26 °C Singapore, SG
November 28, 2024
Latest News
Corio Generation and bp Alternative Energy Investment Ltd invest in South Korea Australia missing climate targets Advocating for US based offshore wind Broken Record, Temperatures hit new highs, yet world fails to cut emissions (again) Toshiba and GE to shore up Japanese offshore wind domestic supply chain How I got here… National University of Singapore green finance academic Sumit Agarwal Multi-billion-dollar renewables project earmarked for Yindjibarndi native title land Smart Energy Finances: Enel divests 50% of Australian renewable operations to Japanese oil and gas giant Critical minerals investments surged by 30% finds IEA Kung Fu nuns fight climate change One of Southeast Asia’s largest energy storage systems comes online Why turning waste into gas will add value to this Indigenous economy Renewable energy records tumble around Australia as rooftop solar power soars Topsoe supports SGP BioEnergy in renewable fuels production in Panama ‘Poor tropical regions’ suffer greatest economic damage from worsening heatwaves UNEP: Meeting global climate goals now requires ‘rapid transformation of societies’ Analysis: Africa’s unreported extreme weather in 2022 and climate change Partly wind-powered coal ship sails into Newcastle New fossil fuels ‘incompatible’ with 1.5C goal, comprehensive analysis finds Australian offshore wind ‘supercharged’ in Victoria as billions pledged to fast-track projects Goldwind turbine ‘breaks world record for largest rotor diameter’, Chinese media reports BW Ideol to work with developer Taiya on Taiwan floating wind pilot US to boost floating wind power Wind Power in South Korea – an overview GS E&C to develop bioethanol using cassava waste Korean business group has asked the US to make exceptions for Korean EV’s in Inflation Reduction Act Equinor’s Australian offshore wind debut Global energy transition stalls – 2022 Global Status Report in pictures India’s ReNew Power secures $1bn loan for gigascale 24/7 wind-solar-battery project POSCO International to merge with POSCO Energy

Developers struggle to actually build low-cost wind farms in India

Remember those ridiculously low prices that developers bid for wind energy in India? Turns out building them will be more difficult than expected.

By Rajesh Kumar Singh, Bloomberg

More and more wind farms face delays in India as developers struggle to make their projects work in the world’s cheapest market.

About 2 gigawatts of wind power generation auctioned by the federal government since February 2017 is running behind schedule, according to BloombergNEF. That number has more than quadrupled since February, threatening to derail the nation’s renewable-energy ambitions.

Developers are having difficulty finding affordable land, getting financing and connecting to grids after accepting some of the world’s lowest green energy tariffs over the past two and a half years. On top of that hangs the uncertainty whether they will be paid on time by power distribution companies, known locally as discoms.

Related: India Renewable Energy Projects Face Payment Crisis: What is the Future of Past PPAs?

“With such low tariffs, projects can be viable only if they have access to low-cost funds, cheap land and inexpensive transmission infrastructure. Unfortunately all these three are found wanting for most wind projects,” said Prashant Khankhoje, a director at India Electron Exchange, a New Delhi-based power consulting firm. “The risk of delayed payments from discoms is another big issue, which makes lenders scared to lend to wind projects.”

Adani Green Energy Ltd., Torrent Power Ltd. and Renew Power Ltd. are among companies that have missed the targets. The three companies and the Renewable Energy Ministry didn’t respond to emails seeking comment.

India started auctioning wind projects in 2017, ditching a previous system that had feed-in tariffs for developers. The auctions saw aggressive bidding from developers, which led to a drop in prices.

The need to keep costs down amid the increasing competition also led to financial difficulties at some turbine makers, such as Suzlon Energy Ltd., impeding their ability to execute projects on time.

“Today we’re left with a handful of equipment suppliers, which has turned the industry from a buyers’ market to a sellers’ market,” said Vinay Rustagi, managing director at Bridge To India, a consultant to the renewables industry. “Developers have lost the bargaining leverage they need to make the project viable.”

Prime Minister Narendra Modi set a target in 2014 to install 175 gigawatts of renewable energy capacity by 2022. As the nation approaches that goal, Modi this year announced a longer-term plan to install 450 gigawatts of renewable capacity as part of the country’s efforts to reduce the emissions intensity of its economy.

“That target looks extremely, extremely ambitious,” said Rustagi. “Until core issues of site availability, adherence to contracts and timely payments by discoms are resolved, developers would be wary of investing.”

Source

Leave a Reply

Your email address will not be published. Required fields are marked *