August 2020

India’s wind power market is evolving fast amidst the chaos and confusion of the ongoing Covid pandemic. The short-term impact has been a slowdown in wind power capacity additions. Wind power additions stood at a mere 324 MW in the first half of 2020, a significant decline from the 1.2 GW of capacity added in the first half of 2019. A large part of this can be attributed to lockdown measures, transport restrictions and supply chain disruptions brought upon by Covid, as well as transmission-related hurdles.

From a medium to long-term perspective however, there are several positive signs. The latest round-the-clock and hybrid renewable energy tenders have witnessed a substantial response. Wind power plays a vital role in such projects due to its generation profile.

The ongoing localisation drive, which has led to an increase in project and equipment prices across many sectors, has had a minimal impact on wind power project costs. The wind supply chain is already localised in India to the extent of 80-85 per cent by value, and the components being imported are limited largely to castings and power electronics.

Further, the wind supply chain is gearing up to increase its competitiveness in India. Wind OEMs such as Siemens Gamesa, Nordex, Inox and Suzlon have already announced or launched over 3 MW of platforms for the country. The increasing competitiveness for wind can unlock a larger pipeline and reinvigorate interest among developers and offtakers.

Despite these encouraging developments, the wind power segment may take some time to return to its normal growth levels. The ongoing fiscal certainly does not look promising and if the transmission and offtake-related issues are not resolved soon, growth in 2021-22 may not be able to recoup the lost opportunity in 2020-21.

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