an essential ingredient of socio economic development and economic growth. The production and consumption of energy is often linked to other major issues in society, including poverty alleviation, environmental degradation, and security concerns. Though the installed capacity in the country as on July 31, 2002 stands at 105,083.40 MW, India's per capita electricity consumption at 374 kWh (2000-01) is very low as compared to the European countries. The increased economic output and population imply increasing energy requirements. To bridge India's peak power shortage of 13 percent and energy deficit of 7.8 percent, in the BAU (business as usual scenario), nearly 100,000 MW of fresh capacity addition would be required by 2012, more than 75 percent of which is likely to be coal based. The coal sector's projected growth rate at 6.8 percent for the period 1997-2012 might result in a demand supply gap of 40 million tonnes by the end of 2002.This gap is expected to be bridged through imports. The Planning Commission has projected import of 210 million tonnes of coal and 155 million tonnes of oil by 2011-12 in BAU scenario. Such a trend obviously militates against the energy security, apart from adversely affecting the overall economy.

Renewable energy sources like wind energy are indigenous and can help in reducing dependency on fossil fuels. Renewable energy also provides national energy security at a time when decreasing global reserves of fossil fuels threaten the long-term sustainability of the Indian economy. With abundance of wind energy resources in many parts of the country, especially along the long coastline, electricity generation through wind energy provides a viable and environmental friendly option. Even among other applications of renewable energy technologies, power generation through wind has an edge because of its technological maturity, good infrastructure and relative cost competitiveness. Not only that, development of a basket of technologies is the only insurance against uncertainties.

Apart from direct benefits like augmentation of power generation and contributing to the energy security, the wind power projects also result in substantial socio-economic and environmental benefits. The estimated environmental benefits of installing wind farms would be reduction of the following emissions annually:
CO2 2100 metric tonnes/MW
SO2 2.5 metric tonnes/MW
NOx 1.7 metric tonnes/MW
Total suspended particulate 0.5 metric tonnes/MW

Moreover, introduction of grid connected wind power projects results in direct and indirect generation of employment. It has been estimated that for each MW of installed capacity of wind farms, there is an employment potential of three skilled operators and two unskilled persons. The indirect employment opportunities are about four times of direct employment (i.e. 20 people). During the construction phase, lasting about six months, additional employment is available to 50 local people for civil and electrical work. 

Recognising the importance of tapping renewable energy sources for power generation, India has been working in this direction for more than two decades. The Government of India realised the importance of private sector participation in the wind power sector as early as 1983/84. Accordingly, a national programme was initiated to tap the then estimated potential of 20,000 MW by adopting a market-oriented strategy. This ultimately led to successful commercial development of wind power technology and substantial additions to power generation capacity in the country.

Significant progress made in this sphere was the result of a range of policy support measures and incentives announced by the government for inducting state-of-the-art wind energy technologies on the one hand, while encouraging private entrepreneurs to take up commercial projects on the other.

Though incentives and market-oriented policies existed during the late 1980s, the spurt in private sector participation started only in 1992, after the announcement of the 'Private Power Policy' of 1991. This, along with a booming economy and the attractive fiscal incentives, provided the impetus for accelerated growth of the wind power sector as shown in figure 1. However, after a period of explosive growth that made India the world's third largest producer of wind power, investments fell sharply mid-1996 onwards. 

The following reasons could be attributed to this downturn:

• Decrease in benefits accruing out of tax-credit because of introduction of the MAT (minimum alternate tax); and reduction in corporate income tax by the Government of India in 1995/96 and 1996/97 respectively.
  
• Withdrawal of third-party sale in some states.
  
• Low capacity factor achieved in some of the initial wind farms on account of sub-optimal site selection.
  
• General industrial slow-down in the country.
  

The scenario started looking up in 1999 and this upswing is still continuing. The main factors that contributed to this positive growth are:

• Technological maturity and introduction of machines, suitable for the Indian conditions(eg wind turbines designed for low wind regimes) that resulted in overall higher capacity utilization. This factor helped in attracting more investment from the private sector.
  
• Introduction of bigger capacity and more cost-effective wind turbines. 
  
• Better site selection due to more sophisticated and rigorous wind resource assessment and micro siting. 
  
• Conducive policy regime introduced by some states (Maharashtra was one such state that came out with an investor friendly package, including attractive power purchase prices).
  

One positive fallout of the downturn was that only really serious investors remained, leaving out those investors whose prime interest was to take benefit of tax credits. Thus, now the investors were interested in performance of their wind farms so as to (i) enhance their profitability and (ii) minimize dependence on the utilities (about 80% of the wind power has been used for captive consumption). The fact that some manufacturers/developers started giving guarantee for certain minimum level of electricity generation, also helped in building up the confidence of the investor community. This period also saw transition from smaller capacity machines to bigger ones, from 100 kW to 225 kW and then to 500 kW and 750 kW machines.

