India’s wind energy capacity can only realistically reach 50 GW by 2022. This is according to a new report released by the Global Wind Energy Council (GWEC) and MEC+ (MEC Intelligence).
The report, ‘India Wind Outlook Towards 2022: Looking beyond the headwinds‘ analyses the factors which have led to a drag on market growth for India’s wind energy industry over the past two years. It provides an assessment of the forecast along with a pathway to overcome these challenges to realise the high potential of the market.
The report finds that even in the high case scenario, India is likely to fall short of its ambitious wind energy target for 2022. The country is likely to undershoot target by up to 10 GW if urgent regulatory challenges are not addressed.
In a statement, the GWEC notes that the report highlights key challenges that must be overcome to restore strong wind market growth in India, including grid and land availability, off-taker risks, onerous tender conditions, and low tariff caps.
Collectively, these challenges have led to the last three central wind tenders and all-state wind tenders to be unsubscribed, retendered or even canceled, while 80 per cent of awarded projects have been delayed by 6-12 months.
Three scenarios for new wind installations in India until 2022 are highlighted in the report, ranging from 11-17 GW of installations depending on the extent and speed with which the government and industry are able to resolve these challenges.
In 2020, supply chain disruptions due to the impact of the COVID-19 crisis will further compound existing challenges to delay around 0.7-1.1 GW in new volume to 2021 and also possible cancellation of some planned auctions.
India, fourth-largest onshore wind market
India is the world’s fourth-largest onshore wind market by installations, with 37.5 GW of capacity as of 2019, and has the potential for more than 695 GW at 120 metres. Wind is already the second most competitive energy source on India’s grid today, and the government has set a target to reach a total wind capacity of 60 GW by 2022 and 140 GW by 2030. However, project installation has been decelerating recently, with only 2.3 GW installed in 2019, nearly half of the 4.1 GW installed in 2017.
Ben Backwell, CEO at GWEC said: “India has been one of the world’s largest wind energy markets for many years, and the government has put in place ambitious renewable energy targets in order to fulfil the country’s growing energy demand, which is set to double over the next ten years. While we applaud the leadership which the Indian government has shown, the targets alone are simply not enough to ensure the market grows at the right pace to reach its objectives. Setting realistic prices, a faster build-out of grid infrastructure, ensuring market liquidity and streamlining land allocation and site development will be crucial to revive auction appetite and accelerate execution of India’s pipeline of wind energy projects”.
“Ultimately, India must overcome the challenges identified in the report not only to get its wind market growth back on track, but to also to provide new investment opportunities, jobs and affordable energy to contribute to the country’s economic recovery from the COVID-19 crisis” he added.
Sidharth Jain, Founder and CEO at MEC+ commented: “India’s wind market growth has been slow over the past two years, and growth will continue to be uneven until 2022.
“The current COVID-19 crisis is aggravating the situation as supply chain disruptions, manufacturing and transport restrictions, and economic uncertainty are adding further obstacles for the industry both in India and in other markets who rely on India as the second-largest export hub for wind energy components in the world.”
Jain added: “The immediate impact of COVID 19 will be a delay in the projects scheduled for Q1, Q2 2020, however, more far-reaching results can impact up to 3.5 GW of volumes due to projects with thinly spread developers, financial crisis and limited new auctions.”
On 20 May, the GWEC and MEC+ along with industry leaders will discuss the key findings of the report through a virtual report launch and roundtable. More information on the virtual report launch and registration can be found here.
Download India Wind Outlook Towards 2022: Looking beyond headwinds here.
Originally published on esi-africa.com