Wind Power Potential in India- Hype or Reality
Narayana P, (IWMI-IN), CGIAR ; July 2003

The following is a reproduction of an email from the author

I think the potential of wind power is a much hyped resource and a good tool for the bureaucracy to make good money. I could not hide the smile when I read an article which says we have a potential of over 46 thousand MW. In 1997, when I did a study for the Ministry of Non-Conventional Energy Sources (MNES), this figure was 20,000 MW. I dont know how it doubled itself within five years.

Only some pockets in the country have windy locations and it is not windy all through the year. So, the capacity utilization is usually less than 20% of the installed capacity. Secondly, these windly pockets are so small that you really cannot install turbines to tap the entire potential. Even the total area where power exists is 1% of our country's geographical area. Where do we have place to install the turbines, even asuming all of them are 0.75MW (the extremely large ones). So, all this statistics of 46,092 MW is not achievable energy potential. The reality is only a small fraction.

In the mid-90`s, when the European countries had saturated their windpower markets and were looking for better avenues, India (with some vested interested bureaucrats) offered the right conditions. So, our country practically laid a red carpet to welcome them by announcing customs
exemption on several components, 100% accelarated depreciation, 10-year tax holiday on power sales, attractive power purchase agreement, wheeling and banking, etc. The state governments added their own incentives in form of sales tax exemption.

The net result was, with all these incentives, at zero generation, the internal rate of return (IRR) was as high as 7.5% (for Gujarat). Zero generation is possible when
(1) the place where the turbine is installed is not right or
(2) there is no turbine at all!!

When I was looking at the generation figures for the different installations at a station called Lamba (in Rajkot), there were more than half with zero units generated for the entire year, with March showing a magical 5 units or 4 or some such odd numbers. This is because, March is the financial year ending and the companies who have invested, to get the incentives have to show some generation. Further, what is shocking is, there were atleast about 25 to 35% of lease-financing companies that were listed in the investors. These are certainly not energy intensive companies who are looking for alternative energy sources to meet their requirements. These were companies that were interested in the incentives and not in power generation. Not surprising therefore that the installations (where such installations actually are
standing) are not being managed at all.

researcher from TERI (who also was involved in this study) remarked that several of the "installations" are actually not there on the field!!! Now you know how the bureaucracy was getting part of their money??? The other part comes from the international (read European) companies that were more than greasing the palms.

Following my presentation in MNES, the Ministry of Finance announced Minimum Alternative Tax (MAT) and what followed later was a complete collapse of the once thriving investment avenue. In fact a few companies that came up to support wind turbine industry also had to close their shops.

If India indeed had so much of wind power, why are the heavy energy-intensive industries not investing in this so called "potential"? These figures that get released are often misleading, and the country's economy is getting compromised with all these "bending backward" fiscal
incentives!! I see these revised figures of 46 thousand MW as yet another attempt by the international markets to make our governments lay another round of the red carpet for them to walk with dirty boots.

The total installed capacity of power in India (including thermal, hydel and nuclear) is not more than 65,000 MW. True, we are a generally power-deficit state. But, if you take a close look into the power supplying utilities books, you will notice more than a third of the power is lost as "T&D". In the past, agriculture sector was blamed for this entire transmission and distribution (T&D) loss.

After the World Bank insisted on energy audits, non-agricultural states like Delhi showed 52% T&D loss and Orissa had over 48% (agri consumption here accounts for less than 5% of total power supplied). In Andhra Pradesh, after the energy audit, the T&D losses shot up
from 19.2% to 33.3%. (I dont know, how it is exactly 33.3%). But in the subsequent years, this T&D losses started to miraculously improve, although there were no efforts to reduce them by investments for improving the T&D infrastructure. In fact, in this state, during the year when energy audit was undertaken (1996), the revenues actually shot up from 66% to 82% and then again began to decline. The reason for this shoot in the revenues is because during this year, HT and LT consumption increased significantly. But 1996 was neither a year when there was a spurt in industrial activities in AP nor did agriculture suffer any recession. Then why have agri figures
fallen and industrial power consumprion shot up??

Again, what made industrial power consumption figures to start falling down again in the subsequent years with a matching increase in agricultural consumption? The figures that are available in the official statistics of APTRANSCO shows that the power utilities are managing the statistics to show that we are net energy-deficit state and that agriculture sector is the main culprit!!!

Although we are power-deficit state, I dont think we are in a near-crisis like situation, which the power utilities want us to believe. By reducing T&D losses, much of the power crisis would simply evaporate. We are talking about losses as huge as 52% in Delhi, over a third in AP and so
on.....Instead of compromising on our economy on the premise that we have power crisis and let the European markets benefit, we should really begin to look at the problem in its right perspective. The truth is, our energy economy is case of bad management made worse by bad statistics. What we need is guts to ask the right questions and get the statistics corrected.
Probably, we might end up saying, "We really have no crisis of power".

Coming to wind power, I am afraid, the figures for potential are nowhere close to truth.

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Also read "Geothermal Energy Resources in India and its Utilization" By D. Chandrasekharam, Indian Institute of Technology, Mumbai.

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