Tapping the Wind – India


February 2005

For the impoverished people of Muppandal, lacking the electrical power needed to work their way out of poverty, the answer may be blowing in the wind. The local people are thanking Varuna, the Hindu God of the wind, for blowing unexpected good fortune their way. However, the Indian government has financed their good fortune with tax breaks for foreign firms looking to establish fields of wind turbines in the southern region of India. The turbines not only produce a renewable and environmentally friendly source of electricity, they also spawn investment in the local community, which has raised incomes on a wider scale.

Power in India

The reform and restructuring programme launched in 1991 led to a sustained revival of economic growth in India. Inadequate infrastructure, however, and especially the shortage of power have emerged as major constraints to growth. India has moved from being surplus in power in the 1950s and 60s to a situation of shortage since the mid 70s, and has been experiencing severe energy shortages. The fact that industry in India has been burdened with poor supply quality and increasing shortages of power has meant a large number of industries are forced to rely increasingly on captive power (electricity generation from a unit set up by the industry for its exclusive consumption).

A number of steps have been taken to bridge the gap between electricity demand and supply. Some of these options are the renovation, modernisation and upgrading of old plants. These initiatives include upgrading generation capacities, increasing the plants’ ability to achieve optimal inter-regional power exchanges, demand-side management and energy conservation.

To bridge the gap between the rapidly growing demand for electricity and the available supply, it is necessary to mobilise additional resources for capacity addition in power generation and distribution. Therefore, a policy to encourage greater investment by the private sector was formulated in 1991 along with the reform and restructuring programme. Private sector participation is expected to bring increased efficiency in the operations of the power sector.

The primary sources of energy available in India are coal, oil, natural gas, hydro and nuclear power. However, India is relatively poorly endowed in terms of commercial energy resources, with 6 per cent of the world’s coal reserves, 0.59 per cent of oil, and 0.59 per cent of natural gas. India is relatively rich in terms of coal and hydropower, but their exploitation is constrained by factors such as the poor quality of coal, environmental concerns, interstate water disputes (in the case of hydropower), and the lack of financial resources. Persistent shortages of coal and power during the recent past have led to substantial increases in the consumption of petroleum products. This can be attributed to the relative ease of importing oil and other petroleum products. Natural gas is a relatively new entrant in India’s energy sector and could make a significant contribution as a source of fuel and feedstock in a number of consuming sectors.

The worsening power situation and the various environmental problems of large-scale power generation have led to increased appreciation of the potential of electricity generation from non-conventional sources. The importance of renewables in contributing to the supply of power in a sustainable manner was recognised as far back as 1974, when the Fuel Policy Committee Report suggested that ‘non-conventional energy sources, namely solar, geo-thermal and tidal energy should be developed, with priority assigned to solar energy and biogas’. Of the various forms of renewable sources of energy, solar and wind energy are found to be ideally suited for India. The 8th National Five Year Plan (1992-97) has targeted a capacity addition of 1900 MW through renewable technologies, and these have established a niche for themselves in power planning in India.

Wind Power

© Peter Crawford/ITDG
© Peter Crawford/ITDG

The Government of India initially gave impetus to grid quality power generation by wind turbine technology in the 7th National Five Year Plan (NFYP), which ran from 1985 to 1990. Since then, wind power generation has gained a good response from industries, entrepreneurs and businessmen. By the start of the 8th NFYP, grid quality wind power generation became the thrust of India’s Ministry of Non-conventional Energy Services (MNES). MNES has formulated a series of policy incentives and fiscal incentives that have been successful in the development of the wind power sector. On top of this policy, individual state governments have declared supplementary incentives. This total package of incentives has created an attractive investment climate, which has spawned a surge of investment in the sector. In 2003, India stood fifth in the world wind energy rankings, with over 1700 MW of installed capacity. Much of the installed capacity is in the states of Tamil Nadu (61 per cent), Gujarat (14 per cent), Maharahtra (12 per cent), and Andhra Pradesh (7 per cent). The private sector has dominated investment (97 per cent) in these regions.

Harnessing the Power

The use of wind as a source of renewable energy involves conversion of the power contained in masses of moving air into rotating shaft power. The conversion process uses aerodynamic forces (lift and/or drag) to produce a net positive turning moment on a shaft, resulting in the production of mechanical power which can be converted to electrical power.

The amount of wind power (P), in Watts, that can be harnessed at a particular site can be expressed as: P = ½ r A V³ h.

r = Air density, kg/m³.
A = Swept area of the blades through which the wind blows, in m².
V = Wind speed, in m/s.
h = Efficiency of conversion (< 40%).

The wind speed therefore plays a vital role for energy generation, as there is a non-linear relationship between wind speed and available power.

The energy content in wind at different locations varies with latitude, land–sea disposition, altitude, and season. In India, the factor that mostly governs the availability of wind energy at a particular site is its geographical location with respect to the monsoon wind. A balance must be achieved between excessive, potentially damaging winds, and soft, unproductive winds. The availability of data on wind speed is a basic requirement for determining the feasibility of wind power generation at any site. Due to the highly uneven distribution of wind speed over the country, an assessment of the wind resource must be undertaken before any plans of harnessing the wind energy are drawn for implementation.

The private sector investment that has driven the growth of the wind power generation sector in India has not been spontaneous. The policy incentives offered by MNES to keep investment competitive include tax breaks, lower import duties on equipment, and cheap loans.

Why are subsidies necessary?

