SPARK
An energy update brought to you by GE
Edition - 2
A policy to lift wind energy manufacturing in India?
India’s pace of economic growth — ranked No. 1 among fastest growing economies in the world this year by IMF — raises the opportunity for several businesses to ride demand in the country across sectors in consumer businesses, B2B products and services, or exports. Add to this the projected jump in demand from global brands shifting manufacturing, at least partly, to India as they de-risk their supply chains.
Manufacturing at scale both for local consumption and exports can be transformative for India and the government has doubled down to harness its potential for income generation and jobs creation. Policies such as National Electric Mobility Mission Plan 2020 to encourage electric vehicles adoption, a drive to localize defence production, specialized plastics industrial parks, a fillip to upstream construction materials with aggressive infrastructure spending, and packages to help factories in pharmaceuticals, food processing, textiles, and leather goods are examples of the government’s intent.
One policy initiative bears a closer look for the early promise it is showing and the potential to replicate across industries: the multi-billion dollar PLI scheme, short for production linked incentives scheme. The PLI policy has set a production target of Rs 30 lakh crore or $375 billion and employment of six million in five years. To this end, the government has earmarked nearly Rs 200,000 crore (about $25 billion) to support 14 industries such as pharmaceuticals, semiconductors, electronics products, solar photovoltaics, automobiles and auto components, batteries, speciality steel, and drones.
Each of the 14 sectors has two distinct characteristics: one, there is enough domestic demand that, in turn, makes it economical to manufacture and sell in India. Add the possibility of exports like what manufacturers moving out of China want and it becomes a win-win for all stakeholders. Take the example of India’s second biggest import after crude oil: electronics, a sector that had imports of more than $70 billion in 2021-22. Even a fraction of that made and assembled in India will have demand given the lowered shipping costs. The Ministry of Electronics and Information Technology’s vision document projects $300 billion worth of electronics manufacturing in India by 2026, a four-fold jump from now.
Ditto with sectors such as automobiles, pharmaceuticals, telecom equipment, and food processing that are ready to leverage a booming domestic market and significant export demand.
The second characteristic defining the 14 PLI sectors is that they are already in or are on the cusp of big technological change. To use an oft-used F1 racing saying, “Races are won on the curves.” The combination of technology shifts and ready markets present an advantage for India to build a manufacturing base in some of these sectors. Solar photovoltaics, batteries and drones are sectors in which India already is a strong market or will be in the near future.
Much in the same way, wind power manufacturing in India is ripe for a PLI-like boost. Consider the numbers: of India’s installed electric power capacity of over 405 GW, wind power accounts for 40,625 MW or more than 10% share. With India’s target for installed renewables capacity set for 450 GW by 2030 of which wind power plants will account for 140 GW, the growth in demand for such installations will be off the charts.
Globally, too, the projections for wind power this decade are sky high. From an installed 840 GW capacity last year, energy researcher Wood Mackenzie predicts that global wind power capacity will more than double to 1,756 GW by 2030.
Already a strong case has been made by both the local industry to extend the government’s PLI scheme to the manufacture of wind power equipment similar to the support for solar panel factories. There have been news reports that the government is considering covering the manufacturing of offshore wind power installations under the PLI scheme.
There’s another policy lever before India: exporters have been demanding a revision in the government’s Remission of Duties and Taxes on Export Products or RoDTEP scheme. A scheme that replaced MEIS (Merchandise Exports from India Scheme), an earlier policy that was ruled non-compliant with World Trade Organization rules, RoDTEP envisaged exporters receiving refunds on embedded taxes and duties. The aim was to boost India's competitiveness in international markets by ensuring levies do not inflate the exporter’s price. The scheme applied most to export sectors that were relatively poor in volume and excluded large industries such as steel, pharmaceuticals, and chemicals. If a review is in the offing, India will further gain by extending RoDTEP benefits to wind power manufacturers.
Over the years, India has become a global hub for wind equipment supplies with the export of turbines. Factories making wind turbines and equipment already have a capacity of 10 GW in India. With the government stepping in with support in the form of RoDTEP, PLI and other incentives, India could well become a leader in manufacturing of rotors, blades, nacelles, generators, drives, gears, motors, controllers, shafts, and other parts. Such an incentive will have a sunset period announced beforehand to ensure economies of scale and efficiency are harnessed by manufacturers in time and become globally competitive.
A good policy will help build a robust ecosystem in wind power equipment in India complete with globally competitive small and medium enterprise suppliers who will scale up over time. The industry envisages investments to the tune of Rs 15,000 crore in wind energy component manufacturing.
