ET reports that “Wind energy sector in India expected to attract Rs 20,000 crore of investments” (Link: http://economictimes.indiatimes.com/industry/energy/power/wind-energy-sector-in-india-expected-to-attract-rs-20000-crore-of-investments/articleshow/45030063.cms). What makes the wind to blow stronger in the coming year?
One of the reasons for the revived interest is reintroduction of accelerated depreciation (AD), which was withdrawn in 2012. This makes the wind energy attractive for captive use for many industries as the investment gets tax benefits and the wind power costs becomes viable. Those who were exiting from this business in 2013 are coming back with a pent-up demand. 2013 was a slow growth year for the wind sector but that loss is set to make 2015 a stronger year.
More than the tax breaks, it is the health of the economy which is a big driver for this industry since majority (~70%) of the wind power installers borrow to install the capacity. When the interest rates are low and big ticket loans are available to this sector, it sees a boost. Demand for power is always there but at what cost energy is produced depends on the finance costs of the energy producer. With the new initiatives of the Govt. towards the infrastructure growth and interest rates coming down is a matter of few months’ time, wind energy sector is set to see strong winds in 2015 and it is expected to add incremental 3000 MW capacity to already installed base of 20,000+ MW.
|Chart generated from Wikipedia data|
By the end of 2015 or early 2106, India would replace Spain to become 4th largest wind power producer. When compared to China and USA (the #1 & #2), India seems to be far beyond but for those top wind power producers, it is the offshore capacity which gives the edge as off-shore wind turbines are 3 to 4 times bigger in capacity than those installed on the land. India is beginning its offshore activities with the first planned demonstration along the Gujarat coast. (Link: http://economictimes.indiatimes.com/industry/energy/power/government-signs-pact-for-offshore-wind-power-project/articleshow/43980551.cms). With 7,600 km of coastline, India has better potential to add to off-shore wind capacity that would help India to reduce its carbon foot-print and reduce dependency on coal generated power. What some of those retired coal miners will have to do then? Well, they can try poetry.
“Let the wind blow in all directions,
and free us from fission's and emissions;
Oil and coal are unkind,
Wind is the embrace for the mankind;
Black flower is no beautiful,
Earth no green is not wishful;
End the yell, be grateful, sing joyful,
Let the wind blow …”