Industry Pulse: India Wind Targets Are Sensitive to Policy and Regulations
India is the world’s fourth-largest onshore wind market by installations, with 37.5 GW of capacity as of 2019. Technical potential at 120-metre hub height is a whopping 695 GW, according the National Institute of Wind Energy, and the government has set a wind capacity target of 60 GW by 2022 and 140 GW by 2030. Wind is already the second most competitive energy source on India’s grid.
However, project installation has been decelerating recently, with only 2.3 GW installed in 2019. That is around half of the 4.1 GW of volume installed in 2017, and reflects slow execution when held against the 12 GW of capacity awarded in central and state tenders since 2017.
The India wind sector and installations have been traditionally erratic in nature and highly sensitive to policy changes. After the introduction of central auctions which transformed the wind procurement mechanism in the country, the market entered a state of limbo. Infrastructure was not ready to facilitate the capacity auctioned via central auctions. And states – the traditional wind procurement channel in India – took an extremely reclusive approach to create new demand. This resulted in declining installations from 2018-2020.
The market continues to be a bag of juxtapositions towards 2022, MEC+ and GWEC’s latest report, “India wind outlook towards 2022: Looking beyond headwinds”, 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 key characteristics of the wind market today in India are: