India is expected to add nearly 20.2GW of new wind power capacity between 2021-2025. This would increase the country’s 39.2GW wind market by nearly 50% and is a clear signal that the market is beginning to bounce back after a slow-down in recent years.
This is according to the latest report from Global Wind Energy Council (GWEC) and MEC Intelligence (MEC+) entitled India Wind Energy Market Outlook 2025.
Sidharth Jain, CEO and Founder, MEC Intelligence (MEC+), commented: “India’s wind market moved forward last year with new tenders, new capital, and new policies. Wind will be the central axis of renewable energy portfolios as we move from renewable energy making up less than 10% of the country’s energy matrix today, to more than 30% by the end of this decade. We will see higher revenue for electricity generation that matches the buyer’s needs, which means generation of electricity at the time and the quality they need. This is where wind will be critical.”
“In 2020, we saw a clear trend of hybrid projects, with procurement occurring across the central, state, and corporate markets, as policymakers sought to find ways to scale-up renewables while reducing the cost of renewables integration. We also saw corporate renewables procurement, an essential tool in the sustainability toolbox for companies, start to wake-up to the benefits of hybrid renewable energy systems, but remains a largely untapped market.”
India is considered by GWEC to be the world’s fourth-largest wind power market, and 2020 was originally forecasted to be a break-out year for wind power in India with a large pipeline and multiple policy interventions to ease bottlenecks. However, the impact of the COVID-19 pandemic was much more severe than anticipated, with only 1.1GW was installed, with the remaining capacity either being pushed into 2021 or dropped by developers.
Other than the severe impact of COVID-19 on the supply chain, some of the other key challenges faced by the market include higher steel prices and higher capital costs. Sandy Khera, CEO, Enel India: “2021 was the year of calibration for India, however, COVID brought the market to a standstill [a situation] not helped by commodity prices. However tenders are still coming to the table for wind and hybrid projects, we could see up to 18GW installed by 2025, with the right market conditions.”
Mr Ramesh Kymal, Executive Director, Adani – Wind Energy and Chairperson of CII Green Power, added: “Steel prices have gone up… also the components and downstream supplies are not available in India and must be imported, which is adding to the cost. To bring down the capital costs, we must indigenize manufacturing of components and guarantee off-takers.”
Key report findings:
- The pace of new installations is likely to double over the next two to three years;
- India currently has a pipeline of projects of 10.3GW in both central and state tenders, which are expected to drive installations until 2023;
- The market post-2023 will likely be driven by nearly 10GW of new capacity awarded to wind projects, mainly through hybrid projects which are becoming increasingly important for the country’s ‘round-the-clock’ power initiative.
In order to put India on a path to energy security and decarbonisation, the report recommends greater consensus and coordination between central and state governments around wind targets, supply chain utilisation, and the definition of a clear market roadmap.
Martand Shardul, Policy Director, GWEC India, said: “Wind is a high-value resource and a critical link in India’s clean energy transition…It is encouraging to see the market beginning to bounce back, but to drive a post-pandemic green recovery and realise its climate goals, India will need to adopt a more aggressive climate emergency approach and set clear short-term milestones to enable even more rapid uptake of wind projects.”
“Over the past few years, the Indian government has been proactive in addressing bottlenecks with land and grid availability. Moving forward, further action will be required to unleash India’s vast wind potential, such as strengthening consensus and coordination to ramp up projects installation between central and state governments as well as developing a clear roadmap to help the planning of supply chain, infrastructure, and finance.”
Download the full report.