Transition

More

Indian wind to add 3GW in 2018/19 as auctions kick in: ICRA

Ratings agency says wind sector installations to improve over next 12 months but solar set for reversal

India will add about 3GW of new wind power in the 2018/19 fiscal year as government auctions start to add renewed momentum to the sector after a difficult transition period – but solar installations are set to fall, financial ratings agency ICRA predicted.

The Indian wind industry installed only about 1.7GW in the 2017/18 FY, well down on the 5.5GW record additions seen a year earlier as the sector moved abruptly from a feed-in tariff-based to competitive procurement system. Indian industry figures tally wind additions by financial years rather than the calendar-year data more common globally.

Gurgaon-based ICRA, a unit of global ratings giant Moody’s, said in a report that projects awarded in tenders by the Solar Energy Corporation of India (SECI) – which runs government renewables auctions – and some state distributors will start to drive capacity commissioning over the next six-18 months.

SECI and state utilities in Gujarat, Maharashtra and Tamil Nadu have between them issued bids for 7.5GW over the last 14 months, said ICRA.

The Indian government plans to auction 20GW over the next two fiscal years as it chases its 60GW target for 2022, up from 34GW now.

Suzlon claims top spot as India adds 1.77GW in 2017/18 FY

Read more

“This bidding programme, if implemented in a timely manner, provides a visibility to support the capacity addition over next four-year period,” ICRA said.

But it warned that timely completion of power deals with SECI and state distributors is a key requirement, with the readiness of states to sign deals – especially those with limited wind potential – a “critical” factor.

The crunch in installations has hurt the 10GW-capacity wind power supply chain in India, which is eagerly awaiting an upturn in business prompted by the auctions, albeit for developers facing far tighter tariffs under the competitive system.

Siemens Gamesa – the largest foreign turbine OEM active the country for the last few years – today announced 140MW of new EPC deals from industrial power users, a customer base it said is growing in its Indian portfolio.

While ICRA is predicting an improvement in wind installations in 2018/19, it expects India’s solar sector to go the other way.

PV additions will fall by around 40% to 4-4.5GW in the year ending March 2019, due to “subdued” tendering since June 2017 on the back of higher module prices and policy uncertainty over anti-dumping duties, ICRA said.

Solar and wind between them are due to account for 160GW of India’s giant 175GW renewables target for 2022 set by the government of Prime Minister Narendra Modi.

The ambitious goal attracted further foreign investment interest this week with news of the formation of EverSource Capital, a joint venture between Indian finance group Everstone and Lightsource BP, the UK-based renewables developer backed by the global oil giant.

The Indian and UK governments will each commit £120m ($170m) to the venture, which will manage funds focused on green infrastructure in India.

Latest