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2 Secular Tailwinds for Wind Energy in India despite Bumps

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Wind Energy in India has faced problems in the recent past and growth has gone down as the federal government has Wind Energyreduced two main subsidies. The removal of accelerated depreciation and GBI was done to nudge wind power producers to look for market based alternatives for their wind farms. The Renewable Purchase Obligation (RPO) has been developed by the government, so that India increases its renewable energy share from 10% in 2015 to 15% by 2020. Though the REC market has fallen into problems because of non-compliance, the regulators are waking up to the problem and forcing industrial users and utilities to meet their obligations. The RPO obligation is a big tailwind for wind energy as it is the only large renewable energy source apart from solar power. Solar energy is still new compared to the maturity of the wind energy industry. While I expect solar power to overtake wind energy in the future, wind power should continue to lead in the next few years. The industry, supply chain, finance and manpower for the industry are established and can easily ramp up to meet the needs.

Read more about Wind Energy Companies in India.

The second big tailwind for wind energy is that its cost positioning vis a vis fossil fuel electricity is improving day by day. Wind energy prices have gone down as a huge oversupply in the wind energy market has driven down turbine costs. The Chinese producers such as Dongfang, Ming Yang are not only lowering the costs of turbines but also lowering the overall system costs by providing low vendor financing. Ming Yang has tied up with Reliance Power to develop large wind farms in India. On the other hand, the costs of fossil fuels such as coal and natural gas have gone up dramatically in India. Natural gas costs a ton and even coal prices are going up as India’s monopoly producer fails to up production. The rupee depreciation has negated the falling international prices of coal and Indonesia, Australia have compounded problems by imposing export duties.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

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