Procuring wind energy through bids a positive for sector:ICRA

My View:

With the procurement of wind power through auction route will help the developer to get the offtakers.

The proper implementation of UDAY will help to get the timely payment from the DISCOM to wind developers.

If the auction goes well,it will help to achieve the target of wind power of 60 GW by 2022.



News:

The scheme for procurement of wind energy through auction is a positive for the sector but receivables (payment delays by discoms) remain an area of concern, says ICRA.

"In ICRA s view, continuing delays in the payments by the state-owned distribution utilities (discoms) in key states such as Maharashtra and Rajasthan pose a challenge for the wind energy sector, although some improvement has been seen lately," ICRA said in a statement.

On the positive side, however, ICRA believes that the MNRE scheme for procurement of 1 GW through the auction route would facilitate the offtake for wind energy players, it added.

ICRA Ratings Senior VP Sabyasachi Majumdar, said in the statement, "While there has been some improvement in payment pattern by utilities in Rajasthan, with the implementation of UDAY (Ujwal Discom Assurance Yojana) as well as by the utility in Maharashtra in the last three month, a build-up in receivable position is seen, which varies from 8 to 12 months as on November 2016 and thus remains quite significant.

In addition to payment delays by state utilities, wind energy projects remain vulnerable to the risk of non-signing of power purchase agreements (PPAs) by the utilities as seen in Maharashtra and forced back down by utilities in Rajasthan and Tamil Nadu."

Further, implementation of forecasting and scheduling framework, as approved by State Electricity Regulatory Commission (SERC) in Karnataka and in other states where draft regulations are in place, poses regulatory challenges for the sector, given the variable and intermittent nature of wind power generation and limited experience available with IPPs in forecasting and scheduling as of now, the statement said.

Also, the sector continues to face challenges due to the limited compliance of renewable purchase obligation (RPO) norms by the obligated entities as well as the variance in RPO norms across the states, it added.

Notwithstanding these near-term challenges, the long-term demand potential for wind power remains strong, given the large untapped potential, fairly attractive feed-in tariffs and relatively lower execution risks.

ICRA notes that the incremental wind-based energy capacity requirement by FY2022 is estimated at about 46 GW as against the current installed capacity of 28.1 GW.

This is assuming annual energy demand growth of 6 per cent, non-solar RPO at 12.5 per cent by FY2022 and wind as a renewable energy (RE) resource contributing to a dominant share (75%) in meeting the non-solar RPO requirement on an all India basis, it said.

"ICRA further favourably notes that the scheme for award of 1 GW through the auction route by the Ministry of New and Renewable Energy (MNRE) would facilitate the consumption of wind-based generation by distribution utilities in states with limited wind energy resources.

"This, apart from reducing the offtake risks for wind energy players, would enable the distribution utilities in such states to honour their non-solar RPO requirement to some extent , Majumdar added.

Inox bags repeat order for 40 MW project in Gujarat

My View:

Inox Wind is continuously getting projects which are helping the books of company. RDPL is investing huge in renewable energy. The big firms in India should take lessons from such firm. 

As on 30 Sep 2016,the installed capacity of wind power plant is about 28 GW.

News:

Noida based Inox Wind Limited has won a repeat order for 40 MW wind power project in Gujarat.

Inox will execute the project on turnkey basis for Roha Dyechem Private Limited, a manufacturers of natural and synthetic colours, and the project is scheduled to be commissioned by March 2017.

The 40 MW project from Roha is part of the 350 MW of orders announced by lnox Wind on 3rd October 2016, according to an Inox release.

As part of the order Inox will install 20 units of it's 2 MW-113 meter rotor diameter turbine. The wind turbine manufacturer will provide end to end solutions from development and construction to commissioning and providing long term operations and maintenance services, the media release added.

"We are pleased to further build on the success of lnox's 2 MW platform in India." said Kailash Tarachandani, Chief Executive Officer of lnox Wind Limited in his statement.

RDPL has diversified its activities in Renewable Energy, as one of the emerging sectors of its business in the years to come. RDPL has already successfully invested in an aggregate of 52.5 MW of Solar Energy and 13.5 MW in Wind Energy and further plans to reach a combined milestone of 500 MW at various locations.

Wind turbines firm Senvion says big merger deal not in prospect

German wind turbines maker Senvion is not expecting to be part of any large-scale consolidation within the industry, preferring to focus on internal growth and possibly some further small acquisitions, its chief executive said on Wednesday.

Some 84 percent of Senvion's sales come from onshore wind turbines. It is also the world's third-largest maker of offshore wind turbines, behind Siemens and MHI Vestas, a joint venture between Japan's Mitsubishi Heavy Industries and Denmark's Vestas.

