According to reports, India is expected to have 89 gigawatts (GW) of installed wind power capacity by 2020 and attract $16.5 billion annual investment according to India’s Wind Energy Outlook 2012. This would hypothetically help prevent the emission of 131 million tonnes of carbon dioxide annually.
“Today we face a formidable challenge in meeting our energy needs and providing adequate and affordable energy to all sections of society in a sustainable manner,” said Farooq Abdullah, union minister for new and renewable energy while releasing the report.
India is the third largest annual wind power market in the world and provides business opportunities for both domestic and foreign investors. The country’s wind power sector experienced record annual growth in 2011 with the addition of more than 3 GW of new installations and $4.6 billion in investments.
With an energy demand-supply gap of 8%, peak shortages are at 11-12 % and grid access is not available to more than 55% of the rural population, maximising the potential of renewable energy sources, Abdullah said.
The minister said he had recommended to the finance ministry that the industry be given generation-based incentives from April 2013.
Renewable power represents about 12% of the total installed electricity generation capacity in India. Investment in renewable energy was $10.3 billion in 2011, up 52% from the previous year.
“India is not constrained by resources but lacks good policy incentives to support and give impetus to the wind energy sector,” said Steve Sawyer, secretary general, Global Wind Energy Council.
There has been a policy vacuum since the accelerated depreciation incentive has been scrapped while the generation-based incentive is yet to kick in, added Sawyer.
To fully exploit alternative energy sources, the Indian government needs to address several challenges and remove barriers holding back development, the report said. The key policy thrust areas should be a comprehensive renewable energy law, incentives for repowering or replacing older power plants with new ones, establishing clear long-term targets, rules for interconnection and forecasting, the report said.
One key concern is the lack of policy guidelines and incentives for repowering, the report said. Others include the disposal of old equipment, fragmented land ownership at existing wind farms, lack of clarity on the feed-in tariff offered to newly repowered projects and constraints on the evacuation of the extra power generated.
India’s potential for wind power development is higher than previously thought, going up to 400 GW if the potential of offshore wind power development and repowering are fully exploited, the report said.
More than 95% of the wind energy development to date is concentrated in just five states – Tamil Nadu, Gujarat, Maharashtra, Andhra Pradesh and Karnataka. Rajasthan is emerging as a state with a rising number of wind turbine installations, the report said.