Wind energy investments in India reduced due to lack of policies, says Frost & Sullivan analyst

By Editor


Greentech Lead Asia: Wind energy investments reduced in India during 2012, for the first time over the last 20 years, said Suchitra Sriram, program manager, Frost & Sullivan, to Greentech Lead.

The wind energy sector in India is affected by lack of government policies and other issues such as poor grid connectivity and lack of financials for the providers, Sriram said.


Globally, India is the fifth largest market for wind energy and the second largest market in the Asia Pacific region, next to China. India added around 3 GW capacity in 2011 but this is expected to reduce to less than 2 GW by the end of 2012 mainly attributed to ambiguity in the government’s generation based incentive (GBI) scheme and other issues such as poor grid connectivity, high interest rate, and weak financials of state-government owned power distribution companies.

The delay in government’s announcement on the GBI framework had slowed down the industry in 2012. The outlook for 2013 indicates that the Indian wind power market is likely to grow at a slower rate, according to Frost & Sullivan analyst.

Wind energy market continued its high growth trajectory albeit at a slower growth rate in the Asia-Pacific region led by key economies such as China and India when compared to the developed markets in the West.

For the third year in a row, China is expected to have the maximum installations globally that totals a cumulative capacity of more than 65 GW by 2012. With stable and sustainable long-term policies in place, the wind energy market will play a major role in the global energy sector mitigating not only carbon emissions but also providing employment opportunities to millions of people.

Major equipment providers in the wind energy markets in Asia Pacific are Vestas, Sinovel Wind, Goldwind, Dongfang, Siemens, and Suzlon Energy.

Japan has been identified as a growing wind power market in the APAC region but the thrust is more on developing its offshore wind farms than onshore wind power market. Japanese conglomerates such as Toshiba Corporation, Hitachi Zosen Corporation, JFE Steel Corporation, Sumitomo Electric Industries Ltd, Toa Corp, and Toyo Construction Co Ltd. are expected to pump in investments close to $1.53 billion in setting up offshore wind farms in the country during the next 3-5 years.

Besides the traditional wind power markets such as China and India in the Asia Pacific region, other key markets that contribute to growth includes Australia, The Philippines, and Vietnam.

According to Sriram, major challenges faced by developing countries in wind energy development are inadequate power transmission infrastructure from the production site to demand-centric zones, lengthy approval procedures and stringent local regulations, and lack of policy framework and guidelines to attract investments. In the Asia Pacific region, most of the developing countries do not have centralized regulatory body or an agency that addresses the concerns pertaining to the wind energy industry.  All these challenges obstruct large-scale deployment of wind power farms.

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