India Wind Outlook Towards 2022: Looking beyond headwinds

Overview

The India Wind Outlook 2020 Looking beyond headwinds report published jointly by the Global Wind Energy Council (GWEC) and MEC Intelligence objectively analyses the factors which have led to a drag on market growth for India’s wind energy industry over the past two years, and provides an assessment on the forecast along with a pathway to overcome these challenges to realise the high potential of the market.

The report highlights key challenges that must be overcome to restore strong wind market growth in India, including grid and land availability, offtaker risks, stringent tender conditions, and low tariff caps.

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Key Findings

India’s wind energy capacity can only realistically reach 50 GW by 2022

Three scenarios for new wind installations in India until 2022 are highlighted in the report, ranging from 11-17 GW of installations depending on the extent and speed with which the government and industry are able to resolve these challenges.

Project installation has decelerated in recent years

India is the world’s fourth-largest onshore wind market by installations, with 37.5 GW of wind capacity as of 2019. However, project installation has decelerated in recent years with only 2.3 GW installed in 2019, nearly half of the 4.1 GW installed in 2017.

India is likely to fall short of its ambitious wind energy target for 2022

Efforts by the government to lower barriers around market design, grid infrastructure and land allocation must be intensified, in order to revive auction appetite and resolve the execution challenges facing India’s wind market and reach the country’s ambitious 175 GW renewable energy target by 2022, of which 60 GW is due to come from wind energy.

Current challenges are delaying awarded projects and risking new capacity

The report highlights key challenges that must be overcome to restore strong wind market growth in India, including: grid and land availability; off-taker risks; onerous tender conditions; and low tariff caps. Collectively, these challenges have led to the last three central wind tenders and all state wind tenders to be unsubscribed, retendered or even cancelled, while 80 per cent of awarded projects have been delayed by 6-12 months.

COVID-19 will cause further project development delays

The impact of COVID-19 will impose a drag on market growth in 2020 due to extended project timelines and supply chain disruptions, compounded by the grid and land challenges already impacting installations. This could delay delay around 0.7-1.1 GW in new volume to 2021 and also possible cancellation of some planned auctions.

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