Home » CleanTech/ Renewable Energy » Green Infra to Ditch Supplier-Led India Wind Farm Model

Green Infra to Ditch Supplier-Led India Wind Farm Model

According to reports, Green Infra Ltd., backed by IDFC Private Equity, will start developing wind farms from scratch next year, ditching a business model in India that favors dominant turbine supplier Suzlon Energy Ltd. (SUEL) over competitors such as General Electric Co. (GE)

The New Delhi-based developer seeks to bring down project costs by acquiring land and clearances for new projects, tasks traditionally handled by the turbine supplier in India, Chief Operating Officer Sunil Jain said.

“From 2013, we’ll start doing this ourselves,” Jain said in a phone interview yesterday.

Green Infra joins independent wind farm developers such as Greenko Group Plc (GKO) and Mytrah Energy Ltd. (MYT) in separating project development from turbine orders to drive better deals from suppliers. A global supply glut has driven down the price of wind turbines by 23 percent since 2009, squeezing turbine makers’ margins and intensifying competition for orders in India, the world’s third-biggest wind market, according to data compiled by Bloomberg.

Unlike most markets, suppliers in India tend to hand over completed wind farms to owners and investors, negotiating deals that include project development costs as well as turbines.

That model has benefited manufacturers such as Suzlon, Spain’s Gamesa Corp. Tecnologica SA (GAM) and Denmark’s Vestas Wind Systems A/S (VWS), which grabbed 54 percent of Indian installations last year, according to data from the Indian Wind Manufacturers Association. In contrast, GE and Siemens AG (SIE), who do turbine-only deals, didn’t install any machines in the country.

Turbine suppliers in India are quoting prices of about 63.5 million rupees ($1.2 million) per megawatt, Jain said. They’ve refused to lower prices despite a turbine oversupply, citing escalating project development costs, he said.

By handling its own project development, Green Infra will consider a broader range of suppliers, including GE and potentially Chinese manufacturers such as Sinovel Wind Group Co. (601558) and China Ming Yang Wind Power Group (MY) if they’re able to get their machines approved by regulators, Jain said.

“We don’t believe suppliers have the right approach,” Greenko President Mahesh Kolli said in an interview last month. Greenko signed a deal with GE to buy at least 450 megawatts of turbines over the next three years. That contract will supply machines that are 20 percent more efficient than the average available in the market for the same price, Kolli said.

Comments are closed.

Scroll To Top