Analysis of Wind Energy Sector in India

Industry Background

India is presently ranked fourth in the worldwide wind energy installation list, with an estimated capability of approximately 1271 MW installed on 28 February 2001, a figure behind Germany, Denmark and the US. The Worldwatch Institute in Washington acknowledges India as a 'wind superpower.' The conversion of the Non-Conventional Energy Sources Department into the Ministry of Non-Conventional Energy Sources in 1992 started a true wind energy boom in the early 1990s. India is likely the only nation in the globe to have a full ministry devoted to renewable energy production. In latest years, wind power generation capacity in India has risen considerably. The total installed wind power capacity as of 31 March 2019 was 36,625 GW, the world's fourth largest installed wind power capacity. Wind power is primarily distributed throughout the southern, western, northern and eastern areas. The cost of wind power in India is falling quickly. The level tariff of wind power achieved a record low of approximately 2.43 (3.5 US) per kWh (without any direct or indirect subsidies) during the December 2017 wind project auctions. In December 2017, the union government announced the relevant rules for tariff-based wind power auctions in order to bring clarity to developers and minimize the danger.

Wind energy accounts for almost 10% of India's total installed energy generation capability and produced 62,03 TWh in fiscal 2018-19, almost 4% of total energy generation. The capacity utilization factor in fiscal year 2018-19 is approximately 19.33% (16% in 2017-18, 19.62% in 2016-17 and 14% in 2015-16). Over the five months from May to September, 70 percent of the annual wind generation coincides with the length of the Southwest Monsoon. In India, solar power complements wind power, as it is produced mostly in daytime during the non-monsoon era. It is possible to separate current wind technology into three kinds. First, there are wind pumps that primarily use mechanical wind energy for water pumping purposes (used for drinking and irrigation). Then there are wind power generators (WEGS's), linked to turbines, used for electricity generation, to be distributed on electricity grids and intended for rural and/or urban use. Finally, there are wind-electric battery chargers that generate and store electricity in batteries.

Factors Affecting Wind Power Extraction

• Blade Hub elevation above ground – The higher above ground, the higher the wind speed (to 1/7th power) and since power is proportional to the velocity cube, the increased hub elevation from 30 m to 50 m results in an average wind speed of 7.6% higher. As larger hubs become more costly, this becomes an important cost-benefit trade-off.
• Wind turbine spacing on wind farms – Too far a spacing prevents interception of the maximum quantity of wind. However, too near a spacing will result in interference and less productive downwind units.
• Wind Turbine Sitting – Naturally not all sites are appropriate for wind turbine positioning. Most sites must have average wind speeds of about 10 m / s to be economical. Usually this velocity rises with height above floor.
• Air density – The greater the air density, the more energy the wind carries, and as the air density reduces with height above sea level, sites are generally less preferable in hilly areas than in flat sea level sites. (In Denver, for instance, the air density is only 0.84 at sea level, which decreases the accessible wind-borne power by as much as 6% at average wind speed).

Company Overview

For understanding real case technology transfer failure, we have chosen 2 companies - Suzlon and Senvion. Suzlon Group is one of the world's leading providers of renewable energy alternatives, revolutionizing and redefining how sustainable energy sources are being harnessed worldwide. Present in 18 nations across Asia, Australia, Europe, Africa, and the Americas, Suzlon will be driving a greener tomorrow with powerful renewable energy systems skills. Suzlon's comprehensive range of robust and reliable products, supported by state-of - the-art R&D and more than two decades of knowledge, are intended to guarantee clients optimum output, greater returns and maximum investment returns.

Sustainable development is the creed that underpins the tailor-made projects of Suzlon to safeguard the environment, reinforce communities and drive accountable growth. Suzlon has its headquarters in One Earth–Pune, which is a certified Platinum LEED (Leadership in Energy and Environment Design) and GRIHA 5-star campus and is also one of the world's greenest corporate campuses. Senvion is a major global developer and producer of onshore and offshore wind turbine generators operating globally in twenty nations with a cumulative installed capacity of roughly 17 gigawatts (GW). In its key markets of Germany, the United Kingdom, France, Australia and Canada, Senvion has a powerful competitive position and is headquartered in Hamburg, Germany. Furthermore, Senvion has a clear focus on entering fresh markets and realizing market potential. Senvion was established in 2000 as a merger of engineering firms (Jacobs Energy, BWU, pro+pro) under the name of REpower Systems AG. Meanwhile, the business has grown steadily and has become a corporation of approx. ~2bn€. Four thousand workers. Senvion produces about 90% of its income from onshore and offshore WTG sales. The remaining 10% are based on service agreements for Operations and Maintenance (O&M).

India's government has announced a praiseworthy 175 GW renewable energy target by 2022, 60 GW of which will come from wind energy. Their commitment to the nation is growing as India's wind industry matures. They have chosen to identify India as our core market and vision is to be committed to this very appealing market in the long term. By opening its biggest R&D facility in Bangalore outside Germany, Senvion decided not only to develop in India but also to tap the country's intellectual power. In 2016, Senvion decided to invest in India by buying and growing from Kenersys ' assets. Senvion will conduct project development research and provide complete turnkey alternatives in India along with its recent turbines providing consistent year-over-year reduction of LCoE and thus satisfy the company situations of our clients. For 10 years and beyond as necessary, Senvion shall undertake complete and thorough O&M accountability. Suzlon borrowed strongly from banks to obtain complete control of Germany's REpower Systems AG, a technology leader and manufacturer of the biggest offshore wind turbines. Between 2007 and 2011, the firm, later renamed Senvion, was purchased through a sequence of $1.4 billion tranches. Tanti, who was appointed president of his board in June 2007, had wrested the business after a five-month takeover fight with Areva, the state-owned French nuclear giant.

