India Announces Tax Incentives For Wind Turbine Equipment
Of late the solar power sector in India has enjoyed bulk of the attention from Indian policymakers looking to make the 100 GW by 2022 installed capacity target a reality. However, the wind energy sector also now has something to cheer about.
The central government has announced that wind turbine equipment will not attract central excise duty. This tax is to be paid for the manufacture and sales of products. The equipment exempt from excise duty include towers, nacelles, rotors, blades, and wind turbine controllers.
The exemption will benefit a large number of wind turbine manufacturers active in India. Some of the leading manufacturers include Gamesa India, Suzlon Energy, Inox Wind, and Vestas.
India plans to have an installed wind energy capacity of 60 GW by March 2022. At the end of August 2015, just over 24 GW of wind energy capacity was operational in India.
The country also recently announced a national offshore wind energy policy under which auction for project sites would take place early next year. Suzlon Energy is believed to be the only Indian manufacturer with some experience with offshore wind turbines, meaning that the Indian Government would like foreign manufacturers such as Gamesa, Vestas, and Siemens to expand and set up manufacturing facilities in India — thus the exemption.
At this year’s international renewable energy investors summit, organised by the Ministry of New & Renewable Energy (MNRE) in February, developers pledged to set up almost 48 GW of wind energy capacity over the next 5-7 years. Eight wind turbine manufacturers also pledged to manufacture over 36 GW of wind turbines during the same period. Suzlon Energy targets production of 11 GW, Gamesa 7.5 GW, and Inox Wind 5 GW.
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So far, the Indian government has managed with some skill the balance between supporting domestic production in wind and solar, and accessing best-value foreign technology through trade. Brazil please take note. One key feature is that the policy is clearly focussed on where the factories are, not who owns them. It’s not a subsidy to favoured Indian businesses.
Based on the current scenario, I don’t see Onshore wind in India keeping up with Solar. Not only is India poor in terms of wind resources, most of the suitable wind zones already house wind farms.
Offshore is most likely to see a major interest and boom but considering how strong a grip Siemens has on that (and apparently they dont have manufacturing set up yet), I am not sure how much the relaxation in excise duty will help.
http://dupontconsulting.files.wordpress.com/2012/01/3tier_5km_global_wind_speed.jpg
India’s wind speeds are average, and pretty good in swathes of the eastern coast. Large parts of Europe have a comparable wind regime and yet generate a significant share of their power from wind.
And that’s just an old 80m hub height map. Go higher (towards 120m) and even ‘poor’ areas become surprisingly windy.
Also, Siemens does not have a grip on the offshore industry. Vestas is almost as big, and Senvion, Adwen and Alstom aren’t doing badly either. Even some Chinese manufacturers have dipped their toes in the offshore market.
I also keep seeing new models being announced by the manufacturers designed for low wind speed sites. Taller towers, longer blades, and slightly higher output sometimes.
Better gears, lighter composite materials for constructions.
The Wind resource in India at 80m or 100m barely goes above class 4 in almost any area. The map below is for 80m hub height and it gives a more accurate picture. Compared to the size and energy demand of the country, scattered areas of class 2 and 3 zones aren’t exactly wind rich.
I came across a market report for offshore wind and as per the European Wind Energy Association, Siemens had 86% market share in 2014. Vestas had 9%.
http://www.ewea.org/fileadmin/files/library/publications/statistics/EWEA-European-Offshore-Statistics-2014.pdf
Best to generate a wind map at 120 metes and 140 meters before saying that onshore wind resources are poor.
Here’s a set of US wind maps at 80, 110 and 140 meters. Look at how much wind is found at 140 meters in the Southeast of the US. Look at the resources outside the “windy center”.
Thanks Bob.
unfortunately we don’t have any studies for hub height of 120 m that I am aware of. I have shared 80m and 100m (earlier on a different thread) And based on that, its not wind rich, at least compared to USA
apart from that, the highly cyclical nature of wind in India (more than 60% concentrated in 4 monsoon months) makes it a less than ideal for meeting energy requirements.
Seems like generating a 140 meter map would be extremely important. Using taller towers would be very much cheaper than installing offshore, then transmitting that electricity long distances. To say nothing of being much faster to implement.
Mexico is now building 140 meter towers with concrete tower sections poured on site. That eliminates the problem of moving very large metal tower sections on roads which are often not wide enough or strong enough to bear the weight.
Having a lot of wind when the monsoon is blocking solar would be a good thing. Plus at this point in time we don’t know what seasonal differences might or might not be found at 140 meters.
Gathering wind speed data is weather balloon work, is it not? Perhaps India should fund a few dozen weather balloon sites around the country and gather higher altitude data ASAP.
Thats a fair point. With newer technology, it is atleast worth exploring the same.
There is a reason why solar has hogged all the news headlines in India this year as well. Very few projects have been initiated in wind this year although I cannot claim to know the reason for the same.
Moreover, currently wind in India is not a very transparent sector. In solar, there are (for the most part) fair auctions and there is clarity on timelines. Unfortunately for wind, being the older industry of the two, this was never the case and still isn’t. Wind farms are arbitrarily decided by developers with no proper auction process. Tariffs are decided based on the wind policy of the state and the wind zone classification. Because there is no transparency, there is a lot of less-than-desirable elements involved from all the parties involved (politicians, bureaucrats, developers).
Buddy, there something called as technological advancement, which can surely help in catching winds at different altitudes or may be different velocity as well.
Things are changing faster than we can say BLINK OF AN EYE.
I don’t disagree with what you said.
Just stated what I see(indirectly) in the sector.