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Kenersys expands in India with purchase of land for wind farms in Gujarat and Tamil Nadu

According to reports, Kenersys Group, a designer and assembler of wind turbines majority- owned by the Kalyani group of Bharat Forge, expects to set up an assembly operation in Brazil before it sets up such a facility in the US. It is also stepping up its presence in India, its largest market, with purchase of land in Gujarat and Tamil Nadu.

“We could set up a presence in Brazil in the next two-three months and we are currently looking for partners there because in the next three years, we must be present in the US and Brazil. After Brazil, we expect to set up in the US where we should be present in three years from now. The Brazilian government has a policy that on a project basis, there should be 60% local sourcing so we will need local manufacturing,” Kenersys Group’s global CEO, Paulo Fernando Soares, told reporters here.

Brazil is also a focus area for Bharat Forge, whose chairman and managing director, BN Kalyani, had told reporters after the company’s annual general meeting that they will need to have a presence in South America, specifically in Brazil. “We need to aggressively expand in the next round, in South America, mainly in Brazil,” he had said.

Kenersys, short for Kalyani Energy Systems, is a 75:25 joint venture between the Kalyani group and the US based First Reserve Corporation, a private equity fund focused on the energy sector, has two plants currently, one in Germany where it designs and assembles wind turbines and the other in Baramati, near Pune.

India accounts for two-thirds of Kenersys’ total installed capacity of 74 MW, followed by Sweden with 20 MW, Germany with 15 MW and the US with 2.5 MW, its first in that country.

“Globally, we plan to instal 150 MW capacity by December, having done 45 MW so far. In India, since the financial year is April-March, investments start later,” Mr Soares said. The company had stated that revenues this year, January-December 2011, would be Euro 150 million.

Referring to its India plans Mr Soares said they have bought land near Rajkot, Gujarat and in Tamil Nadu.

“We will instal a 60MW wind farm this year and 70 MW next year. The Indian business model requires us to buy the land, create the infrastructure to set up the turbines and to evacuate the power, etc,” Mr Soares said, indicating that this ties up funds.

He pointed to other issues specific to India’s wind energy sector which are constraining growth. These range from different policies and tariffs of each state and the lack of a national grid code. Moreover, wind farms are privately owned while the grid to which they wheel the power is publicly owned, that is, by the state-owned power utility. This causes problems such as those faced by wind power companies in Tamil Nadu where the weak grid cannot cope with high speed winds and thus asks the operators to shut the wind turbines whenever wind speeds are high.

“Wind turbines have a revenue-based finance model and shut downs like this upset that,” he pointed out.

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