The Wind Resource Assessment Programme carried out in India to reassess the wind potential was one of the largest programmes of its kind in the world, covering around 900 wind monitoring and mapping stations in 24 states and Union Territories. So far 208 potential sites have been identified in 13 states. States with high wind potential include Tamil Nadu, Gujarat, Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh, and Maharashtra. It is proposed to prepare an Indian Wind Atlas by using state-of-the-art software like WASP (Wind Atlas Analysis and Application Programme) on GIS platform.

With an installed capacity of 1,640 MW (as of August 15, 2002) India is now recognized as a leading country in the world (Figure 2) in the development and utilization of renewable energy, in general, and in the development of wind power, in particular. 10.5 billion kWh of wind-generated electricity has been fed to the grid so far.

As a matter of fact, power generation from wind has emerged as one of the most successful programmes in the renewable energy sector and has started making significant contributions to the overall power requirements of some states. Figure 3 depicts the status of wind power installations in various states in India. Muppandal in Tamil Nadu has one of the largest concentrations of wind farms in the country whereas Satara in Maharashtra is currently the most happening site.

So far as domestic industry is concerned, there are 8 major companies that are manufacturing wind turbines and components. These companies are either joint ventures or licensees of reputed international companies, a majority of them from the European Union. Out of these, 5 are ISO certified. This manufacturing base not only meet domestic needs but also caters to emerging export markets, including Europe. The annual production capacity is of the order of 500 MW, which can be increased to 750 MW. Large capacity wind turbines in the range of 1 to 1.25 MW are being produced in the country. For testing and certification, Centre for Wind Energy Technology (C-WET) has been established that is also the focal point for wind related research and development activities.

The reassessed gross wind power potential of the country stands at 45,000 MW. However, the technical potential, assuming 20 percent grid penetration, works out to be 13,000 MW. The technical potential would increase as the grid capacity increases. In the draft renewable energy policy, the Government of India has fixed a goal of setting up 5,000 MW of wind power by 2012. BTM Consult forecasts 2,800 MW of wind power to be installed in India by 2006.

The Indian power sector is witnessing transformation through the reform process, characterised by the unbundling of functions, ownership changes, the emergence of competitive markets, and the establishment of Regulatory Commissions. In such a changing scenario - with increasing commercial orientation to the functioning of the power sector - government policies and regulatory approaches are going to have a significant influence in the development of grid-connected wind power, which is closest to commercialisation in real terms. While internationally, renewable energy is being pushed on account of the environment protection, in India, there are the added issues of energy security and diversity.

The present state of wind power and the Indian wind industry is a living testimony of very close and fruitful collaboration between the European Union and India. But there is scope for even greater and continued co-operation in both technological and policy areas. As per Indian government, the technology related priority areas where further developmental work is required, are as follows:

• MW size wind power systems
  
• Wind machines for low wind regimes
  
• Improved rotor blades and gear boxes
  
• Advanced control systems
  
• Development of cheaper materials
  
• Integration of wind farms with weak grids
  
• Power quality improvement
  

On the policy front, India has a lot to learn from European countries, where innovative policy and regulatory frameworks have been designed to give the much-needed push to renewable based electricity. Thus, a meaningful exchange could occur, for instance, with The Netherlands concerning Green Power Certificates and Regulatory Energy Tax; with Denmark on Electricity Supply Act and The CO2 Quota Act; with Germany on Renewable Energy Sources Act and The Green Pricing Scheme; and with U K concerning The Renewables Obligation and Climate Change Levy.

The wind energy sector has grown significantly in India despite ups and downs. Today after having surmounted many a problems, wind in India is known to be a very mature industry. Presently, the focus is on higher capacity machines and low-wind regime turbines, which operate in class two wind regimes. Higher tower heights and wider swept areas have resulted from the experience gained by India in the last two decades. Equally important has been the ability of wind power producers in dealing with grid problems in the country.

In a number of countries, the utilities purchase renewable energy based electricity at prices higher than conventional electricity and pass this additional cost on to the customers who have opted for green power. Considering the fact that in a liberalised market, where ultimately competition would be for the least cost option, this mechanism may not be feasible. Under the circumstances, electricity produced from renewable energy resources like wind requires two kinds of support, namely, (i) a price support mechanism that enables power producers to enter the market and make a reasonable profit and (ii) a stable regulatory environment that encourages renewable based power. Characterised by the non-internalisation of external costs of energy production, costs of wind power tend to be significantly higher than that of conventional power. But the cost of delivered power should be measured in terms of overall benefits associated with that form of power, and their implications. In such a scenario, wind power outweighs conventional power - on account of their environment-friendliness and positive impact on the social development.

There is a vast potential for EU-India co-operation for technological upgradation of wind turbines and balance-of-systems on one hand and for developing conducive policy/regulatory framework and pricing mechanisms on the other hand. The collaborative approach would also be beneficial for imbibing best practices of wind farm management in the Indian context.


About The Author: Amit Kumar Tata Energy Research Institute, New Delhi.