By Anjali Lathigara, Lead Market Intelligence, APAC Region, GWEC
India’s history of onshore wind market development dates back to 1986. Since 2014, it has been maturing through public-private sector investments, a climate-friendly political vision, favourable policy and regulatory frameworks, and the indigenous wind turbine generator (WTG) manufacturing industry. Today, India’s well-established wind manufacturing industry plays a crucial role in determining the pace of the energy transition in the Asia-Pacific region, Europe and the US markets through wind turbine component exports. With more than 47 GW of total onshore wind installed capacity as of September 2024, it continues to be the fourth leading wind market in the world, with wind accounting for a 10 per cent share in its total national power installed capacity of 452 GW.
Owing to a range of policy and institutional interventions by the central and state governments, 2023 witnessed 2.8 GW of installations, the highest annual installation level since 2017. The recently concluded wind and hybrid auctions affirm that there is a solid pipeline of more than 13 GW of wind projects in India as of end-2023.
To advance the attainment of targeted volumes of 10 GW of annual wind and 50 GW of renewable auctions, the central government has provisioned administration of auctions by public sector undertakings such as NHPC, NTPC, Indian Railways, SJVN and PTC. State utilities have announced stand alone wind, round-the-clock, firm and despatchable renewable energy (FDRE) and hybrid auctions, totalling 21 GW of capacity in 2023. Furthermore, the FDRE tender type, as an upgraded version of the RTC tender for renewable and storage projects, is an eye-catcher.
In this decade, wind installations, in the highly competitive Indian onshore wind market, will primarily be driven by central and state auctions, increased demand due to sector-based decarbonisation goals (especially in the commercial and industrial segments) and overall peak power demand, onshore wind renewable purchase obligations (RPOs) and grid stability needs. The mandated minimum share of renewable energy consumption for discoms and the ability of consumers to purchase green electricity, in addition to the waiver and the introduction of interstate transmission system charges and wind-specific RPOs from 2023 to 2030, are some other
sector boosters.
Hopefully, there will be continued improvement with regards to the timely disbursal of payments by discoms, on-time construction of the planned transmission capacity to integrate 48 GW onshore wind by 2030 and wind repowering projects taking place under the revised National Repowering and Life Extension Policy for Wind Power Projects, 2023. Despite a positive policy and regulatory momentum, the current onshore wind forecast through the end of the decade may leave a sizeable gap between the wind market growth and the government’s 140 GW target of installed capacity by 2030. A few project execution challenges continue to deter progress on onshore wind, including state-level issues for right of way, sanctity of power purchase agreement and delayed payments, as well as land allocation. The industry is also experiencing the aftermath of increased turbine prices, owing to commodity price inflation and higher financing cost.
Future outlook
In terms of wind technology, the country is not behind the global trend of increased turbine sizes. The average size of onshore wind turbines installed in India during 2023 was 2.5 MW as per the Global Wind Energy Council’s (GWECs) supply-side data report. Currently, the MW-scale approved WTG models are up to 5.2 MW. Moreover, it is important that India’s wind manufacturing base becomes more cost competitive to reduce import and utilise the domestic capacity available at the component level.
In the offshore wind space, although India has an ambitious offshore wind auction trajectory of 37 GW for 2024-30, its offshore wind market development activity is still at a nascent stage. The viability gap funding of Rs 68.53 billion for installation and commissioning of offshore wind energy projects of 500 MW each, off the coasts of Gujarat and Tamil Nadu, including a Rs 6 billion grant for port development, is much-needed support that the industry has received from the central government. Both states are working on their first tenders and GWEC is supporting the process through of its India Offshore Wind Working Group.
Considering the overall progress, strong policy drivers and a few possible delays in project execution, GWEC expects continued recovery from the slowdown and has revised India’s onshore wind outlook for 2024-28 to 22.8 GW in its Global Wind Report 2024. Looking at the long-term outlook, the total installation is estimated at about 122 GW in 2031-32 as per the latest National Electricity Plan of the central government.
