Market overview – Wind Energy in India

published on 4th December 2020

With a total installed wind capacity of around 37,505 MW (as of 31.12.2019), India is the fourth largest country in the world after China, the USA, and Germany, measured by total wind installations. Wind energy has become one of the most important renewable energy sources for power generation in India and currently contributes at least 6-7 percent of the country's power generation mix. Since the Indian Prime Minister Narendra Modi declared the target of 175 GW of renewable energy by 2022, the wind power program has become even more important in this endeavor.

Development of wind energy in India

India has been dealing with the topic of wind energy since 1984. At that time, India was suffering from the oil crisis and was therefore looking for alternative solutions. The government of the time decided to attract private investors in particular with initial test projects. Therefore, from the very beginning, the focus was on the participation and promotion of private companies in the wind energy sector.

To keep the wind program on track, the department established the Department of Non-conventional Energy Sources (DNES) in 1982, which became a separate ministry in 1992 and was renamed the current Ministry of New and Renewable Energy in 2006. Also, the Nodel Agencies, the Field Research Institute of Tropical Meteorology, and the National Institute of Wind Energy and the National Institute for Wind Energy (NIWE) were established for the wind sector.

In recent years, the Indian states of Tamil Nadu, Maharashtra, Rajasthan, Gujarat, and Karnataka in particular have developed as pioneers in wind power.

After the success of the onshore wind energy program, the Indian government decided to promote the development of offshore wind energy in the country and to use the 7500 km long coastline. The MNRE aims to create a total of 30 GW of offshore wind energy capacity by 2030.

Currently, the NIWE is conducting various studies on offshore wind energy potential, which have evaluated the good potential for the coasts of Gujarat and Tamil Nadu so far.

Potential and market situation

India has currently (as of 31.12.2019) installed a total of 37,505 MW of wind energy capacity, with the states of Tamil Nadu, Gujarat, Maharashtra, Rajasthan, Karnataka, and Andhra Pradesh being the clear pioneers:

The total wind energy potential is estimated at 696,500 MW by NWIN studies:

To exploit this potential and to attract private investors in particular, the Indian government has created various fiscal and financial subsidies specifically for the wind energy sector, such as customs duty relief for certain components, excise tax exemption, exemption from special additional levies, income tax exemption for 10 years on profits for power generation, etc. The MNRE particularly supports the production of equipment for the development of the wind energy sector in India. Currently, the annual production capacity for domestic wind turbines is 10,000 MW with about 21 wind turbine manufacturers in the country.

Another focus of the Indian government since 2018 is the development and expansion of the wind-solar-hybrid market. The main goal is to create a framework for the promotion of large grid-connected wind-solar hybrid systems to use wind and solar resources efficiently and to gain more grid stability according to the National Wind-Solar Hybrid Policy published on May 14, 2018.

However, the further expansion of wind power is partly confronted with bureaucratic hurdles, as the allocation of land, in particular, has caused difficulties in recent years in this densely populated country with its complicated lease and land rights for entrepreneurs. The resources needed to meet the complex challenges are only available to the state to a limited extent, and private investors are therefore in great demand.

Trend

As in many other sectors, the trend for renewable energies is towards „Make-in-India”. To push „Make-in-India” further, Prime Minister Modi is currently even entering into direct talks with European wind turbine manufacturers. In these talks, Modi has also discussed the partly controversial possibility of filtering oxygen in the wind turbine generator and thereby subtracting water as a second and additional energy source.

However, India needs reforms, especially in the area of land acquisition, to significantly increase its attractiveness. Bureaucratic hurdles also continue to exist, although the „Digital India” program has already significantly reduced these hurdles.

It is particularly noticeable in the states of Tamil Nadu, Gujarat, Maharashtra, Rajasthan, Karnataka, and Andhra Pradesh that there is interest in expanding wind power potential. These states have significantly improved the business-friendliness of the administration in recent years and are thus taking big steps towards renewable and green energy in India.

Find out which marketing models work in India.

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