Suzlon was also forced to restructure $1.8 billion in debt after defaulting on a $200 million redemption of convertible bonds in 2012. As a consequence, its liquidity was cut and the extra burden of the worldwide slowdown in turbine sales led to the sale of Senvion to New York's Centerbridge Partners in April 2015 for a cash account of 1 billion and prospective earnings of up to 50 million.

Technology Transfer Methodology

• Repower is simply a manufacturer of turbines. Suzlon has skills in the manufacture of towers, rotor blades, control panels and component technologies. We can therefore seamlessly integrate. The key is to incorporate these strengths by providing the market with a reliable and cost-competitive product.
• Turbine technology and assembly are the ordinary business model in this sector.
• Then they (businesses) outsource the necessary parts for wind turbines. They have no access to the technology of the element.
• The real part of technology is in the parts. So if you own the two technologies and incorporate the two, you have the most competitive, reliable and next-generation product.
• We have a fully vertically integrated company in the value chain of wind turbines if we have component understanding and component technology.
• We want the entire value chain to be integrated that will benefit Repower. They get access to the parts of Suzlon and they get a chance to expand because their base is smaller.
• Growing the supply chain is the industry's main bottleneck. Suzlon is accessible to supply the element. And that can offer Repower enormous growth chance and enhance their margins. Because there are small margins for Repower.

Problems Faced During Technology Transfer of Wind Energy

In India, wind energy can be said to be as much a failure as a success to a big extent. There are many more issues facing technology application than there have been successes. We will now look at some of the reasons for the mistakes in a scrutinizing manner.

Technical Problems

• Poor turbine design (both local and foreign) resulted in rotor blade failure.
• Disregard for earthing laws and lightning protection resulted in harm from lightning strikes and excessively big breakdown of control mechanisms resulting in costly repairs and lengthy 'off-line' periods.
• Foreign collaboration has sometimes resulted to a discrepancy between locally produced components and imported parts, weakening the system's reliability.

Infrastructural Challenges

• Grid issues: when beginning up, wind turbines draw a lot of energy and this sometimes led the grids they were attached to experience voltage changes–lowering energy quality and having an undesirable impact on the devices of the customer. These changes weaken a grid and the wind turbines themselves have a negative feedback. Grid defects in 1996 resulted in a 20 percent reduction in prospective income owing to ' direct loss of generation ' (inability of wind crops to function when the wind blows). Half of all these losses in the region are caused by weak grids.
• There is a lack of knowledge in service and maintenance to manage wind farm maintenance.
• Utilities suffer from the burden of connecting wind farms to their grids. With the significant exceptions of the normal suspects Tamil Nadu, Andhra Pradesh, and Gujarat, the other countries regard wind farms as a nuisance rather than a profit because of their low reliability and non-dispatch capability. They have been put in the situation of paying greater rates for wind-generated electricity by government policy. This has led major economic distress to them and has not increased their enthusiasm and technology assistance.

There are also a few obstacles to overcoming government policy.

• There are comprehensive processes of bureaucracy that discourage entry into the industry. The central government needs 22 clearances for installation of wind power plants.
• For power plant entrepreneurs, there are no qualification benchmarks to fulfill. The only requirement specified by the MNES is a minimum wind speed of 5 m / s. For a wind turbine to be economical, this is not a factory velocity.
• Wind turbine design and characteristics lack standardization. Many overseas and local companies have made the maintenance of wind turbines difficult.

Recommendations

• The bureaucracy, as discussed is one of the considerable obstacles. The approval processes and levels hinder the installation process to great extent and hence working towards the scrutinizing the process could play a leading role in the setup, with more ease and convenience and would interest the interested players to show involvement.
• The design patterns also led to the failure of number of projects and hence knowledge transfer/sharing with proper training and recommendations with the required set of instructions would be appreciable from the leading players of the industry worldwide, as the fall points could be understood and worked upon for minimization of technical/infrastructural failures, along with failures in understanding services and maintenance of the farms, grids and other related considerate.
• Standardization is something, which requires the refactoring on. The standardization processes led by few market pioneers is an issue to carry out the process of mill farming and hence necessary steps must be taken, in order to make the process affordable to the other small players, in the country. Though, standardization is very necessary for the industry to meet the requirement but setting up very high standards would lead to challenges to other small players leading to the monopoly by few pioneer industries and debarring them from rising in the market.
• Collaborations (inhouse or outhouse) is something need to be tackled with care, as the right decision, could only bring the success in the technology and the industry and hence right decision making when it comes to collaboration is strongly recommended.
• Creating production based incentives: Creating such electricity-production based incentives, as reliability, performances etc. also receives great heed from the actual farm operators.
• Subsidizing Wind Energy: Subsidizing the higher cost of wind energy and taking financial burdens off the state utilities could play a leading role. This could be achieved by establishing various sorts of funds in the name of Wind energy, also bilateral institutions like World Bank could act as a source for this money.
• Bringing down Equipment Cost: This could be another important financial move. The so called “Gold-Plating” practice must be stopped, by some certifying government body and local production must provide affordable machines to concerned entrepreneurs.