To be sure, such a PLI policy intervention will be successful only by addressing in tandem a bunch of challenges in the wind power sector such as land acquisition, right of way, grid installations and modernization, reforms in the auction process, tweaking financial incentives etc. Other norms such as accelerated depreciation and rules for domestic production and sourcing need to continue.
The complexity of wind power in India will only increase in the years ahead. For instance, it is estimated that India has over 600 GW of onshore wind power capacity at 120-meter hub height and 174 GW of potential in offshore systems. These types of installations require design and engineering expertise both of which India has a talent pool that can be scaled up to meet local and global demand.
*The piece has been put together by GE based on publicly available sources
Navigating opportunities to tap into India’s wind energy potential
Dr. Balaraman Kannan, Director General, National Institute of Wind Energy, is an expert in RE integration and power system planning and operation. He shares his insights with GE on India’s energy policy landscape, navigating offshore wind growth opportunities and how can the industry leverage wind energy’s untapped potential.
1. How is the policy environment supporting India’s growth target for the power sector?
In my view, the energy sector is poised to look into the clean energy transition with clear vision for the country and looking at the global front with ‘One Sun One World One Grid’ initiative. The policy landscape exhibits robust plans that enable renewables and distributed energy resources to promote energy resilience and local manufacturing of renewable energy and energy storage technologies. This is extensively supported by existing plans and initiatives, including flagship efforts like India’s commitment to achieve 500 GW of installed renewable energy capacity by 2030 and progressing towards its global commitment to become net zero by 2070.
2. In your view, how must the industry navigate through some of the offshore wind challenges and opportunities?
Working in offshore poses interesting set of challenges which can be handled with planning and knowledge through tools and resources that are available through global partnership. More thorough understanding and data collection of key met-ocean phenomena such as wind velocity and shear; low-level jets; tidal and current velocities; wave celerity & characteristics, geotechnical data relating to surface and subsurface characteristics, seasonal and diurnal variations, and the interaction among these conditions is required. The cost per MW for offshore turbines is higher due to sub-sea structures, logistics and evacuation of power. The global tariff trajectory is giving confidence and it is possible to achieve near grid parity with wholesome development of the ecosystem.
National Institute of Wind Energy (NIWE), through its wind resource assessment has been contributing extensively to identify and locate wind rich sites in the country through field measurements for the development of wind energy utilization. The data generated thus from all parts of the country have been routinely consolidated for preparation of the national wind resource atlas.
3. What are some of the key initiatives that NIWE is looking at in the wind sector?
At NIWE, we have started preparing indicative renewable energy potential maps (wind maps at 120m & 150m and hybrid maps) through advanced numerical meso-scale modeling techniques and getting them validated with integrated wind and solar masts and remote sensing in-situ ground measurements. These maps form the first line of planning tools for stakeholders to move towards achieving the ambitious goals envisaged by the government.
To cope up with the ever-increasing hub height of the wind turbine, NIWE has also taken a new initiative to deploy more remote sensing devices like LiDAR & SODAR, with field validation, in addition to met masts. As a part of the IEA Wind TCP, the teams at NIWE are working in global government to government collaborations to bring the best of technology and solution for all the Indian stakeholders.
4. Do you think wind potential in India largely remains untapped?
Wind power constitutes most of the renewable energy mix in India, with 37.7% of cumulative installed capacity, as of March 2022. However, the overall estimated potential dwarfs the current installed capacity. There is close to 700 GW of onshore capacity at 120m hub height and much larger potential with estimation being carried out at 150m hub height. In addition, the offshore potential is estimated to be 70GW mostly with fixed-bottom and possible additional potential through floating offshore wind too. These statistics demonstrate that there is no dearth in potential and this huge untapped wind energy potential will be the driver that is crucial for advancing the country's clean energy transition. States like Tamil Nadu, Gujarat, Karnataka and Maharashtra are the leading markets for wind, accounting for 72.3% of the cumulative capacity. But new states have also started joining the list hitherto uncharted because of introduction of turbines suiting those sites with moderate to low winds.
To augment onshore wind capacity, focus should also go on repowering old turbines with the latest technology so that those wind farms yield optimum capacity. MNRE has advised repowering to be taken up in a practical and open approach benefiting all stakeholder primarily the early investors. Decommissioning old turbines and investing in new sustainable technology to improve the operating performance of the turbines will catalyze new growth and there are emerging technologies which are finding their foothold in the circular value adding economy which can be tapped into and customized. The offshore wind energy sector is expected to gain momentum since the government is considering the facilitation of transmission from the sea which would help reduce project costs and building confidence amongst the local communities.
