India must intensify policy reforms to “revive” wind growth beyond 50GW by 2022, according to a new study from the Global World Energy Council (GWEC).
The India Wind Outlook Towards 2022: Looking beyond headwinds report, published by GWEC and MEC Intelligence, said the government must step up efforts to lower barriers around market design, grid infrastructure and land allocation.
The authors warned the country risks missing its ambitious 175GW renewable energy target by 2022, of which 60GW is due to come from wind energy.
The report said the country can “only realistically” reach 50GW of installed wind capacity by then, if the government fails to address the challenges.
India is the world’s fourth largest onshore wind market by installations, with 37.5GW of wind capacity as of 2019, though project installation has fallen in recent years with 2.3GW of capacity installed last year.
The report highlights key challenges that must be overcome to restore strong wind market growth in India.
These include grid and land availability issues, off-taker risks, “onerous” tender conditions and low tariff caps.
Collectively, these challenges have led to the last three central wind tenders and all state wind tenders to be unsubscribed, re-tendered or even cancelled, while 80% of awarded projects have been delayed by 6-12 months, the study concluded.
Three scenarios for new wind installations in India until 2022 are highlighted in the report.
They range from 11-17GW of installations depending on the extent and speed with which the government and industry can resolve the challenges.
In 2020, supply chain disruptions due to the impact of the COVID-19 crisis will further compound existing challenges to delay around 700MW to 1.1GW in new volume to 2021 and also possible cancellation of some planned auctions, said the report.
GWEC chief executive Ben Backwell said: “India has been one of the world’s largest wind energy markets for many years, and the government has put in place ambitious renewable energy targets in order to fulfil the country’s growing energy demand, which is set to double over the next 10 years.
“While we applaud the leadership which the Indian government has shown, the targets alone are simply not enough to ensure the market grows at the right pace to reach its objectives.
“Setting realistic prices, a faster build out of grid infrastructure, ensuring market liquidity and streamlining land allocation and site development will be crucial to revive auction appetite and accelerate execution of India’s pipeline of wind energy projects”.
“Ultimately, India must overcome the challenges identified in the report not only to get its wind market growth back on track, but to also to provide new investment opportunities, jobs and affordable energy to contribute to the country’s economic recovery from the COVID-19 crisis” he added.
MEC Intelligence founder Sidharth Jain said: “India’s wind market growth has been slow over the past two years, and growth will continue to be uneven until 2022.
“The immediate impact of COVID-19 will be delays to the projects scheduled for the first half of 2020, however, more far reaching results can impact up to 3.5GW of volumes due to projects with thinly spread developers, financial crisis and limited new auctions.”
On 20 May GWEC and MEC, along with industry leaders, will discuss the key findings of the report through a virtual report launch and roundtable.