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Indian Wind Developments Threatened by Weakening Rupee, CLP Says

According to reports, India’s weakening rupee threatens to make wind projects unviable because it’s pushing up the cost of imported components, according to CLP Holdings Ltd., the largest developer of wind farms in the South Asian nation.

“If the rupee isn’t reined in, there’ll be a lot of difficulty putting together viable projects,” Mahesh Makhija, director of renewables at CLP’s Indian unit, said in an interview in Mumbai.

The currency has slid 8.7 percent this quarter, the worst performance among Asian currencies, adding to the woes of the third-largest wind market where installations are forecast to drop more than 30 percent this year. In response to higher import costs, turbine suppliers have had to raise prices by 2 percent to 3 percent in the last few months, Makhija said.

Growth is set to stall in India, a major turbine market for suppliers like Suzlon Energy Ltd. (SUEL) and Gamesa Corp. Tecnologica (GAM) SA, after the government ended two wind-industry incentives at the end of March. Installations this year could plunge by as much as a third to 2,000 megawatts if the incentives aren’t reinstated, according to estimates by Bloomberg New Energy Finance and CLP.

CLP, Hong Kong’s biggest electricity supplier with power assets across Asia, is focusing new investments in India on renewable projects after experiencing fuel shortages at its coal and gas-fired plants.

Meanwhile, CLP plans its first solar investment in India by the end of the year. The company will build a 15 megawatt photovoltaic plant at the site of one of its existing coal or gas power stations. The project will most likely use thin-film panels though a supplier hasn’t been selected yet, Makhija said.

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