India Wind Power Update

After Reliance's proposed 150 MW wind farm in Maharashtra, now the Tata's are building a 100 MW wind power plant. The Tata plant will be financed by the Asia Development Bank which is promoting wind power in India. Reliance Energy and Tata Power are the biggest private electricity suppliers in Maharashtra (mainly Mumbai).

Meanwhile Suzlon who is building the wind farm for Reliance has just signed its single biggest contract to supply wind turbine capacity. The contract is to supply 400MW of turbine capacity to PPM Energy of Portland, Oregon, USA.

In Suzlon's high-profile battle for German wind turbine maker REpower, Areva has not yet topped Suzlon's latest bid. Suzlon is now fairly confident of getting 40% of REpower from the market, which along with the 25% owned by its bidding partner Martifier should take the total stake above51%.

India is trying to encourage inter-state trading in clean energy by industry. "India is contemplating a system of trading green certificates to enable industries located in one state to tap the renewable energy potential of other states", according to a senior government official speaking at an interactive session between Indian and US energy experts organized by CII in Chennai.

Delhi is making moves in this direction already. In its plans to have a Green Games, it wants to buy wind power from Rajasthan which is a regional superpower of sorts in wind power. Tamil Nadu and Maharashtra lead the nation in wind power capacity, but they are too far away from Delhi.

Essar-REpower Venture Delayed

The proposed Essar-REpower joint venture to produce wind-turbines near Hazira in Gujarat seems to have become a victim of the Suzlon-Areva bidding war to acquire REpower.

Essar and REpower entered into a license agreement last year to build the plant that would make 1.5 to 2 MW wind turbines for the South and South East Asian market. This plant was to be ready in 2007. But according to "a senior official at Essar Power who asked not to be identified. 'We acquired land near Hazira (in the western state of Gujarat) and have also hired people for the venture, but now things have come to a standstill,' he added. He said the company had even hired a managing director for the joint venture."

“Repower, however, claimed there was no delay in the project. 'There is no delay in the second step—to form the joint venture—planned for 2007. First, we wanted to get to know the Indian market better, said Hanna Scherger, team assistant public relations, investor relations and legal affairs for Repower in an emailed response.”

Essar and REpower to build wind turbines in India

REpower shot to fame in India because of Suzlon's battle with French nuclear power giant Areva to acquire it. Regardless of the outcome of that battle though, REpower seems set to come to India.

REpower is teaming up with the Essar group, under a license agreement signed last year, to start design and construction of 1.5 MW to 2 MW wind turbines in India, and to market them in South East Asia. There is the likelihood of a future JV to build or import 3MW to 5MW turbines. This JV would also have access to other technological developments at REpower, and the market could also be expanded beyond South East Asia. REpower has entered the Chinese market separately through a JV with Chinese companies, North Heavy Industry Corp and Honiton Energy Ltd.

"Essar had plans to set up the manufacturing plant in a port-based location with initial investments of Rs 50 crore." >>FE

Update of the Suzlon-Areva battle for REpower

The REpower supervisory and management boards have recommended that shareholders accept Areva's last bid (140 euros per share) over Suzlon's (126 euros). However in an interesting twist REpower also suggested that it would prefer to be acquired via a joint bid by both companies. The rationale seems to be that while either of the two companies could help REpower in its growth plans, a combination of the two would offer far more.

Exploring Synergy of Clean Energy Sources

"Available 24/7" is obviously not a phrase that solar or wind power plants swear by. For obvious reasons - these are forces of nature that we can only harness when they are available. The sun does not shine at night, and the wind only blows at peak capacity about 30% of times in the best of locations. So that means that they will always stand at a serious disadvantage versus fossil fuel based solutions where the power source can be easily stockpiled and used as and when required.

Power grids therefore have had to balance off the addition of any solar or wind power with equivalent power from a conventional power plant. Of course this leads to inefficiencies as the conventional power plant does not get to operate at full capacity, thus increasing the cost of its output.

Denmark uses hydro-electricity from neighboring Germany, so it tends to draw more and less power depending on how the wind is performing. This works well because the flow of water that generates the hydro-power can always be controlled. Of course this is not an ideal scenario but it does present an interesting case study on how a combination of renewable power sources can help overcome the disadvantages of each.

In India, small solar-wind hybrid systems are slowly getting popular, aided by huge govt subsidies. On a much larger scale California is building two 50 MW solar thermal power plants, which will use biogas from cow dung as a backup fuel source.

If this experiment is successful, Indian policy planners should take note. India has the largest bovine population in the world, and the second largest human population. The sun is also especially generous with India. Energy independence thus seems only a matter of infrastructure.

India Wind Power Update

A quick update on the wind power scene in India.

New Installations

Suzlon Energy is setting up a 150 MW wind power project in Sangli district of Maharashtra for Reliance Energy, which is part of the Anil Dhirubhai Ambani Group. The project will be completed in two phases, and when complete will supply 380 million units per year, all of which REL will use for its distribution business in Bombay. In the next 2-3 years REL will set up 500 MW of wind power in various states, further boosting the domestic wind power scene. NTPC is also expected to give due importance to wind power in its, "plans to generate 1,000 megawatts of power through renewable energy sources by 2017".

New Manufacturing

In another move that is likely to benefit Indian wind power equipment manufacturers, Belgium-based Hansen Transmissions will set up a greenfield plant to manufacture gearboxes for wind turbines in the megawatt range, near Coimbatore. The plant will be operational in late 2008, and will reach full capacity of 1500 to 2000 gearboxes by 2010, at which time it will

Inorganic Growth

Meanwhile Suzlon's battle with Areva, the world's biggest manufacturer of nuclear power stations, to buy German wind-turbine maker REpower Systems goes on. Last month Suzlon topped the French Areva's offer of 105-euros per share with an offer of 126-euros per share. Areva responded yesterday with an offer of 140-euros per share. Areva already owns 30% of REpower, while Suzlon is partnering with Portuguese company Martifier, which owns 25% of REpower, and a consortium of banks led by ABM Amro, on the bid. In response to the new bid, Suzlon apparently is considering an offer of 160-euros per share.