Date: 09/09/2022

Relevance: GS-3: Infrastructure: Energy, Ports, Roads, Airports, Railways etc., Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Key Phrases: Wind Energy in India, Offshore Wind energy potential, Challenges in Wind Energy, Investment in wind energy, Captive Wind energy plants

Context:

• As the government of India and its agencies are yet to make a move to exploit hitherto untapped offshore wind energy potential, Reliance Industries Ltd (RIL) is ready to set up a captive 5 MW offshore plant off the Gujarat coast.

Background:

• To execute the plan RIL’s subsidiary Reliance New Energy Ltd. has already tied up with a Danish green energy specialist company that is already working in offshore wind energy.
• With this move RIL plans to capture the entire value chain in renewable power — from manufacturing solar photovoltaics to wind turbines, to specialized software for solar power generators.
• Unfortunately such implementation and execution intensity is missing from the government, which has been setting increasingly ambitious targets for renewable energy but failed to address bottlenecks on the ground.

Estimating the potential of wind energy in India

• The National Institute of Solar Energy has assessed the country’s solar potential of about 748 GW assuming around 3 percent of wasteland area to be covered by solar PV modules.
• Also the National Institute of Wind Energy, estimates a total wind energy potential of 302 GW at a hub height of 100 meters above ground.
  • It is more than doubled to over 695 GW at a hub height of 120 meters.
  • Hub Height: height where the center of the wind turbine sits on top of the tower
• According to the Global Wind Energy Council India has a potential of 174 GW of offshore wind resources which is largely concentrated off the Gujarat and Tamil Nadu coasts.
  • Offshore wind energy has just got off the starting block as the government aims to invite tenders for a 4GW capacity this year.
• Onshore wind is also highly concentrated in Tamil Nadu, Gujarat, and Maharashtra with an installed onshore wind capacity of around 40.8 GW as of June 2022.

Challenges in installing wind energy capacity

• Land acquisition is not easy in the absence of a land acquisition law.
• Due to concentration of resource potential most of the current and future projects are sited around the Kanyakumari-Tirunelveli-Tuticorin belt and down the Palghat pass on the Tamil Nadu side.
• It has sent land costs soaring for power projects in wind energy making land cost the single biggest component of a wind energy project.
• The other bottleneck is evacuation of the power generated as most of India’s renewable installations are densely clustered around a few substations in Tamil Nadu and Gujarat which are used to evacuate the power.
  • Decades of under-investment in transmission and grid capacity has led to insufficient transmission and grid capacity thus many projects are canceled.
• Wind plants can impact local wildlife; birds have been killed by flying into spinning turbine blades.
  • Also, like all energy sources, wind projects can alter the habitat on which they are built.

Financing the projects is crucial

• Access to finance is not easy because Renewable projects are financed on the basis of payments to the output generation.
  • Therefore Centrally-backed projects with assured Power Purchasing Agreements (PPAs) get financed while independent and State-level projects find it difficult to raise funding.
• Delayed payments to the lenders by India’s chronically loss-making Discoms is another problem
  • According to an estimate by CRISIL, average receivables of renewable power producers stood at 180 days as of March 2022.
  • It is expected to reduce to 140 days by the end of the current fiscal as the central government is helping the discoms.
• Lack of investment and initiatives from the states has delayed the projects and led to underutilization of available potential.

Way forward

• States need to take concrete steps to augment the capacity of renewables.
  • States like Tamil Nadu and Gujarat, which have high solar and wind potential, need to treat it as a natural resource - like coal or oil.
• States with high potential need to adopt a ‘merchant producer’ mindset where renewable power is seen as a product and a revenue source.
• More Investments in grid and transmission capacity to wheel the power efficiently to where demand lies, can transform state economies.
• Lower the taxes
  • In India, the GST Law exempts electricity and power sales from GST.
  • In contrast, wind power generation companies cannot claim input tax credits when they pay GST to purchase goods and/or services for setting up the project.

Conclusion

• To sustain and increase growth in wind-based generation capacity, policymakers need to streamline the procedures to grant permits, including land allocation and grid connection projects.
• Therefore there is an immediate need to revisit the government policies in the wind power generation so that projects are installed with a preplanned, efficient and time bound manner in sync with the private players to maximize India's renewable energy potential.

Source: The Hindu BL

Mains Question:

Q. State the challenges before the wind energy sector of India and suggest measures to augment India’s wind energy capacity. Also write on current status of Onshore and Offshore wind energy capacity in India. (250 words).