BW Communities

New Power For Turbine-makers

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Four new windmills made by Gamesa Tecnologica whirl beside a banana grove in Kammalapatti, Tamil Nadu, driven by a breeze that is too soft to spin a group of older turbines standing idle nearby. The Spanish manufacturer replaced 10 older machines at the wind farm, gaining a toehold in India which has 4,600 wind turbines more than a decade old, many rusty or too small for today's power market. Europe's wind-turbine makers are stepping up sales in India, anticipating a boom in one of the bigger "repowering" plays that Gamesa says may be worth $3.8 billion in sales. The challenge is in taking work from Suzlon Energy and in getting funds in a market still depressed by the financial crisis. "Many good-quality wind sites have relatively old and inefficient turbines," says Amit Kansal, vice-president of sales for the Indian unit of Denmark's Vestas Wind Systems, the world's largest wind-turbine maker. "The opportunity for repowering is obvious." The 4,600 turbines have a capacity of 1.3 gigawatts, or about 9 per cent of the installed base in India, which rocketed to become the fifth-biggest wind market by offering tax credits to operators regardless of productivity. India also has the smallest average turbine size of the world's top 10 markets, according to Kenersys GmbH, a German manufacturer. Gamesa's estimate of Rs 16,800 crore ($3.8 billion) sales potential assumes 3,000 MW of installed capacity in need of replacement. All three turbine makers have lost money for shareholders over the past 12 months and are looking for new markets — Suzlon has dropped about 21 per cent in the period, Gamesa 28 per cent and Vestas has fallen 47 per cent. In India, repowering a site costs 20 per cent less than setting up a new project and no new land permits are needed, says J. Balakrishnan, a Gamesa sales manager working on a repowering project there. The smaller turbines installed in India are less efficient, require higher wind speeds and generate less power than newer models. The Indian government, too, is prodding the industry toward modernisation. Many existing wind farms in India were built to take advantage of a tax break. The measure encouraged companies to erect turbines but not to maintain them or see that they produced power, according to Renewable Energy Minister Farooq Abdullah. He wants the tax credit to be replaced by an alternative subsidy that rewards projects for the amount of energy they generate. The so-called generation-based incentive pays wind farms Rs 500 a MW-hour of electricity they feed to the grid. Still, many operators may not want to junk equipment for wind farms that has more than half its useful life left. Gamesa, which completed India's first repowering project last month, thinks installations in Spain and other European countries can be revamped too, CEO Jorge Calvet said in an interview last month in Mumbai. Kenersys, the German manufacturer, and Orient Green Power, an Indian developer of renewable-energy projects, say they are looking for ways to tap into the budding repowering market. The newer machines — with hub heights and rotor diameters more than double that of the older ones — better harvest energy from the wind. The new machines may double the farm's electricity output by the end of the monsoon season in October, helping the project pay off in five years, Gamesa estimates. Other benefits include lower maintenance costs and easier access to replacement. Older machines can use more power than they produce during low-wind seasons. Owners turn them off, sometimes for up to half the year. Obstacles to repower old sites include getting up to a dozen owners of each facility to agree and ensuring the plant can earn the same subsidised rate for energy. The waste generated by tearing down old windmills is another barrier. Bloomberg (This story was published in Businessworld Issue Dated 09-05-2011)