Energetica India Magazine nº88 March-April 2020

WIND POWER How certification could stimulate India’s wind energy industry Transparency, alignment with international standards and a focus on project as well as type certification could encourage international investment and make it easier for Indian manufacturers to succeed in foreign markets. Wind power in India has been a big success. The country has the fourth largest installed wind power capacity in the world, which at 37.5 GW is around 10% of its total power generation capacity. That success, however, is bringing India’s wind energy towards a critical point. Early wind power projects benefitted from a feed-in tariff that ensured a relatively secure revenue stream for projects that made it to the operational phase. As India’s wind power capacity and experience has grown, the cost of wind energy has dropped. The industry has been so successful in reducing the price of wind energy that project auctions are be- ing won by bids without any (direct or indirect) subsidies. This has encouraged the government to phase out the feed-in tariff. While this is a great achievement for the Indian wind power industry, it does have two potential negative consequences. Firstly, new wind projects in India will be fully exposed to the variability and merchant risk of the open market, meaning their revenue and return on investment will be less predictable. Secondly, extreme competition on price could encourage ex - cessive cost cutting, leading to increased technical risk. Both these factors could damage investor confidence, making them be less ready to invest in new projects in India. And that in turn could slow growth and put an end to India’s wind power suc- cess story. Already, we are seeing several Indian wind turbine manufacturers starting to struggle financially. Maintaining investor confidence in a variable market Certification offers a solution. By ensuring that turbines and projects confirm to an agreed standard, certification reduces technical risk and eliminates dangerous corner cutting. Con - sequently, all stakeholders can be confident that the turbine / project will operate safely and according to expectations. This increased confidence can go some way to compensating for the increased merchant risk of trading on the open market – which is why many international investors require some form of certification before agreeing to put money into a project. To reap the full rewards of certification, a great deal of thought and care must be put into the standards used in certification. India has always known the importance of independent and up-to-date standards. International alignment benefits local manufacturers and project developers The Indian Ministry of New & Renewable Energy (MNRE) is currently creating a new turbine standard. key strength of this future standard, developed by the National Institute of Wind Energy (NIWE), is that it is based on a widely renowned inter- national standard (IEC 61400-22) with some modifications to suit local conditions in India. While IEC 61400-22 has since been superseded by the IECRE Conformity Assessment Sys - tem, its content is largely unchanged in the new international standard and it remains the foundation of wind power certifica - tion around the world. For Indian manufacturers, alignment with international stan - dards is a critical business advantage. It means that they can develop products for the local markets and then address glob - al markets with a minimum of modification. Local and global products can then be manufactured on the same production lines, allowing manufacturers to access the economies of scale that are vital to turning a profit in a highly competitive market. Indian project developers also benefit from India aligning with international standards. They can choose from a wider se - lection of suppliers from around the globe, helping to reduce costs. Moreover, with Indian manufacturers benefiting from economies of scale, developers can choose locally sourced components with local supply chains without having to pay a premium. However, while the NIWE and MNRE have done a very good job in developing the new standard, there is some possible cause for concern. While the standard lays out technical re- Per Haahr Country Manager APAC for Renewables Certification at DNV GL 52 energetica INDIA- March-April_2020