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首页文档碳中和资料研究报告从本地风能产业到全球出口中心：2023-2027 年印度风能市场展望（英文版）-全球风能理事会（GWEC） (1)

从本地风能产业到全球出口中心：2023-2027 年印度风能市场展望（英文版）-全球风能理事会（GWEC） (1)VIP专享VIP免费

GWEC.NET
FROM LOCAL WIND
POWER TO GLOBAL
EXPORT HUB
INDIA WIND ENERGY MARKET
OUTLOOK 2023-2027
Sponsor
GWEC.NET
3
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Copyright © August 2023
This document contains forward-looking statements. These statements are based on current views, expectations,
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Attribution
From local wind power to global export hub: India wind energy market outlook 2023-2027. Global Wind Energy Council
and MEC+, 2023.
Authors
Sidharth Jain (MEC+); Swarnim Srivastava (MEC+); Disha Sodani (MEC+)
Feng Zhao (GWEC); Martand Shardul (GWEC); Francis Jayasurya (GWEC); Anjali Lathigara (GWEC); Joyce Lee (GWEC)
Report Design
Aspire Design, New Delhi
Image credits
GWEC and partners
Acknowledgements
We express our appreciation for providing insights and industry perspectives to this report to the following organisations:
Dafa Group; Danhydra; GE Renewable Energy; KK Wind Solutions; Nibewind; Nissens Cooling Solutions: Resolux; Rewair;
Synergy Green; TPI; Vena Energy; WEG; Windar Renovables
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GWEC.NETFROMLOCALWINDPOWERTOGLOBALEXPORTHUBINDIAWINDENERGYMARKETOUTLOOK2023-2027SponsorGWEC.NET3DisclaimerCopyright©August2023Thisdocumentcontainsforward-lookingstatements.Thesestatementsarebasedoncurrentviews,expectations,assumptionsandinformationoftheAuthors.TheAuthorsandtheiremployeesandrepresentativesdonotguaranteetheaccuracyofthedataorconclusionsofthiswork.Theyarenotresponsibleforanyadverseeffects,lossordamageinanywayresultingfromthiswork.PermissionsandUsageThisworkissubjecttocopyright.Itscontent,includingtextandgraphics,maybereproducedinpartfornon-commercialpurposes,withfullattribution.AttributionFromlocalwindpowertoglobalexporthub:Indiawindenergymarketoutlook2023-2027.GlobalWindEnergyCouncilandMEC+,2023.AuthorsSidharthJain(MEC+);SwarnimSrivastava(MEC+);DishaSodani(MEC+)FengZhao(GWEC);MartandShardul(GWEC);FrancisJayasurya(GWEC);AnjaliLathigara(GWEC);JoyceLee(GWEC)ReportDesignAspireDesign,NewDelhiImagecreditsGWECandpartnersAcknowledgementsWeexpressourappreciationforprovidinginsightsandindustryperspectivestothisreporttothefollowingorganisations:DafaGroup;Danhydra;GERenewableEnergy;KKWindSolutions;Nibewind;NissensCoolingSolutions:Resolux;Rewair;SynergyGreen;TPI;VenaEnergy;WEG;WindarRenovablesFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-20274GWEC.NET5AboutMEC+MEC+,alsoknownasMECIntelligence,isaspecialistconsultingfirmfocusedonthewindandrenewablessectorforthelast10years.MEC+comprisesahighlyskilledteamofconsultantswithadeepunderstandingofturbinetechnology,integrationopportunitieswithbattery,hydrogen,projectsupplychainsinoffshoreandonshorewind,powermarketdesign,financing/bidding/PPAstructuringandregulatorymarket.MEC+engageswithassetownersandsupplychaincompaniesontheirinvestmentandgrowthdecisions.Thesupportprovidedextendsfrombuildingbusinessplans,identificationandmitigationofrisks,andmanaginginnovationandsalesprocessesatclientorganisations.InIndia,MEC+hassupportedmultipleacquisitionsinthemarketonbothsupplychainandassetplatforms.MEC+alsooffersbiddingsupportandstrategybuildingforIndia.MEC+workswithgovernmententitiestobuildastrongcommercialunderstandingofareasrelatedtowindpower.WorkingwithGWECasaknowledgepartneronIndia,MEC+publishestheannualwindpowermarketoutlookandengagesinmulti-stakeholderdiscussionstopromotewindpower.OurclientsincludethelargestglobalwindOEMs,utilities,oilandgascompanies,Supplychainplayers,Equityfunds,andIndependentServiceProviders.Forfurtherqueries,pleasevisitwww.mecintelligence.comFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-20276AboutGWECTheGlobalWindEnergyCouncil(GWEC)istheglobaltradeassociationforthewindpowerindustry.Ourmissionistoensurethatwindpowerestablishesitselfastheanswertotoday’senergychallenges,providingsubstantialenvironmentalandeconomicbenefits.Weworkcloselywithnationalgovernments,policymakersandinternationalinstitutionstogivethemtransparentinformationaboutthebenefitsandpotentialofwindpower,enablingthemtomakeinformeddecisionsaboutnationalenergypolicies.ThemembersofGWECrepresentover1,500companies,organisationsandinstitutionsinmorethan80countries.Ourmembersarealsoallofthenationalwindindustrytradeassociations,frombothestablishedandemergingmarkets,includingtheworld’slargestmarketsoftheUS,alltheEuropeanmarkets,IndiaandChina.GWECisactivelyengagedwithemergingmarketstounlocktheirwindpotentialwithprovensuccessesinLatinAmerica,Africa,IndiaandalsoSoutheastAsia.GWECalsoworksatthehighestinternationalpoliticalleveltocreateabetterpolicyenvironmentforwindpower.WorkingwiththeUNFCCC,REN21,theIEA,internationalfinancialinstitutions,theIPCCandIRENA,GWECadvocatesforpoliciestohelpwindpowerreachitsfullpotentialinaswideavarietyofmarketsaspossible.GWECIndiawasestablishedin2020asasingleadvocacyandresearchbodyrepresentingtheentirevaluechainofIndia’swindindustry.GWECIndiaworkscloselywithgovernmentstakeholders,companiesandadjacenttechnologiestoacceleratethemomentumaroundwindpowerdevelopmentinIndiaandsupportthecountryinachievingitsambitiousrenewableenergytargets.Forfurtherqueriespleasevisitwww.gwec.netorcontactfrancis.jayasurya@gwec.net.GWEC.NET7ContentsTables,FiguresandBoxes8Abbreviations9Definitions11Foreword13ExecutiveSummary211.India’swindenergysector:Background252.India’swindpipeline293.Wind’spositioninIndia’senergytransition334.Lookingaheadtooffshorewinddevelopment395.TheonshorewindoutlookinIndia:2023-2027416.ExpandingtheIndiansupplychainfortheexportmarket457.Risinguptoglobalsupplychainopportunities518.Conclusionandrecommendationsforpolicymakers61Appendix67Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-20278Tables,FiguresandBoxesTable1:OnshorewinddemandandnacellesupplybenchmarkbetweenCY2023toCY203046Table2:Standardtaxesforwindturbinemanufacturing-IndiavsChina58Figure1:YoYonshorewind,solarandhybridinstallationsbetweenCY2015toCY202226Figure2:Standaloneonshorewind&hybridprojects-CentraltendersfromCY2019toCY202330Figure3:Standaloneonshorewind&hybrid-StatetendersbetweenCY2019toCY202331Figure4:LCoEforstandaloneonshorewindandsolarprojectsinIndiabetween2020to202834Figure5:StatusofgridavailabilityforonshorewindbyCY2027andCY203036Figure6:TotalRPOdemandbetweenFY2023toFY202737Figure7:IndiaOffshorewind-differentmodelsandplannedtrajectory40Figure8:ForecastYoYnewonshorewindinstallationsinIndiabetween2023to202743Figure9:YoYglobalwindinstallationbetweenCY2015to2022andforecastbetweenCY2023to202745Figure10:Globalwindkeycomponentsupplychainoverviewin202247Figure11:OEMwiseonshorewindinstallationdoneinCY2021andCY2022inIndia48Figure12:Globalproducttechnologyroadmapforonshorewindturbinesbytop10countriesasperforecastinstallations52Figure13:CostrangeofChinesevsIndianonshoreturbines54Box1:USCallsforCountervailingDutyonIndianWindEnergyOEMs53Box2:Capitalexpendituresonmaterialsforonshoreandoffshorewind55Box3:CostdifferentiationbetweenIndianandChinesecastingmanufacturing56GWEC.NET9AbbreviationsAMPCAdvancedManufacturingProductionCreditADAntidumpingdutyALMMApprovedListofModelsandManufacturersBCDBasicCustomDutyCYCalendarYearCUFCapacityUtilisationFactorCAPEXCapitalExpenditureCEACentralElectricityAuthorityCTUILCentralTransmissionUtilityofIndiaLimitedCMCTCityMaintenance&ConstructionTaxC&ICommercial&IndustrialCAGRCompoundAnnualGrowthRateCCDCConcessionalCustomDutyExemptionCertificateCOPConferenceofPartiesCITCorporateIncomeTaxCVDCountervailingDutyCRMACriticalRawMaterialsActDISCOMDistributionCompanyEUEuropeanUnionFYFinancialYearGWGigawattGWECGlobalWindEnergyCouncilGSTGoodsandServicesTaxGUVNLGujaratUrjaVikasNigamLimitedIPPIndependentPowerProducerINRIndianRupeeIRAInflationReductionActIEAInternationalEnergyAgencyIGSTInterstateGoodsandServicesTaxISTSInter-StateTransmissionSystemkWhKilowatt-hourLATAMLatinAmericaLCOELevelisedCostofEnergyL1LowestpriceMWMegawattMEISMerchandiseExportsfromIndiaSchemeMNREMinistryofNew&RenewableEnergyMOPMinistryofPowerNIWENationalInstituteofWindEnergyNTPCNationalThermalPowerCorporationOWOffshoreWindOEMOriginalEquipmentManufacturerPLFPlantLoadFactorPPAPowerPurchaseAgreementPGCILPowerGridCorporationofIndiaLimitedPLIProductionLinkedIncentiveRoDTEPRemissionofDutiesorTaxesonExportProductsSchemeRERenewableEnergyRPORenewablepurchaseObligationRfSRequestforSelectionRLMMRevisedListofModels&ManufacturersRTCRound-the-clockSECISolarEnergyCorporationofIndiaLimitedUKUnitedKingdomUSAUnitedStatesofAmericaUMCTUrbanMaintenance&ConstructionTaxVATValueAddedTaxWTGWindTurbineGeneratorYoYYearonYearFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202710GWEC.NET11Decarbonisation‘Decarbonisation’tendstorefertotheprocessofreducing‘carbonintensity’,loweringtheamountofgreenhousegasemissionsproducedbytheburningoffossilfuels.Generally,thisinvolvesdecreasingCO2outputperunitofelectricitygenerated.HybridProjects/tendersEnergyprojectsthatusetwoormoreenergysourcesforpowergeneration.Forexample,SECIHybridProjectsusesolarandwindincombinationNetZeroAtargetofcompletelynegatingtheamountofgreenhousegasesproducedbyhumanactivity,tobeachievedbyreducingemissions.RenewablePurchaseObligation(RPO)UnderSection86(1)(e)oftheElectricityAct2003andtheNationalTariffPolicy2006,Renewablepurchaseobligation(RPO),isamechanismbywhichtheobligatedentitiesareobligedtoapurchasecertainpercentageofelectricityfromRenewableEnergysources,asapercentageofthetotalconsumptionofelectricity.DistributionLicenseeAlicenseeauthorisedtooperateandmaintainadistributionsystemforsupplyingelectricitytotheconsumersinhisareaofsupply.SupplyChainAsupplychainisanetworkofindividualsandcompanieswhoareinvolvedincreatingaproductanddeliveringittotheendusercustomersorotherbusinesses.Pipeline/pipeliningPipeliningisanongoing,continuousprocessinwhichnewinstructions,ortasks,areaddedtothepipelineandcompletedtasksareremovedataspecifiedtime.CalendarYearTheperiodoftimebeginningonJanuary1andendingonDecember31ofeachyear.FinancialYearFYisa12-monthaccountingperiodstartingfromApril1andendingonMarch31ofeachyear.BasecasescenarioThebasecasereferstoafundamentalorstandardscenariothatisusedasastartingpointorreferenceforanalysis,decision-making,orevaluation.Itrepresentsthemostlikelyorrealisticsituationbasedontheavailableinformationandassumptions.Thebasecaseservesasabenchmarkagainstwhichotherscenariosorvariationscanbecomparedorassessed.AmbitiouscasescenarioAnambitiouscasescenarioreferstoasituationorprojectionthatassumesfavourableorpositiveoutcomes.Itisabest-caseorhighlypositive.Itrepresentsanidealisticviewofthefuturewiththebeliefthatconditionswillbehighlyfavourableandresultinthebestpossibleoutcomes.ConservativecasescenarioAconservativecasescenarioreferstoasituationorprojectionthatassumesunfavourableornegativeoutcomes.Itrepresentsacautiousorscepticalviewofthefuture,withthebeliefthatcircumstanceswillbechallengingandresultintheleastfavourableoutcomes.DefinitionsFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202712GWEC.NET13BenBackwellCEO,GlobalWindEnergyCouncilForewordAstemperaturesreachrecord-highsaroundtheworldthisyear,thereisgatheringmomentumamonggovernmentsfortheglobalenergytransition.Globalrenewableenergycapacitymusttriplebytheendofthedecadetoatleast11TWtokeepa1.5°Cwindowalive.Thiscallsforanunprecedentedaccelerationoflarge-scalewindandsolarpowertomitigatethemostharmfuleffectsofclimatechange.Internationalleadershipandcooperationwillbecriticaltoachievingthis2030goal.Thisyear,IndiapresidesovertheG20groupingofthelargesteconomiesoftheworldrepresenting85%ofglobalGDPand80%ofglobalcarbonemissions.Inthisrole,Indiacanconvenecountriesaroundthesharedneedtoscaleupwindenergy,whichisalreadytransformingcommunitiesaroundtheworldwithcleanelectricity,greenjobsandaninfluxofpublic/privatecapitaltopropeleconomicgrowth.Itmustbeclearlyunderstoodthatrenewablesarenotonlythebestsolutionwehavetofightclimatechange,butalsotodrivesustainabledevelopmentandindustrialpolicy.GloballeadershipintheenergytransitionmustbeginathomeforIndia.Alreadythefourth-largestwindmarketintheworld,Indiahastremendouspotentialtoexpanditsdomesticwindcapacity.High-leveltargetshavebeensettoreach500GWofrenewableenergycapacityby2030,including140GWofwindenergy.Butrecentannualgrowthhasbeendampened,averaging1.74GWoverthelastfiveyears,duetobottlenecksaroundgrid,downwardpricepressureandlandavailability.Asthisreportdemonstrates,policycorrectionscouldenableanambitiousscenarioofmorethan26GWinwindinstallationsoverthenextfiveyearsthrough2027.Authoritiesarealreadytakingpromisingstepstorealiseafasterpaceofgrowth,suchasrevisingthewindtendermechanismfromareverse-biddingmodeltoaclosed-envelopemodelearlierthisyear,andpublishingaclearroadmapforannualauctionsin2024splitbyagencyandquarter.ThestrengthofIndia’sdomesticmarketwillinturndeterminewhetherthecountryemergesasapowerplayerinthewindindustry’sglobalsupplychain.Giventheexpansivegrowthforwindpowerahead,GWECforeseesthatglobalsupplychainconstraintswillmaterialisefrom2026onward,duetoagapbetweenthesector’sproductioncapacityandforecastdeploymentpipelines.IndiacanplayacriticalroleheretorampupmanufacturingandexportofwindcomponentstosupplytheindustryinAsiaandbeyond.Meanwhile,ongoinginternationaldynamics–geopoliticaltensions,aninflationaryenvironmentandFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202714thelessonslearnedfromthepricespikesandbottlenecksofthepandemic–havepromptedcountriestoundertakeastrategicshifttobolsterlocalrenewableenergysupplychains.IndustrialpackagesliketheUSInflationReductionActandtheEUGreenIndustrialDealaredesignedtostrengthenlocalsupplychaininvestmentandre-shoreproductionactivity.Againstthisbackdropofevents,Indiahasplentyofcomparativeadvantagesasawindindustryhub,suchasanexistingmanufacturingbase,favourablelocationforexportandrelativelyattractivecostoflabour.ButtocapitaliseonIndia’swindpotentialathomeanditsopportunitiestobecomeaglobalsupplychainpower,afewkeyactionswillbeneeded:1.EnablethegreenopenaccessmarketfortheC&Isegment,toensureeconomicroutesforenergy-intensiveuserstoaccessgreenelectricity.2.Prioritisetheresolutionofoperationalandgrid-relatedchallengeswithsupportforbothISTSandnon-ISTSprojectsbystategovernmentsthroughawin-winpartnershipamongkeystakeholders.3.EnsurecomplianceofthewindRPOtosupporttheuptakeofwindpower,andaggregatetrajectoriessetbystatestooveralltargetsofthecountry.4.Considerlogisticscorridorsandindexationtoeasesupplychainchallengesinprojectimplementation,andaccountforcommoditypricefluctuationtosupportthetimelyandcost-efficientcommissioningofprojects.5.PromotedomesticinnovationinwindmanufacturingthroughinnovationandR&Dgrants.Atargetedproductionlinkedincentive(PLI)schemeforthewindsectorcouldalsoincentiviseinvestmentincomponentstoincreasetheverticalintegrationofthedomesticmanufacturingindustryandimprovequalityoflocallysuppliedcomponents.6.Lowerimportdutiesonrawmaterialandwork-in-progressgoodsforthewindsectortocreateamoreregionallyandgloballycompetitivecostofmanufacturingforIndiainthewindindustry.ItwouldalsohelptoeasedocumentationandapprovalsforthedutydrawbackschemeandleverageFreeTradeAgreements(FTAs)todesignandimplementwindexportscorridorsfordomesticmanufacturers.7.NurtureanoffshorewindecosysteminGujaratandTamilNadutosetthefoundationtoachievetheGovernmentofIndia’sseabedleasetendertrajectoryof37GWinthisdecade.Thisyear’sreporttheme–“Fromlocalwindpowertoglobalexporthub”–conveysthestrategicopportunitieswhichIndiacanseizeifenhancedgovernmentambitionandastrongplanforimplementationareinplace.Scalingupthetransitionathomecanthendemonstratethetransformativesocial,environmental,industrialandeconomicbenefitsbroughtbywindandrenewableenergytootherG20membersandcountries.IheartilyexpresscongratulationstotheGWECandMEC+teamsforthistimelyandrelevantreport.Finally,IextendGWEC’ssupporttotheGovernmentofIndiatohostasuccessfulG20Leaders’Summitlaterthisyear,andrealiseitsrenewableenergyambitionsinthisdecade.GWEC.NET15Astheplanetcontinuestowarmandextremeweatherconditionsbecomemorefrequent,theneedforradicalcollectiveactionstobendtheemissionscurvecannotbeemphasizedenough.Inthisspirit,thethemeofIndia’sG20Presidency,“VasudhaivaKutumbakam”or“OneEarth·OneFamily·OneFuture”,isanimplicitmessagetobuildgreaterglobalconsensusforclimateaction,includingclimatechangemitigation.AspertheIRENAEnergyTransitionsOutlook2023,inthe1.5degreescenario,globalinstalledpowergenerationcapacitymusthave77%and94%ofrenewableenergyin2030and2050respectively.Theglobaldeploymentofrenewableenergysourcesincludingwindenergymustincreasemulti-fold.IRENAhasprojected2040GWofonshorewindand500GWofoffshorewinddeploymentbytheendofthisdecade.EarlierGWEC’sGlobalWindReport2023,emphasizedthehistoricmilestoneof1TWofglobalwindpowerdeploymentreachedthisyear.AnotherTWislikelytobeachievedwithinthisdecade.Translatingtheseprojectionsintorealityimpliesproactivepolicymakingthatwillenablefast-pacedtendering,commissioningofprojectsandagreatersupplychainreliance.UndertheleadershipofHon’blePrimeMinisterNarendraModiJi,Indiahasundertakendecisivemeasuresforenhancingtheshareofrenewableenergyinthegenerationmix,includingwindenergywhichcurrentlyaccountsforslightlymorethan10%ofthecountry’soverallpowergenerationcapacity.In2023,thecentralgovernmentnotifiedatrajectorytoauction10GWofannualwindcapacityforthenextfewyearsthisdecade.TheMinistryofPowernotified“GuidelinesforTariffBasedCompetitiveBiddingProcessforProcurementofFirmandDispatchablePowerfromGridSumantSinhaChairpersonGWECIndia,andFounder,ChairmanandCEO,ReNewConnectedRenewableEnergyPowerProjectswithEnergyStorageSystems”inJune2023.Thecentrealsoreleasedaroadmapforstrengtheningtheavailabilityofthegridnetworkforrenewableenergycapacityadditioninthisdecade.ItisworthcommendinghowtheMinistryofNewandRenewableEnergy(MNRE)hasconsistentlybeenholdingmonthlymeetingswithcentral,stateandindustrystakeholderstoaddressissuesaswellastotakefeedbackinordertoacceleratedeploymentofwindenergyprojects.ThiseditionoftheIndiaWindEnergyMarketOutlook2023-2027stressestheneedforacceleratedeffortsbytheindustryandthegovernmenttoachievethe2030target.Ascomparedtothe140GWtarget,severalagencieshaveprojectedthelikelihoodof100GWofcumulativecapacityduetovariousreasonsthathavebeendiscussedinthisedition.TheOutlookalsopressesForewordFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202716foragreaterbalancebetweenmanufacturingfordomesticandexportmarkets.Thereisaneedforfacilitatingtargetedincentives,forexampletothecastingssegment,forqualityupgradationaswellascapacityenhancement.GlobalWindEnergyCouncil’sGlobalWindReport2023hasalreadyindicatedlikelihoodofsupplychainshortfallsintheUSandEurope,andthatthesparecapacityintheindustrybeingexhaustedby2026iftimelycorrectivemeasuresarenotundertakenthroughconsensus-building.Arenewedpolicyenvironment,likelihoodofdiversificationofwindactionsacrosshigh-potentialstatesandathrustondecarbonizationintheC&Isegmentsarecertainlyreasonsforrenewedoptimism.Together,windenergycapacityadditionandscale-upofmanufacturingcapacitiesshallfurtherdrivejobcreationandinvestmentopportunitiesinthecountry.IcongratulatetheGWECIndiaandtheMEC+teamsforyetanotherenrichingandrelevanteditionoftheOutlookwhichspellsoutprioritiesforthewindsectorinIndiaandpresentsacomprehensivepictureofinterventionsthatmustbeconvenedcollaborativelytodrivesub-national,national,regionalandglobalcleanenergytransitionpriorities.GWEC.NET17India’swindpowerindustryispoisedtoharnessanumberofopportunities.Theprospectsofgrowthinthedomesticmarketandshiftintheinternationalsupplychainrequirements,provideanopportunityforIndiancompaniestoincreasetheirparticipationintheglobalsupplychain.Domesticvolumesareontheup,andpolicymeasuresareinlinewithadvocatedchangesIn2022,theIndianmarketexhibitedarobustexpansionwiththeawardof4.7GWtendersincludingstandalonewindandwind-solarhybridprojectsinstateandcentraltenders.BetweenJantoJune2023,nearly3.5GWtendershavebeenawardedandanother5GWhasbeenannounced.TheintroductionoftendersbybothcentralandstategovernmentagenciesandthehighengagementofC&Ideveloperspointtowardspromisinggrowth.Thegovernmentpolicyhasemergedsupportiveoftherequirementsofdevelopers.ThecentralgovernmenthasannouncedaRenewablePurchaseObligation(RPO)trajectory,agridaugmentationplan,andvariousmeasurestoenhancepricinginwindtenders.Thissupporthasbeencomplementedbythestates’commitmenttowindprocurement–creatingatransparentandsustainablepipeline.Newgrowthpillarstowards2030areemerging,butshort-termexecutionchallengeforecastsThedevelopmentoftheoffshorewindmarketandthehydrogenecosysteminIndiaareemergingaskeydriversforgrowth.Together,theseadvancementslaythefoundationforavibrantindustry,settingthestageforatargetofcreatinga10GWmarketforwindinstallationsinIndiaby2030.However,ouranalysisadoptsamoreconservativeapproach,assomeofthesepoliciesarestillunderdevelopment,estimatingthemarkettoreachthe5GWrangeduetopotentialchallengessuchas:„DelaysthathappenintransmittingthecentrallevelpoliciestoDISCOMs„Localissuesthatsignificantlyimpactthecostofland,evacuation,andtransportationofturbinesalongwithhighcostsofequipment„IssuesregardinguniformityofopenaccessrulesIndiaisinafavorablepositionamongglobalsupplychainshiftsTheglobalemphasisonclimatechangehasincreasedthedemandforREprojects.ThelessonslearnedfromtheCOVID-19pandemichaveunderscoredtheneedtodiversifyandexpandtheexistingsupplychain.India,withitsstrategicgeopoliticalpositionandscale,hasbecomeaForewordSidharthJainFounderandCEO,MEC+Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202718primedestinationforglobalplayersseekingtoestablishamanufacturingbase.ThistrendislikelytostrengthenastheenablingecosystemdevelopsinIndia.Supplychainrequiresinfrastructureandscaletoemergeasoneofthetop2-3manufacturinglocationsgloballyTofortifythisopportunity,enhancingthesupplychain’scompetitivenessisparamount.Overrecentyears,domesticvolumeconstraintshavecompelledcompaniestopivottowardsexportofcomponents.Butasdomesticvolumespotentiallytriplefromathree-yearaverageof1.5GWto4-5GW,andthedemandfordiversifiedwindcomponentexportsgrows,thefocusmustshifttowardsreinforcingthesupplychain.Inthiseditionofthereport,wehavedelvedintothevariousissuesthatareonthemindofsupplychaincompaniesconsideringexportsandupgradeofcapabilities.Wepresentacomprehensiveoverviewoftheopportunities,thebarrierstosucceed,andwhyisnowthetimefortheindustry.Ourrecommendationsfortheindustryinclude:„Ensuringthatdomesticmarketexpandstoencouragehighvolumeandcompetitiveproductionoftier-2windcomponentsandrawmaterials„CreatingFreeTradeAgreementsandrefiningtaxanddocumentationprocedurestogetcompetitiveaccesstorawmaterialsandtechnologies„Improvingtheabilitytoaccesstotechnologyrequiredtobuildnextlevelmodels„ReviewingandimprovinginfrastructuretofacilitatethetransportationandstorageofthelargesizedcomponentsThroughacombinationofinsightfulanalysisandindustryfeedback,thisreportaimstoprovideanunderstandingofthewindpowertrajectoryinIndiaandtheavenuesavailablefortheindustry.Wehopeasyoudelveintothereport,yougetequippedtonavigatetherealities.GWEC.NET19Thepursuitofnet-zeroemissionsandthedriveforenergysecurityarepropellingtheglobalrevolutiontowardsrenewables.LeadingthismovementisIndia,thefourth-largestcountryintermsofrenewableenergycapacity.With42%ofitstotalenergycapacitycomingfromnon-fossilfuelsources,Indiahasfirmlyestablisheditselfasaleaderinadvancingthetransitiontocleanenergy.Thistransformationisunderpinnedbyacombinationofprogressivepolicysupport,robustpublic-privatepartnerships,andtherapidgrowthofIndia’smanufacturingcapabilities.Thegoalofachievingnet-zeroemissionsby2070isreshapingIndia’senergylandscape.Windenergyhasemergedasakeycatalystforgrowth,contributingasubstantial43GWtothecountry’senergyportfolioandregisteringatwo-foldgrowthrateinthelastdecade.ThissuccessunderscoresIndia’sincreasingprowessinwindenergymanufacturing.Thegovernment’srecentpolicyaimedatadding10GWofwindenergycapacityannuallyuntil2030hasfurtherprovidedsignificantmomentumtotheindustry.Theshiftfromthereversebiddingmechanismisalsoexpectedtoacceleratethepaceofinstallations.Moreover,theintegrationofgreenhydrogenproductionwithwindenergyhasopenednewavenuesforthesector’sadvancement.Buildinguponthesepositivedevelopments,thewindindustryisoptimisticaboutitspivotalroleinhelpingIndiaachieveitsclimateobjectives.Lookingtothefuture,newopportunitieswillacceleratetheprogressofthewindenergysector.India’sextensive7,600kmcoastlinepresentsanuntappedopportunityforoffshorewindenergy.Further,policyinitiativesaimedatestablishingrenewableenergyparkscanexpeditethesetupofnecessaryinfrastructure.Additionally,advancementsinlarge-scalebatterystorageresearcharecrucialtoaddresstheintermittentnatureofrenewableenergysources.IappreciatetheeffortsofGWECfordrivingrenewableenergyadvocacygloballyandinIndiainparticular.IcongratulateGWECandMEC+inreleasing“IndiaWindEnergyMarketOutlook2023-27,”whichprovidesacrucialoverviewandinsightsaboutwindenergyinIndia.Byfosteringstrongcollaborationbetweengovernment,industries,andinstitutions,wecanacceleratethewidespreadadoptionofwindenergy.TheupcomingdecadeoffersapivotalwindowfortheIndianwindindustrytotranslateintentionsintotangibleactions.Together,wecanmakesignificantstridestowardreachingthemilestoneofnet-zeroemissions!ForewordKaneXuChairman,EnvisionEnergyIndiaFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202720GWEC.NET21ExecutiveSummaryThelong-termgrowthandhealthofIndia’seconomywilldependonaccesstoclean,reliable,andaffordablepowerforall,aswellasastrongmanufacturingsectortosupporttherenewableenergyindustry.Thisyear’swindenergyoutlookoutlinesIndia’smultipledomesticandinternationalopportunitiestocapitaliseonwindmarketgrowthanddriveprogresstowardsthesegoals.India’swindmarketstatusandtrendsIn2022,Indiainstalled1.8GWofonshorewindcapacity–lowerthanthe2.2GWintheconservativecaseofthepreviouseditionofthisoutlookreport.Theshortfallwasduetonearly400MWofprojectcommissioningshiftingfromendof2022toMarch2023,duetogridreadinessandRightofWayissues.Thecapacityaddedduring2022isanincreaseof300MWfrom2021,andanincreaseof500MWfrom2020.ThisbringscumulativeinstallationsofwindenergyinIndiato41.9GW,asofDecember2022.Indiaissued10.4GWofwindandstandalonetendersin2022,ofwhich4.7GWwasawarded,including2.9GWfromcentralauctionsand1.8GWfromstateauctions.Thecentralpipelinefor2022couldhavebeenhigheriftheL1+2%criteriawaswaived,as700MWoftenderscouldnotbeawardedduetopricemismatchcriteria.Awelcometrendduring2022wastheinclusionofstatetendersintheabovepipelineafteralongtime–GUVNLandKeralaawardedstandalonewindtenders1andhybridtenderswereannouncedbyMadhyaPradesh,MaharashtraandDelhi.Theoutlookto2027AsoutlinedinSections4and5onthemarketoutlookforonshoreandoffshorewind,India’sactivewindpipelineattheendofJune2023stood1Keralatenderlatercancelled–60MWwindprojectbyKSEBLat12.9GW(includingstandalonewindandestimatedwindcomponentofhybridtenders),with10.7GWfromcentraltendersand2.2GWfromstatetenders.RenewablePurchaseObligations(RPO)ofDistributionCompanies(DISCOMS)andthecentralgovernmenttrajectorywilldrivethegrowthofwindinstallations.TheMinistryofPower(MoP)hasgivenanRPOtargettoDISCOMsofestimated57.5GWby2027;33.1GWisalreadyinstalledasof2022,leadingtoagapof24.4GWwhichneedstobefulfilledby2027.StateregulatorshavealreadysetanRPOtargetof19GW,againstwhichthestateDISCOMShavecommittedtoprocure17GWfromwindsofar.Thesenumberswillfuelfuturetendersandleadtofurtherincreaseofthepipeline.Togiveclarityonscale,during2023theMinistryofNewandRenewableEnergy(MNRE)announcedabiddingtrajectoryof50GWrenewableFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202722auctionsperyearuntilFY2028.Outoftheseauctions,10GWofexclusivetenderswerecarvedoutforwindanddesignatedimplementingagencieswithacalendarofimplementation.Planningisunderwayformulti-foldGWupgradeoftransmissioninfrastructure.Thegovernmentplanstotakeupthegridinfrastructureavailabletowindto111GWby2030.Outofthis,94GWisplannedtobemadeavailableby2027,34GWisalreadyunderconstructionand6GWisavailable.Combiningtheexistingpipelineof12.9GW,RPOobligations,bidtrajectoryannouncements,andgridplanning,India’swindmarketinlikelytoseeanupswingincomingyears.However,consideringthepastexperienceoftimetakentoalignpolicyandbudgets,projectdelays,issuesinRightofWay,andtightfinancingrequirements,delaysorevencancellationscannotbeentirelyruledout.ThetotalcumulativewindenergycapacityinIndiaby2027isexpectedtoincreaseto~63.6GWandcouldrangefrom59.3-68.1GW,dependingonseveralfactorsandconditionsacrossthisreport’sconservativecase,basecaseandambitiouscasescenarios.Intermsofoffshorewind,astrategypaperfromMNREin2022announcedplanstoaward37GWintenderstowards2030inthestatesofGujaratandTamilNadu.Therearethreemodelsforoffshorewinddevelopmentthathavebeenshared,whichareexploredinSection4ofthisreport.Developmentoftheoffshorewindmarketandanemerginghydrogenecosystemwillcomplementgrowthofthewiderwindindustry,andpropelwindintoamoresignificantroleinIndia’spowermixafter2030.ShapingIndiaintoaglobalexporthubforwindpowerCurrently,Indiahasanestimated11GWofannualnacellecapacity.Withcapacityadditionsofnearly5-6GWprojected,themarketwillstillhavesparecapacity,whichcanbetargetedtowardstheregionalandglobalwindFigureIOnshoreWindInstallationForecast&ScenariosGW26.2GW17.4GW21.7GWScenariodefinitionsConservativecaseBasecaseAmbitiouscase3.13.94.44.23.53.32.25.15.04.54.34.95.65.75.720232024202520262027Installations2023-27Highpacedscenarioduetowideningofdemandandsupplycomingfromtimelyexecutedpipelines,MOP'stargets,openingofstatedemandsandgridutilizationaswellashighactivityinC&ImarketRegularlypacedactivitiescomingfrom3-4GWoftenders/year,pipelineexecutionwithsomedelaysbutmajoritycompletion(duetowaivers)until2025andBAUactivitiesinC&ISlowpacedscenarioduetoslowuptakeofnewtenderscheme;withdrawalofISTSwaiverandpipelinecancellations;C&IgrowthatsamepaceNote:Aspercalendaryears;forecastsareinclusiveofhybridprojectsSource:StateAnnualRevenueRequirement(ARR)underTarifforderpublishedannually;RPOdocuments;Transmissionsystemforintegrationofover500GWREcapacityby2030;MEC+AnalysisGWEC.NET23market.Annualglobalonshorewindinstallationsarelikelytoincreasefrom69GWin2022to122GWin2027.Theincreaseof53GWinnacelleassemblyrequirementcanprovideopportunitiestobuildandexportnacellesfromIndia,particularlytoservetheUSmarketandnewwindgeographiesintheAsia-Pacific,AfricaandMiddleEastregions.Beyondnacelles,thereareattractiveopportunitiesincomponents.CompaniesareheavilyreliantonChinaforsourcingcomponents:Chinaaccountsfor60%,65%and75%ofglobalsupplychainforblades,generatorandgearboxmanufacturing.Indiaisinafavourablepositiontoexpandasitalreadyhasamanufacturingbasewhichprovidesnearly11%,7%and12%oftherespectiveglobalmanufacturingcapacityforthesecomponents.Giventhelessonslearnedinsupplychainsecurityfromrecentevents,includingtheCOVID-19pandemic,ongoingChina-UStradetensionsandgeopoliticalrisks,Indiacanservetomitigatesupplychainissuesforglobalmanufacturersasalocationforfriendlyshoring.However,challengesmustbeovercometoseizetheseopportunities.„Firstandforemost,Indianeedstocreateastrongandsustainabledomesticmarket;interactionswithindustrystakeholdersforthisreportreflectthatitisdifficulttoinvestinageographysolelyforexport,whenthatcountrylacksarobustdomesticmarket.„Second,Indiamustalignmanufacturingcapabilitiestooverlapwithglobalproductportfoliosandroadmaps.Whiletowersandbladesdemonstratesignificantoverlapwithglobalsizes,nameplatecapacityneedstorampuptoalignwithglobalplatforms.„Third,Indianeedstodemonstratecostleadershiptodevelopasaglobalexporthub.Indianturbinesare30-60%moreexpensivethantheirChinesecounterpartsinthesameproductclass.IndianturbineswithmajorityimportedcomponentsassembledinIndiaare30%moreexpensivethanthosemanufacturedinChina,whilelocallymanufacturedWTGscomewithafurther30%costpremium.Keyherearedifferencesinthecostofrawmaterialsandaccesstocomponents.