Aiming to cut costs by increasing global scale, Senvion's local rival Nordex earlier this year took over the wind turbines business of Spain's Acciona, while Siemens and Gamesa are forging the industry's largest player.

"Big tie-ups need to pay off. At the moment, I don't see any product offering that would cause us to take such a step," Juergen Geissinger, Senvion's chief executive since last December, told Reuters at a wind power industry conference.

"Smaller acquisitions, like the one we recently did in India, are always on our mind though."

Senvion, which listed its shares in March, last month announced the purchase of the Indian wind power business Kenersys India Private Ltd, including a production facility of about 250 megawatts (MW), to take it into one of the industry's most promising markets.

"The Indian market has an annual volume of 4-5 gigawatts (GW). That makes it bigger than Germany," said Geissinger, who was chief executive of German car parts maker Schaeffler until 2013.

He said Senvion also hoped to benefit from an expected surge in orders in the United States in the fourth quarter, as wind farm developers seek to take advantage of key tax credits before they are phased out next year.

Senvion already has 1 GW of installed capacity in the United States but no local production. "Whether we will set up local production obviously depends on order backlog. That starts to make sense from about 1 GW."

Geissinger also reaffirmed Senvion's forecast for sales this year of 2.25-2.3 billion euros ($2.52-2.57 billion) and an adjusted margin on earnings before interest, tax, depreciation and amortisation of about 9.5 percent.


My View:
Senvion being one of the top company in wind sector. They are not planning now to be more agressive in acquisition. I think they are learning from big firm like sunedision which failed miserably. Wind segment in India is now at backfoot as the new story is now solar. However still in renewable energy in India,the wind power sttill holds first place.

India announces Repowering Policy for wind energy projects

In a bid to infuse a new lease of life in India's wind energy sector, the Narendra Modi government today announced a new policy for repowering of wind power projects. The policy has the potential to turn around a bulk of the 27,000 Megawatt of the existing installed wind generation capacity in the country.



Repowering refers to replacing ageing wind turbines with more powerful and modern units in order to raise electricity generation levels at the refurbished wind sites. The process involves replacing old machines with fewer, larger and taller modern units which are quiter, more reliable and can produce more electricity.

The objective of the Repowering policy is to promote optimum utilization of wind energy resources by creating a facilitative framework, the Ministry of New and Renewable Energy (MNRE) said in a statement. India had started harnessing wind power around 1990 and the present installed capacity of over 27,000 Mw is fourth largest in the world after China, USA and Germany.

Most of the wind-turbines installed up to the year 2000 are of capacity below 500 Kilowatt (kW) and are at sites having high wind energy potential. It is estimated that over 3,000 Mw capacity installations are from wind turbines of around 500 kW or below. Repowering is required to optimally utilise the wind energy resources.

"Initially wind turbine generators of capacity 1 MW and below would be eligible for repowering under the policy. Based on the experience, MNRE can extend the repowering policy to other projects also," the ministry said.

As part of the Repowering policy, Indian Renewable Energy Development Agency (IREDA) will provide an additional interest rate rebate of 0.25 per cent over and above the interest rate rebates available to the new wind projects being financed by IREDA. Also, all existing fiscal and financial benefits available to the new wind projects will be available to the repowering project as per applicable conditions.

The repowering projects would be implemented through the respective State Nodal Agency or Organisation involved in the promotion of wind energy in the state. Under the policy, state transmission utility will provide augmentation of transmission system from pooling station onwards.

In cases where power is being procured by state discoms through PPA, the power generated corresponding to average of last three years' generation prior to repowering would continue to be procured on the terms of PPA in-force and remaining additional generation would either be purchased by Discoms at Feed-in-Tariff applicable in the state at the time of commissioning of the repowering project and allowed for third party sale.

States will also facilitate acquiring additional footprint required for higher capacity turbines. A wind farm or turbine undergoing repowering would be exempted from not honouring the PPA for the non-availability of generation during the period of execution of repowering. Similarly, in case of repowering by captive users, they will be allowed to purchase power from grid during the period of execution of repowering on payment of charges as determined by the regulator.

The ministry also clarified that no additional financial liability will be met by MNRE for implementing the Repowering Policy. The repowering projects may avail Accelerated Depreciation benefit or Generation Based Incentive (GBI) as per the conditions applicable to new wind power projects. Also, the policy would be reviewed by the Government as and when required.



Expert Comment:


It's been a long time for wind power in light of the nation. The wind power sector had faced so many tides; by adding huge amount of installed capacity from late 90's to early 2000's,then degradation after 2009 then again some rise. The repowering is one of the area which will help India to grow at faster pace in wind segment. Hope it will help to increase the CUF of old wind power plants.