In short, wind power is commercially less viable than conventional power options, despite being socially and environmentally more desirable. Compared to conventional power, where the variable costs are very high, wind power has a higher share of capital investment. Hence high interest rates discriminate against wind power. In financial terms, wind power would be a slightly more expensive source of power than other conventional and ‘green options’. Additionally, the uncertainty of wind resources and insufficient data impose risks on the investor. Total power generation in any year depends on the prevailing wind speeds, a factor which is beyond the control of any investor. Despite having a short gestation period, wind power projects have long payback periods compared to conventional power, which again imposes a risk on the investor.

Consequently some form of subsidy of wind power is needed to reflect the social benefits of this ‘clean’ and renewable resource and its ability to shorten the demand supply gap if more rapid development is to be encouraged.

Muppandal Wind Farm, Tamil Nadu

The state of Tamil Nadu is ahead of all other states in terms of installed capacity. The state has experienced a very good and speedy response from the private sector ever since the emergence of wind power in the country. The state has an installed capacity of 530 MW, of which about 511 MW is in the private sector. The state is blessed with some of the most windy sites in the country, which has been the main cause of the rapid development.

Wind farms have sprung up all along the 19-mile road from Muppandal to Kanyakumari, a town wedged between the Bay of Bengal, the Arabian Sea and the Indian Ocean. Muppandal and other areas in Tamil Nadu generate about half of India’s 2000 MW of wind energy, which is itself about 2 per cent of India’s total power output. The government expects the sector to expand rapidly and pass its target of adding 5000 MW of wind energy by 2012.

With an aggregate wind power capacity of 540 MW, therefore, the Muppandal region has the distinction of having one of the largest concentrations of wind turbines at a single location. This renewable source of energy has brought about Rs.2800 worth of investment to the region, through private firms such as Vestas Wind Systems. Investment on this scale is unprecedented in the region, and presents a large employment opportunity for its youth. The developments in the region are an example of renewable energy having brought prosperity to an otherwise barren area.

Vestas Wind Systems

With more than 26,000 wind turbines generating electricity around the globe, Vestas is the world’s largest supplier of wind power systems. Backed by a quarter of a century of experience and innovation, Vestas turbines are renowned for high efficiency and well-proven reliability. Vestas also recognises that well thought-through planning and dedicated operation and maintenance are equally essential to project success. Vestas covers everything from site studies to service and maintenance, to ensure that the wind turbines operate as efficiently as possible. The company also offers advice regarding regulations, permits and financial requirements in the area.

In 1998 Vestas entered into a joint agreement in India, known as Vestas RRB India Ltd, for a 15 MW wind power plant consisting of 30 units of Vestas 500 kW wind turbines. The turbines were installed in Tamil Nadu for the Indian company, Mohan Breweries and Distilleries, in Chennai. The wind power plant was built, commissioned and then handed over to the local owners. The project is the largest in India using the 500 kW Vestas turbine technology, and produces over 30 million kWh annually.

‘In Tamil Nadu, we have cuts in the power and therefore each industrialist owns a diesel set and as the price of diesel increases, then wind power becomes more and more attractive…. Of the entire wind installations in Tamil Nadu, 95 per cent are privately owned and only 5 per cent, even less than 5 per cent, is owned by the government’.
Vestas representative

The Muppandal wind farm has added to the environmental benefits of wind-powered electricity generation with the creation of wealth in a remote, backward region of the country. Wind power development has benefited landowners, who had no means to cultivate their otherwise barren land. Ample employment opportunities have been created in the manufacture, operation and maintenance of wind turbines. The Muppandal experience has proved that wind technologies can deliver not only much-needed electricity, but also employment to a large number of people, and pave the way for economic prosperity.

‘In 10 years, my daily income has gone up to Rs.450 ($10) from 45 rupees…. It’s all because of the windmills.’
Koilpillai Gopal, Barber

At a rice processing plant in Tamil Nadu, Rs.10,000-12,000 (US$230-275) worth of diesel fuel was being used every day. With the availability of a reliable supply of wind-generated power, the plant shifting its power source to save thousands of US dollars a year.

‘Diesel has gone up gradually, and now it’s around Rs.28 a litre…Rural electricity used to be unreliable, but now that’s changed.’
Employee at the rice mill

Further Information

References

Rajsekhar, B. and Van Hulle, F. (2001). ‘Scope and prospects of re-engineering and retrofitting windfarms in India’. Proceedings of the European Wind Energy Conference, Copenhagen 2-9 July 2001. Energy Research Centre of the Netherlands.

Sridharan, K.S. Insititutional Building for Renewable Energy Development: Experience of IREDA. Delhi: Indian Renewable Energy Development Agency

Narain, A., Suresh, R., Prasad, N.S., Venkata Ramana, P., Ahluwalia, S., Narayana, P. and Gujarati, P.M. (1997). Economics of Windpower: Impact of Fiscal Incentives. Delhi: Tata Energy Research Institute and Operations Research Group.

Participating Organisations

Indian Renewable Energy Development Agency (IREDA) www.ireda.gov.in

Ministry of Non-Conventional Energy Sources www.ireda.gov.in

Vestas RRB India www.rrbenergy.com
Donor and Supporting Organisations

Department for International Development (DFID) www.dfid.gov.uk

USAID www.usaid.gov

World Bank www.worldbank.org

Resources

ITDG Technical Briefs answers.practicalaction.org

Relevant Hands On case studies

It’s a Gas: Winds of Change – Sri Lanka