Veluchamy, in his 40s, is wiry, bare-chested and engrossed in work, unmindful of the heat. He is busy making a channel for the water to flow to the tomato saplings he has planted on his small farm in Nallamudipatti, in Tamil Nadu's Theni district, about 90 minutes by road from Madurai.
He says he has three acres, on which he has planted tomatoes, cashew and cotton. The earth is dry and the soil looks parched. He is cutting a channel for water from a nearby well to flow and irrigate the saplings. He hopes the tomatoes will fetch him about Rs 25,000 when they are plucked.
Hardly a hundred metres from him, the giant blades of a wind turbine rotate with monotonous regularity – go near the turbine you can hear the soft “swoosh, swoosh” of the blades and see the shadows they cast on the fields. This is one of the 30 1.65-MW turbines that Vestas India has installed for CLP India, the Indian subsidiary of the Hong Kong-headquartered power generator CLP. CLP India, a leader in the independent power producer model for wind power, has more machines at nearby Kamachipuram, also installed by Vestas. The wind season is yet to start and the speeds are just about enough to get the blades rotating and generating electricity.
Ask Veluchamy if the wind turbines have not affected his farming, he hesitates, scratches his head and answers that they haven't. “That was what many feared, but it has not happened,” he adds. He is one of the many who have sold a part of their land for putting up wind turbines.
He points to the short cashew plants and the drumstick trees and says they are growing well, as if to substantiate his point. There are a few coconut trees too.
One of the criticisms against wind turbines is that they come up on fertile agricultural land, as farmers sell the land, attracted by the lumpsum money they get. Veluchamy says he sold only a part of his land to land aggregators, who were buying them up for wind turbine manufacturers.
In fact, land aggregation, especially for wind farms, is a lucrative proposition across the country with potential to put up wind farms. The more land a wind turbine manufacturer has, the better are its prospects of selling it to an investor – either individual companies or large independent power producers such as CLP India. Theni district alone has about 400 MW of wind turbines installed by manufacturers such as Vestas, Regen Powertech and Gamesa. This includes 99 MW by CLP India and the rest by various companies that have invested in wind power either for captive consumption or for the depreciation benefits that are available.
The wind power industry in the country has undergone a major transformation the last couple of years. Till recently, the industry was driven by energy-intensive industries investing in wind power for captive consumption or others that put in money for one or two turbines for the tax benefits they could get. Now, it is the large independent power producers (IPPs) that are driving the industry. CLP Power India Pvt Ltd, a subsidiary of CLP Holdings Ltd of Hong Kong; Acciona Wind Energy Pvt Ltd and Fersa, both of Spain; Tata Power, and Reliance Power are some of the companies that have invested in wind farms (see table). They sell power to the grid.
IPPs in wind power are not the only change that the sector has seen. Turbines sizes and capacities have increased. In the initial days, 250 kW machines were the order of the day. The towers were about 30 m tall – or as tall as a 10-storey building – and the rotor diameter 27 m. Now, 2.1 MW turbines are available in the market, and the towers are up to 100 m in height – almost as tall as a 35-storey building – while the diameter of the blades has increased to 82 m; as the industry puts it, megawatt-class machines are the order of the day. The swept area of the blades for the biggest turbine is a little over 6,000 sq m.
Global players are bringing in machines with higher capacities, but modified for the low-wind regime in India. There are many more international players in India and a few more are expected to enter the country. The industry itself is optimistic. It would have added about 2,200 MW in 2010-2011, the highest ever annual capacity addition, against 1,576 MW the previous year. More importantly, it expects the annual addition to be in the range of 3,000 MW for the next few years.
A lot of factors are behind this huge transformation. There is a growing realisation that renewable energy sources have an important role to play in meeting the energy needs of the country and mere dependence on fossil fuels will not be enough. Combined with this is the need to balance the energy basket, as electricity regulators in the States have mandated that green power be part of the portfolio.
As Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Energy Ltd, a leading turbine manufacturer, says, wind industry is growing faster because of the following factors: Energy-intensive companies invest in it to hedge their power cost; feed-in tariffs offered by regulators; independent power producers putting up wind farms of more than 50 MW in size; a renewable portfolio standard, under which regulators mandate a fixed percentage of the electricity sold to come from green sources; the renewable energy certificate, under which States that do not have renewable energy potential buying these certificates from those States where there is abundant potential; and, a generation based incentive (GBI) of 50 paise a kWh that is given by the Government of India.
“The incentives in the form of GBI and the market mechanism for REC will encourage overall growth,” says Mr Mahesh Makhija, Director – Renewables, CLP India.
The industry now expects the momentum to continue. Mr Tanti feels that the country would add about 3,000 MW a year for the next 10 years. Mr Ramesh Kymal, Managing Director, Gamesa Wind Turbines Pvt Ltd, the Indian subsidiary of the Spanish company Gamesa, says: “Going forward, I will not be surprised if the market goes beyond 5,000 MW a year.”
The biggest challenge, according to Mr Tanti, will be investment in the supporting grid infrastructure to evacuate the power, where States are lagging behind. At least in Tamil Nadu, turbine manufacturers (that are also developers for their clients), have found a way out. They put up the sub-stations connecting their turbines in the vicinity and from there the electricity is fed into the grid. Almost all companies such as Suzlon, Gamesa, and Regen Powertech, which recently commissioned a 230/33 kV sub-station in Coimbatore, the first of this size by any developer, have put up the sub-stations.
Another challenge for the industry is that the good wind sites are exhausted and only Class III sites, as the industry refers to them, or the low wind speed sites, are available. This means the tariffs have to be more attractive to bring in investments, according to Mr Makhija.
Mr D.V. Giri, Chairperson, Indian Wind Turbine Manufacturers' Association, and Managing Director, Pioneer Wincon, a turbine manufacturer, refers to the debate over whether accelerated depreciation benefits should continue or not in the wake of the GBI scheme being introduced. In his view, there is need for both as they address two different sets of investors in wind power. If the accelerated depreciation benefit were to be removed, it will immediately take away at least 1,000 MW from the market, he warns. Till a few years ago, more than a third of the turbines were put up for the tax benefits. Now, reckons Mr Makhija, that should be down to a half, with the balance being taken up by those who are in it for the business of generating and selling electricity. And, for them, increasing the GBI to at least Re 1 or Rs 1.18 a kWh will make the investment that much more attractive, says Mr Giri.
Despite the challenges, the wind industry powers on. It is no longer worried about whether wind power will ever be in the mainstream. The industry feels that the climate change debate has conclusively settled the issue in favour of Green power. The concerns are over how to scale up quickly.