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The Winds Of Prosperity

Provide manufacturing with support to facilitate innovative financing, increase capabilities, facilitate job creation and meet the Make in India initiative and goal. Wind manufacturing capacities are created in India, while Solar is largely imported from China. Incentives for local manufacturing and job creation in the sector should be considered

Photo Credit : Reuters


Renewable energy has become pivotal to the movement against the risks of climate change. India's commitment at COP21 to reduce 33-35 per cent carbon emissions by 2030 and increase renewables to 40 per cent of the energy mix by 2030, is set to truly expand the country's renewable energy portfolio. The government target of 175 GW by 2022 including 60 GW wind energy, is closer to becoming a reality propelled by technology and conducive policy environment for renewables; both by central and state governments.

Looking back at 2016

2016 has been an exceptional year for the Indian renewable energy sector. With ~ 28.5 GW wind energy installation, India attained 4th position in global wind power installed capacity. We now have ~31.5 GW to achieve by 2022 i.e. ~5000 MW annually and I am confident the wind sector can deliver the 60 GW target. FY16, India recorded its highest wind energy installation with 3415 MW. Wind and solar energy capacity combined exceeded hydro capacity and now these are second only to coal based capacities. In FY17, the industry will grow by over 30% and surpass all previous records of installations.

The government's thrust on renewable energy was supported by policy actions in 2016 such as; approval on the repowering policy, the draft wind-solar hybrid issued in June 2016 and revised RPO trajectory. Further, policy impetus included, 1 GW under Inter-state transmission scheme (ISTS) across various states and investments in Green Energy Corridor project. During the Union Budget 2016, the government doubled the coal cess to Rs 400/tonne, thereby, creating the resources to achieve 175 GW renewables target. The government's commitment to improve grid infrastructure also reflected in the proposed additional depreciation for the plant and machinery acquired, installed for transmission activity, announced during the Union Budget 2016.

Expectations and way forward 2017

Renewable energy has moved closer and closer to achieving grid parity. Costs have also been steadily reducing across all elements including PV cells, solar installations, wind energy generation and storage solutions. This marks a massive growth potential of the sector.

Like any developing country, India too has immense energy demand as a result of its population and growing aspirations. Added to this, the government's vision of energy security to all and its commitment to reducing carbon emission. Both combined, this translates into enhanced renewable energy demand and subsequent capacity build-up.

In my view, we now need a run-rate of 5000 MW wind energy per year, to accomplish the target of 60 GW by 2022. This has to be supported by proactive policy action of the government to ensure the momentum is maintained:

* Long-term policy predictability: Accelerated Depreciation (AD) and Generation Based Incentive (GBI) should continue till 2022

* Banks and financial Institutions should earmark at least 20 per cent finance for renewable energy projects and provide finance for longer period of 20-25 years.

* SMEs should be supported by 5 per cent interest rebate for using renewable energy for captive requirement

* Improve availability of grid and land infrastructure at State level

* GST for renewable energy should be pegged at zero rate, since electricity is not subsumed under the proposed GST framework

* Provide manufacturing with support to facilitate innovative financing, increase capabilities, facilitate job creation and meet the Make in India initiative and goal. Wind manufacturing capacities are created in India, while Solar is largely imported from China. Incentives for local manufacturing and job creation in the sector should be considered.

* Some recommendations include:

i. Duty and excise exemption on certain components' import needs to be continued

ii. Wind and solar sectors should be provided with the same incentives

iii. Provide financial incentives to encourage domestic manufacturing of solar photovoltaic (PV) cells, thereby reduce the dependence on imports

iv. Implement the practices of China - EXIM and USA - EXIM that give a line of credit of $1 billion and $2 billion respectively, in the case of exports by local companies. In India, EXIM offering is limited to $200 million per year. RBI should remove the 10% limit imposed to one company or infuse $5 billion fresh equity to EXIM.

Technology to lead the way in 2017

In 2017, innovation and technology will continue to be the catalyst for the wind industry growth. The wind-solar hybrid solutions, digitization of services, smart-grids, innovation in tower and blade technologies such as Suzlon's 120 meter hybrid tower, Suzlon S111 wind turbines are aimed towards making unviable wind sites available, ensuring better yield and increasing the capacity utilization factor (CUF). These disruptive technologies will continue to bring down the levelised cost of energy (LCOE) and ensuring affordable power for all.

Wind sector R&D efforts are also focused on developing longer, light-weight blades made of carbon and other reinforced composites. By increasing wind catchment area, these blades can reduce weight and improve economies, making energy harnessing more efficient.

The R&D progress of the renewable energy industry will lead not only to India becoming the global hub for renewable energy technology manufacturing, it will also open up direct and indirect employment opportunities and drive the growth of other industries with clean power.

Renewables and especially wind in India has the experience, technology, reach and indomitable spirit to contribute towards Nation's energy security and enable the transition from fossil fuel dominated energy architecture. We need to harness the 300 GW wind energy potential in India and seize this opportunity NOW to ensure sustainable, affordable and reliable energy for all.

Hence, it is through technological innovation and continued conducive policy environment the pursuit of sustainable social, economic and ecological development can be achieved. Renewable energy can chart the country's progress path and truly power a greener tomorrow.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tulsi Tanti

The author is chairman of Suzlon Group

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