According to reports, Suzlon Energy Ltd. Wednesday said it is ramping up project execution capabilities in India to meet rising demand for wind energy in the country and is looking to acquire small technology companies to add value to its business.
Suzlon Energy is India’s largest wind turbine manufacturer, with about 50% of the country’s market share, and about 10% of the global wind energy market along with its German unit, REpower Systems SE.
A tough economic environment hurt sales volumes in its largest markets in Europe and the U.S., where it is yet to fully recover. Suzlon shifted focus to growth in India’s wind energy markets, a strategy that paid off with two consecutive profitable quarters after about two years of losses.
“The demand [in India] is there. The challenge is mainly how to expand the construction capacities,” Suzlon Chairman Tulsi Tanti said.
Mr. Tanti said there is considerable interest in investing in India due to favorable regulatory measures and incentives for renewable energy.
He said independent power producers, which comprise 70% of wind turbine customers, have “ambitious plans” of adding as much as 5,000 MW each in the next five years. But a severe lack of infrastructure is a problem.
“We’re working to invest in the grid, roads, sub-stations and infrastructure,” Mr. Tanti said.
The company has a manufacturing capacity of about 4,200 MW but a project execution capacity of only about 2,000 MW, and is gearing up for larger project execution capabilities as demand in India grows.
Infrastructure constraints such as accessibility to transport, water or power are among the topmost reasons why development projects in India stall and targets are missed.
Mr. Tanti said Suzlon is also “continuously” looking to acquire small companies that may be start-ups, but which are developing specialized technologies in the wind energy sector.
“We’re heavily concentrating in developing technology,” he said, which can effectively be employed in the “large value chain of products” the company offers.
These may not be full-fledged turbine technologies, but could be related to the material used to build wind turbines, specialized components or equipment, power-saving or transmissions.
Such investments would typically be small in nature, Mr. Tanti said.