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Offshore wind energy: Industry sceptical about high costs & cumbersome procedures in India

According to reports,  India has begun work to assess the country’s potential to generate  wind energy offshore but the industry is sceptical about the option because of high costs and cumbersome procedures. Wind energy accounts for less than 10% for India’s total  power generation, with installed capacity of 16,000 MW.

But ambitions for the sector are big, with estimates that the capacity will be doubled within five years. While  offshore turbines deliver 50% higher plant load factor (a measure of capacity utilisation) than onshore farms because of higher wind speeds at sea, the capital cost of tapping offshore wind could be over Rs 30 crore a MW, five times that of onshore. “So, we would require incentives to make it attractive,” said Sumant Sinha, founder chairman and CEO of the Goldman Sachs-backed Re-New Wind Power.

A call for more incentives than what is offered now could make it a non-starter.  More so, because of the terrible financial condition of state distribution utilities. The Tamil Nadu Electricity Board, for example, owes over Rs 1,000 crore to wind energy players. A senior official in the ministry of renewable energy agreed that the higher expense means that the government is unlikely to push the offshore case any time soon. “Given the condition of our distribution companies, we can’t expect them to pay such rates,” he said, requesting anonymity.

The focus for Ramesh Kymal, CMD of Spainbased Gamesa, is the immense potential onshore. Even if India’s wind energy potential is taken to be just 60,000 MW, a conservative estimate, only a fourth of that has been fulfilled. Also, Kymal said offshore wind needs clearances from 10 departments. “You have to deal with bureaucracy and red tapism. And evacuation is also going to be a key issue.” The likes of Gamesa,  Siemens, Vestas, Suzlon-owned REpower and Areva, all of whom have significant India presence, have driven offshore wind in global markets, particularly Europe.

Suzlon Energy CFO Robin Banerjee, however, seemed less sceptical about offshore wind in India, He said his company would be prepared to participate in offshore projects as and when they come up in India, but declined to discuss specifics.

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