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Promoting solar at expense of wind power is dangerous, says Gamesa MD

According to reports, the wind power industry in India has been bogged down primarily by policy issues, resulting in capacity additions falling to 1,700 MW in 2012-13 from 3,200 MW in 2011-12. Hopes went up after generation based incentives (GBI) were announced in the Budget 2013, but there has been no sign of implementation of the policies. Several wind turbines remain idle today as companies await guidelines. Too much emphasis on solar at the expense of wind will be very dangerous for the renewables industry, says Ramesh Kymal, managing director of Gamesa – one of India’s largest wind power companies, in a chat with TOI.

Last year has been bad for the wind industry. How is it going to be this year?

The GBI has not come and there has been a delay in financial closure (process of procuring funds for setting up the plant). That is a worry. The GBI was announced in February and that itself was late. Good wind season has already set in most places now but nothing has happened on GBI yet.What are the issues and what has been done to resolve them, especially in Tamil Nadu, India’s windiest state?

There is no solution. In Tamil Nadu, the problem is with power evacuation (transferring power from wind power plants on to the grid) due to insufficient grid infrastructure and introduction of transmission charges. We offered to build substations — ourselves, ReGen and Suzlon. I don’t know how far they progressed. We even gave a Rs 10 crore deposit but nothing happened. After waiting for a year, we just had to ask for a refund.

What will be the impact of Kudankulam on wind infrastructure ?

It will choke wind turbines in the southern region because you will have nuclear power taking up all the grid infrastructure and the wind power won’t be transmitted.

How do you see the weightage given to solar versus other forms like wind and biomass?

It is a very dangerous thing. People think that wind has matured. We still need subsidies. Solar is a long term thing. Yes, when prices of fossil fuels go up, solar might have grid parity but today without heavy subsidy it doesn’t have parity. All this talk about prices going down is not sustainable because this is not a result of technology but supply-demand. Prices like Rs 5.50 for solar won’t sustain.

They are also unnecessarily supporting solar at this stage when there hasn’t been any technological breakthrough. Solar requires much more subsidy. Wind requires about 50 paise subsidy which is a pittance compared to solar or other fuels.

So what next for the industry ?

We can expect to see consolidation. With a downturn like this, many companies will be shut down and it will be the marginal players who will get affected first. And this is bad news because we all employ a lot of people, not only in the factory but outside as well.

But Gamesa seems to be doing well…

The total market is between 1500 and 2000 MW and this is catered to by four players leaving roughly 500 MW for us. But this year, we already have orders worth 647 MW and about 400 MW for next year. Gamesa’s clients are all independent power producers (IPPs) who have private equity funding and our global support helps.

One comment

  1. Can you ask Gamesha to inform the following:

    a). What is the subsidy, Accelerated Depreciation benefits, tax savings etc amount every year all the wind companies (manufacturers, Developers, and Investors) claimed in the last 15 years from the MNRE or such state agencies, till today.

    b). What is the subsidy or Accelerated Depreciation is being claimed by Wind sector even today with calculations for 10 MW wind project as illustration to prove (with and without GBI) that Solar is getting heavily subsidised…

    Let the Government remove GBI, Acclerated Depreciation and other subsidies in states, for wind projects and provide only the Interest subsidy and let Gamesha provide the project calculations with a total project interest of 2% in rupee terms (i.e after interest subsidy), to know, which is cheaper i.e Solar PV or Wind….(including the internal transmission line costs)

    c). Biomass power projects are equity free due to Capital subsidy and also no tax payment due to Accelerated Depreciation, hence, all these subsidies and tax avoidance AD, must be removed, with immediate effect for Biomass, instead the interest subsidy must be promoted….

    d). Nuclear power plant is dangerous from Hazard point of view (spent fuel processing and nuclear waste disposal and heavy water leakages etc as happening in many government run plants) and also to be at the mercy of Fuel Supplier’s group to lose economic sovereignty of India apart from Self respect. Yes, grid will need strengthening, to create the future decomissioning risks and NO habitat will exist after the plant life / Decommissioning (pls learn from the huge costs and hazard risk or such challenges being faced during decommissioning in Germany and USA..)

    e). Let Gamesha also furnish the calculations for a Solar PV power project with 2% interest rate for the project (after interest subsidy on like to like basis with Wind), to understand their statement for the people of INDIA to decide….let these numbers be part of Policy making for the sake of sustainability aspect also…

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