The Indian Wind Industry Continues To Lobby For Non-competitive Practices

Wind Vs Solar in India

The Indian wind manufacturing industry has grown in a protected environment in which high feed-in tariffs paid by states allowed developers and wind turbine players to make abnormal profits for a long time. The high entry barriers in the form of a limited land parcel with high wind velocities and licensing of wind turbines by incumbent players further prevented competition in the sector.

This is quite a contrast when compared to the solar energy sector where there were no FITs and no strict licensing requirements for solar equipment. This allowed the costs of solar energy to fall much faster than wind energy. While these may not have benefited the manufacturers and developers of solar energy, they certainly helped the Indian consumers through much lower costs of energy.

The Indian wind industry has been crying for some time now due to a painful transition from a protected industry to a competition based one. Reverse auctions in which developers win orders based on the bids have led to a sharp fall in tariffs with the recent tariff falling substantially below INR 3/kWh. This has led to a lot of angst in the industry. While there have been reports that this may not be viable and be a one-off thing due to inventory clearance, the fact remains that wind industry can no longer be protected. Though the wind industry doyens continue to propagate uncompetitive practices like no online bidding (in favor of closed auctions), they should realize that the old times are gone now and focus on the changed structure. Fear mongering that the large manufacturing industry will close and jobs will be lost will no longer work.

The wind industry is now competing with solar energy which is reducing costs at a much more rapid pace. Wind industry needs to invest more in reducing costs and improving technology rather than crying over the competition. A buyer will no longer buy electricity at INR 4/kWh from wind industry when he can get it for INR 3/kWh or below from solar energy. At the end of the day, it is electrons whether it is generated from wind or solar. If India wants to meet its 60 GW target, wind industry needs to keep its cost low and keep making it lower.