Winds of change are blowing in India

By M. Menakshi

Saudi Consolidated Electricity Co.

In India, the power generation capacity has risen from 2,300 MW in 1950 to more than 76,700 MW by 1994, and by the turn of the century, it is expected to exceed 90,000 MW. Still, it is estimated that there is a shortage of about 30 percent at peak power and an energy deficit of 11 percent, leading to a loss in industrial production of 3.1 percent due to power shortages, according to the Central Electricity Authority.

In addition to concentrating on inviting multinational companies to invest in electricity for meeting and tiding over these shortages, a lot of incentives are also offered by the Ministry of Non-conventional Energy Sources to develop renewable energy systems.

Solar, wind, ocean thermal, hydrogen, tidal and biomass are some of the varied renewable energy sources tried in India, of which only wind has come anywhere close to being commercially viable. Wind is classified as a form of solar energy. The Earth receives 75,000 trillion kW of power from the sun, and a mere 0.1 percent of this would be sufficient to meet the entire requirement of people. Wind is generated by the pressure differences created by unequal heating of land and water, and the force depends on atmospheric conditions.

The energy ministry offers a variety of incentives, including:

– A 100-percent depreciation allowance in the first year under the income-tax act, which can be very attractive for companies with taxable profits from other sources since the allowance permits companies with taxable profits equal to, or more than, the project cost of the wind power plant to avoid tax liability;

– A customs duty exemption for key components, which reduces the cost of components;

– A five-year tax holiday;

– concessional finance and capital subsidies;

– wheeling, which allows power generated by wind at one site to be used at another;

– banking, which allows power to be withdrawn from the grid during low demand periods; and

– purchase of power by electricity boards, at near-current tariffs.

Wind generators can operate only when wind speeds are around 20 km/hr, which is possible in only a few places. Also, the required wind speed will not be available throughout the year, bringing down the plant load factor to around 20 percent or 30 percent. An area of four to six hectares would be needed for a 1-MW wind farm, making land cost a primary factor.

It is worthwhile to note, however, that land prices in the notified areas where wind farms are feasible haves already increasedmultiplies by almost seven to eight times.

The capital cost of wind power stations can be comparable to that of thermal stations. So capital cost, considered with zero fuel costs, tax and other financial incentives, along with the banking and wheeling, make the wind energy option very attractive. Moreover, industry watchers confirm that the cost of wind turbines is inflated and there is room for a price reduction of 10 percent to 20 percent.

Wind power`s viability in the short term depends on the incentives offered, while in the long term, it will depend on the increase hike in power prices for electricity.

India entered into the field of wind energy in 1986, through demonstration projects by the then-Department of Non-conventional Energy, feeding into the grid. NEPC-Micon, a private company, entered the arena in 1991; by 1994, the installed capacity jumped to 140 MW. Introduction of the 100-percent tax incentive had a tremendous effect, and the capacity increased by up to an additional 210 MW in 1995. There are 21 manufacturers or developers in wind power now.

A wind power potential of 20,000 MW is estimated, and the installed capacity is expected to be between 700 and 1,200 MW by the turn of the century. The installed capacity is now above the 500-MW level. Wind farm projects of more than 1,500 MW are in various stages of development.

The following are a few of the leading companies in wind power projects:

– Subash Project and Marketing, Anil Sethi, chairman–the company is implementing 137 MW of wind farm projects and also entering into infrastructure development for hydroelectric and thermal power.

– NEPC-Micon, Raviprakash Khemka, chairman–this company is a pioneer in wind farm projects, having installed more than 750 wind power generators, ranging from 225 to 600 kW.

– Renewable Energy System, Anjaneyulu, chairman–this company is introducing two advanced-blade wind turbines, in addition to being a pioneer in solar power.

– TTG Industries, Ravi Srinivasan, chairman–this manufacturer is planning to introduce a 1-MW model.

– REPL Engineering, Homi R. Patel, chairman–this company has an order to install 7 MW by March 1996.

– Sree Rayalaseema Power Corp., T.G. Venkatesh, chairman–this company commissioned a 2-MW wind farm in the fall, is adding a 5-MW plant and is planning a 100-MW multifuel unit.

Other companies are entering this industry, as the demand for wind plants grows.