The Standing Committee on Energy (Chair: Mr. Rajiv Ranjan Singh) submitted its report on the ‘Evaluation of Wind Energy in India’. Key observations and recommendations of the Committee are:
▪ Potential of wind energy: The Committee observed that only a fraction of the country’s wind potential has been tapped. The commercially exploitable potential of wind energy in India is estimated to be more than 200 gigawatts (GW). As of May 2022, the total installed capacity of wind power was 41 GW, i.e., about 20% of the commercially exploitable potential. Reasons for slow capacity addition include: (i) shift in tariff system from feed-in-tariff (guaranteed abovemarket price for producers) to tariff determination by competitive bidding, and (ii) aggressive bidding by developers. The Committee observed that solar energy has been prioritised over wind energy, despite import dependence in the solar sector. From March 2014 to May 2022, the installed capacity of wind power has increased by 93% as compared to a 2064% increase in solar power. It noted that India has strong domestic manufacturing in the wind energy sector. The Committee recommended giving due priority to wind energy in order to maintain a balanced energy mix.
▪ Change in tariff system: Till 2017, wind energy capacity addition was through a feed-in tariff mechanism (guaranteed above-market price for producers) and subsequently, it changed to tariff determination through competitive bidding. This shift has disrupted installation of projects. There has been a transition from a relatively high tariff of Rs 4-5/unit to a more competitive tariff of Rs 2.5- 3/unit. This has reduced the profitability of wind power projects. The Committee observed that under the bidding mechanism, the size of wind power projects has increased and they are awarded to large independent power producers/developers. Some developers resort to aggressive bidding, thus decreasing prices to unsustainable levels, and eventually back out of the project. It recommended provisions for a heavy penalty on developers backing out unilaterally and blacklisting persistent defaulters.
▪ Offshore wind power: The Committee noted that offshore wind energy (wind energy projects in water bodies) potential was estimated to be about 70 GW off the coast of Gujarat and Tamil Nadu. However, no project has been established in these states. Offshore wind energy has higher capacity utilisation factor than onshore projects and its cost decreases with increase in installed capacity. The Committee recommended exploring offshore wind potential in different coastal areas of India.
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