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DPSC Says Wind Policy Uncertainty May Delay Expansion

According to reports,  DPSC Ltd. (DPSC), a Kolkata-based power producer that has gained 14 percent this year, may delay a plan to double wind power capacity because of uncertainty over when India will reinstate a subsidy for the industry.

The company, a unit of India Power Corporation Ltd., planned to add 100 megawatts of wind farms in the states of Andhra Pradesh, Maharashtra and Rajasthan.

“The policy certainty is definitely affecting expansion plans,” Rakesh Bhatia, DPSC’s head of renewable energy, said in a phone interview. “We wanted to start earlier.”

Installations in India, the world’s third-biggest market for wind turbines, plunged 42 percent in the year to March 31 to 1,700 megawatts after the government withdrew a tax break and generation-based subsidy for wind farms, according to data from the Indian Wind Turbine Manufacturers’ Association. Finance Minister Palaniappan Chidambaram pledged to reinstate the subsidy in February. The government has yet to do so.

DPSC, which also distributes electricity in West Bengal state, rose 2.3 percent to 20 rupees as of 11:31 a.m. in Mumbai trading today. The benchmark S&P BSE Sensex has climbed 1.3 percent this year.

The company has built 100 megawatts of installed wind projects that use turbines from Wind World (India) Ltd., formerly known as Enercon (India) Ltd. Wind World topped Suzlon Energy Ltd. (SUEL) to become India’s largest wind-turbine maker last year.

Bhatia said the company is evaluating larger machines from suppliers for future projects that can produce more power from slower wind speeds.

“Enercon has a limitation of 800-megawatt turbines,” Bhatia said. “The new trend is for higher capacity turbines.”

Inox Wind Ltd., the country’s fourth-largest supplier, said last week that 2 megawatt wind turbines are the maximum size that can be installed in India because of transportation issues and poor roads. Suzlon, Inox and Gamesa Corp. (GAM) Tecnologica SA are among those that have introduced such turbines for the local market.

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