Wind turbine manufacturers also feel that offshore wind sector will need significant investment in newer technologies. Inter-governmental forms of exchange have provided many opportunities to learn from each of their experiences and is leading India towards energy independence and creation of export hubs for advanced technology being used globally. Offshore would be vital for production of green hydrogen too and India will be playing a major part in this new ecosystem emerging pan world.
5. What are some technologies that India can look at to boost its untapped wind export potential?
Given the wind potential in India which are moderate to low, there is a need to design the wind turbines to cater to these wind regimes. The country has witnessed a number of models post 2016 with low specific power turbines and there needs further development in this regard. In addition, with the focus on LCOE, there is a need for modularizing the wind turbine components.
*The piece has been put together by GE based on inputs from National Institute of Wind Energy
Pioneering sustainable wind energy with GE’s ZEBRA Consortium
India’s efforts to move from traditional sources of energy conservation to a more innovation-intensive, energy efficient and sustainable ecosystem will be imperative on the backdrop of global climate challenges. To achieve this goal, it is important that all sustainable sources of energy including the wind energy industry continue to evolve consistently. Sustained innovations in design and manufacturing, processes, reliability, capacity factors, and cost reduction remain critical to this goal. With a persistent focus on decarbonization and round-the-clock power, the Indian renewable energy landscape is undergoing a positive transformation. A step in this direction is the eco-friendly design and manufacturing of new and recycling of old wind turbine blades.
According to a study by the University of Cambridge Institute for Manufacturing, by 2050, decommissioned wind turbine blades could make for 43.4 million metric tons of waste. Further, tens of thousands of wind turbine blades decommissioned around the world will end up in landfills, according to a report by Bloomberg.
Europe, for example, has been facing a challenge in terms of replacement and recycling of the blades. As a wind power pioneer with the first wind farms dating back to the 1970s, Europe is already facing this issue with thousands of wind turbines reaching their end of life every year.
The ZEBRA (Zero Waste Blade Research) aims to significantly contribute towards the industry’s transition to a circular economy with a fully recyclable wind turbine blade. The consortium is looking at ways to also reduce waste from blade manufacturing, which are expected to be larger than decommissioned blades volumes over the next decade.
The ZEBRA project is a unique partnership bringing together industrial companies such as LM Wind Power, a GE Renewable Energy business. The project is a pioneer in introducing newer materials and processes that facilitate recycling, including the technical, economic, and environmental relevance of thermoplastics resin in wind blade manufacturing. The material compares favourably with thermoset resins with the benefit of recyclability.
The far-reaching impact of the project is a clarion call to suppliers in the wind industry to design out waste from the value chain and ultimately deliver it back to suppliers for recycling. Olivier Fontan, CEO of LM Wind Power has been upbeat on how the company’s technology has played a crucial role in making wind power one of the most competitive sources of electricity.
The ZEBRA project has made significant progress since its launch in September 2020. Besides the production of the first prototype of its recyclable wind turbine blade, value-chain partners have also developed and optimised the entire manufacturing process by using automation to bring down energy consumption and waste generation. As the industry’s leading manufacturer, LM Wind Power envisions producing Zero Waste Blades by 2030, which in practice means to avoid sending excess manufacturing materials and packaging to landfills and incineration without energy recovery, thus setting up a circular economy and create a framework for recovering the value from waste.
LM Wind Power's first recyclable blade prototype under ZEBRA project
At GE, the value of wind power is as much in the green electrons that it produces as it is in what it doesn’t produce. One thing we don’t want our blades to generate is waste. Under the ZEBRA project, LM Wind Power's first prototype of the 100% recyclable blade takes a step
GE Vernova unveils its new brand name
In keeping with a long tradition of building businesses to deliver innovative solutions, we, at GE, have changed the brand name of our energy business to GE Vernova. Driven by an ambition to create an industry-leading, global, investment-grade public company committed to energy transition, we aim to accelerate the transition to reliable, affordable and sustainable energy.
In keeping with a long tradition of building businesses to deliver innovative solutions, we, at GE, have changed the brand name of our energy business to GE Vernova. Driven by an ambition to create an industry-leading, global, investment-grade public company committed to energy transition, we aim to accelerate the transition to reliable, affordable and sustainable energy.
GE Vernova will help build a cleaner, better future, as we tread the path to the new era of energy.
*The piece has been put together by GE based on publicly available sources
GE has been a partner in driving India’s energy transition through future-forward technologies. As committed partners in climate solutions, we anticipate COP27 to recognize and address the urgent need for a massive step-up in the deployment of renewable energy. We work closely with the government under their flagship schemes to support sectoral ambitions. Spark is a GE curated quarterly newsletter on the energy sector. This edition captures views of government and industry stakeholders on a suite of onshore and offshore wind energy solutions.
Mahesh Palashikar, President, GE South Asia
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