„Last,Indianeedstomakeitsexportincentivesmoreaccessibletoboostexportorientation.Thecurrentincentivesforexportsaredifficulttoaccess;thewindindustryhashighlightedaminimum6-18-monthcycletosecurethedutydrawbackonthepaiddutiesforexportedmaterials.Thelengthydocumentationprocessandmulti-levelclearanceprolongtheprocessandimpactworkingcapital.Thesechallengescanbemitigatedasindustrialscaleincreasesandalignstotheregionalandglobaldemandsformanufacturing.Section8ofthisreportoutlinesseveralconcreterecommendationsforpolicymakerstoreinvigoratethedomesticwindindustryanddrivetowardsanambitiouscasescenarioforgrowth,aswellascreatetheconditionsforIndiatobecomeaglobalexporthub.AsIndiapushestowardsits2030renewableenergygoalanditslong-termtargetofnetzeroby2070,windpowerispoisedpropelthecountry’seconomicgrowthandcleanenergytransition.ThismomentumcanonlybestrengthenedifthegovernmentofIndiaundertakesaholisticstrategytoshoreuplarge-scaleinvestmentinthedomesticmarketwhileaccentuatingitscomparativeadvantagesfortheglobalexportmarket.Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202724GWEC.NET251.India’swindenergysector:BackgroundIndianeedstomeetitshigh-growthtargetsandclimategoalsAccesstoclean,reliable,andaffordablepowerforall,fromhouseholdstoindustrialconsumers,isimportanttoadvanceeconomicgrowth.Thismakestheavailabilityofadequatepowerinfrastructureimperativeforthelong-termhealthoftheIndianeconomy.India’selectricitydemandisexpectedtogrowataCAGRof~7%until20322,drivenbyfactorssuchasthepushfor‘MakeinIndia’,rapidurbanisation,andeconomicgrowth.TheGovernmentofIndiahasalsoannouncedanambitioussetofgoalsforclimatechangemitigationandthecleanenergytransitionduringthe2Reporton20thElectricPowerSurveyofIndia(EPS)–VolumeI,publishedinNovember2022COP26summitheldinNovember2021–“Panchamrit”,whichincludes3:„500GWofinstalledrenewableenergyby2030,whichincludes280GWofsolarpowerand140GWofwindpower;„50%ofenergyrequirementsfromrenewablesourcesby2030;„Thereductionintotalprojectedcarbonemissionsby1billiontonnesbetween2022and2030;„Thereductionofthecarbonintensityoftheeconomyby45%by2030;and„Achievingthetargetofnetzeroby2070.3NationalElectricityPlan(NEP)–VolumeI(Generation),publishedbyCEAinMarch2023Morethanone-thirdofIndia’selectricitycapacitycomesfromwindpowerBytheendof2022–witheightyearstogotoreachthesetargets–totalinstalledpowergenerationcapacity4inIndiastoodat410GW,outofwhich121GWwasfromrenewablesources(excludinglargehydro)amountingto~30%oftotalinstallations.Outofthetotalrenewableenergyinstalled,windcontributes35%(41.9GW,including9GWfromtheC&Isegment),secondtosolar5.ThismakesIndiathefourth-largestwindmarketintheworld,intermsofcumulativeinstalledcapacity.In2022,thetotalwindinstallationsaddedwere1.8GW(seeFigure4Ason31stDec2022,Indiainstalledcapacityofpowerstations(Utilities)–MonthlyreportpublishedbyCEA5Solarcontributes~52%(63.30GW)intotalrenewableenergyinstalled(Ason31stDec2022asperCEAmonthlyinstalledcapacityreport)1).Thiscontrastswithactivityinthesolarsector,whichinstalled12.9GWin2022andsawrapidYoYgrowthprimarilyduetotechnologicaladvancementsleadingtolowercosts.TorevitalisethewindpipelineinIndia,thegovernmenthasmadeaseriesofinterventionsin2022andearly2023.InJuly2022,MNREnotifiedtheMOPoftheRPOtrajectoryuntilFY2030,withaspecificcarve-outforwindRPOsincreasingfrom0.81%6inFY2023to6.94%inFY2030.Themovewasdesignedtocreateaseparatedemandbucketforwindfromotherrenewableenergysources.Tosupportthisschedule,theministryfurtherrevampedtheauctionmechanismforwind.InJanuary2023,thegovernmenteliminatedthereversebiddingmechanism7for6OnlyprojectscommissionedpostMarch2022tobequalifiedforwindRPO7MNREnotification:https://mnre.gov.in/img/documents/uploads/file_f-1673515455900.pdfFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-2027261.61.13.64.14.18.02.38.22.48.51.13.71.511.914.01.50.41.81.112.9HybridSolarWind20152016201720182019202020212022Adanicommissioned3hybridprojectsof1.5GWintotalin2022YoYonshorewind,solarandhybridinstallationsbetweenCY2015toCY2022GWNote:OnlyUtilityscalehybridprojectsareconsideredwhichincludesAdanigreenenergy3hybridprojectsinFY2022-HybridIIinRajasthanof600MW(September);TrancheIinRajasthanof390MW(May);AdaniRenewableEnergyHoldingNineteenPrivateLtd.of450MW(December)Source:CEAreport–AllIndiainstalledcapacityofpowerstations(Utilities);ReportonunderconstructionRenewableenergyprojectsbyCEA;CTUILreport2023;MEC+analysisFigure1:YoYonshorewind,solarandhybridinstallationsbetweenCY2015toCY2022GWGWEC.NET27onshorewindtendersandmovedtoasingle-stagetwo-envelopebiddingmechanismtoavoidaggressivebiddingcreatingextremedownwardpricepressureandutilisewindpotentialthroughstate-specificauctions8.Consequently,attheendofMarch2023,thegovernmentannouncedabiddingtrajectoryof50GWrenewableauctions9peryearuntilFY2028toachievethe500GWREtargetfor2030.Ofthese,10GWofexclusivetenderswerecarvedoutforwind10.MNREalsodesignated11SECI,NTPC,NHPCandSJVNasRenewableEnergyImplementingAgencies(REIAs)12forthisbiddingtrajectoryandoutlinedthecalendarforauctionsinFY2024byagency,quarterandtechnology.InQ1,2.5GWofwind8GuidelinesforTariffBasedCompetitiveBiddingProcessforProcurementPowerfromGridConnectedWindPowerProjectswasnotifiedon26July2023.9PIBnotification:https://www.pib.gov.in/PressReleasePage.aspx?PRID=191378910Notclearlystatedifitincludesonshoreonlyoronshore+offshorewind.11Officememo:https://mnre.gov.in/img/documents/uploads/file_f-1682405289970.pdf12GWEC’spublication“AcceleratingOnshoreWindCapacityAdditioninIndiatoAchievethe2030Target”,releasedin2022,pressedfor8-10GWofannualtenderanddesignationofpublicsectorentities,beyondSECI,foradministeringwindtenders.Thepublicationdiscussedslowdowninwindcapacityadditionduringthereverseauctionregime.tendersaretobeissuedbySECI13,whichhasspecifiedtheMaximumCapacitytobeawardedundertheRfSin5states(TN,KA,TS,APandMH).TappingintoIndia’sworld-classwindpotentialIndiahasanestimated214GWonshorewindenergypotential,withover30%CUFwhichmustbeexploitedtodriveclimateaction,energysecurity,andcleanenergyambitions.Therevisedtenderregimegivesarenewedthrusttothewindsectortotapintothisresourceandrecoverfromtheslowdownininstallationsexperiencedinrecentyears.13NoticeInvitingtender:https://www.seci.co.in/Upload/New/638209803994394872.pdfFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202728GWEC.NET29AsofJune2023,Indiahasapipelineof12.9GWprojectsawardedaswindstandaloneorwindcomponentofhybridprojects.Ofthisvolume,10.7GWarefromcentraltendersand2.2GWarefromstatetenders.RenewedinterestinrecenttendersIn2022,thetotaltendersissuedforstandalonewind&hybridprojectsstoodat10.4GW,higherthanthe9.2GWasofDecember2021.Outofthisvolume,whichincludedstandalonewindandhybridtenders,4.7GWtenderswereawarded.Thecentralgovernmentauctioned2.4GWoftenders14,15in2022forstandaloneinstallations,whichwereoversubscribedcontinuingthetrendfrom2021(seeFigure2).Outofthis,1.7GWwasawarded.Thegap14SECI1200MWISTSconnectedwindpowerproject–TrancheXII15RfSforsettingupof1200MWISTSconnectedwindpowerproject–TrancheXIIIbetweenauctionedandawardedcapacityisattributedtostringentcriteriaofL1+2%16,wherebidsabovethecriteriaweresimplyrejected.Easingthiscriteriawouldhaveledtoanadditional0.7GWinthepipeline.During2022,centralauctionsforhybridprojectssawasurgeofinterestfromdevelopers.Intheyear,5.7GWofhybridtenderswereannouncedofwhich1.2GWwasawarded.Thesewere:„SECI1.2GWISTSconnectedwind-solarhybridproject-TrancheV17wasannouncedandawarded.„RTCIII(2,250MW),PTCpanIndia(1,000MW)andSECITrancheIV-PeakPower(1,200MW)wereissuedin2022butnotyetawarded.16Undersubscribedtender–SECItrancheXIII1200MWISTSconnectedwindpowerproject17SECI1200MWISTSconnectedwind-solarhybridproject–TrancheV2.India’swindpipelineSECIannouncedtrancheXIVofwindof1.2GWinFebruary2023andNTPCannounced1GWwindprojectBoStenderinGujaratinJanuary2023.Further,toachievethetargetof10GWinwindtenderseveryyear,thecentralgovernmentissueditsfirstRfSinMay2023forsettingup2.5GWISTS-connectedwindpowerdividedintofivestates:TamilNadu,Karnataka,Telangana,AndhraPradesh,andMaharashtra.18Outofthe4.7GWofannouncedstandalonewindtendersin2023,onlySECIwindtrancheXIVhasbeenawardedfor0.7GWasonJune2023.Inadditiontothis,ahybridtender-SECIhybridtrancheVIof1.2GWwasawardedfullyinApril2023.18RfSforselectionofwindpowerdevelopersforsettingup2500MWISTSconnectedwindpowerprojectsinIndiaunderTariffbasedcompetitivebidding(TrancheXV)Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202730Figure2:Standaloneonshorewind&hybridprojects-CentraltendersfromCY2019toCY20234.220192020202120222023201920202021202220233.52.12.51.11.03.95.82.42.46.01.74.71.20.72.42.51.92.87.72.84.36.21.55.74.41.21.21.22.3StandaloneWind-TendersannouncedvscapacityawardedGWHybrid-TendersannouncedvscapacityawardedGWTenderissuedVolumesubscribedVolumeAwardedTenderissuedVolumesubscribedVolumeAwarded3142323241#ofauctions#ofauctionsNote:Totaltendercapacityforhybridprojecthasbeenconsidered,acualwindcapacityforhybridprojectsmightdifferent;TendersissuedtillMay2023areconsideredinCY2023:ForCY2023standalonewindtenderincludes22500MWISTSconnectedwindtenderandNTPC1GWwindtenderforwhichRfShasbeenissued,SECITranche-XIVof1200MWwasawarded:Incaseofhybridtendersin2022,4tendersincludingRTCIII(2250MW),PTCpanIndia(1000MW),SECITrancheIV(1200MW),HybridTrancheV(1200)hasbeenissued,butonlyHybridtrancheVwasawardedin2022:IncaseofhybridtenderissuedduringCY23,SECIhybridtrancheVIissuedinApril2023isconsideredSource:SECItenderresultannouncement;GWECauctiondatabase;MEC+auctiondatabase,MEC+AnalysisGWEC.NET31ExpandingstatetenderactivityforwindpowerOneofthekeytrendsin2022wasthere-openingofstatevolumes,largelymutedsincethestartofcentraltenders.Altogether0.5GWofstandalonewindand1.25GWofhybridtenderswereawarded(seeFigure3).In2022,onestandalonewindtender,GUVNL-500MW,wasissuedandawarded.Keralaalsoissueda60MWtender,ofwhichonly35MWwasawardedandlatercancelled19.Onthehybridfront,3statesissuedhybridtenderswhichtotalledto1.25GWin2022,andallwerefullysubscribed:MadhyaPradesh0.75GW20,Maharashtra0.25GW21andDelhi0.25GW22.In2023,Gujaratcontinuedthemomentumbyissuingtwomorestandalonewindtenders:GUVNLTrancheIVandVof300MWand500MWinJanuaryandMay2023.Gujarathasbeenissuingwindtenderssince2017,whileotherstatesbegantoreconsiderwindtendersin2022after19KSEBL–60MWwindproject,Kerala20RUMSL–750MWwind-solarhybridpowerprojects21MSEDCL–250MWhybridproject22TataPowerDelhiDistributions(TPDDL)–255MWhybridprojectFigure3:Standaloneonshorewind&hybrid-Totalstatetendersannouncedvscapacityawarded1.00.50.50.80.90.30.60.70.20.30.50.52019202020212022202330111.00.20.51.82.80.90.21.42.71.40.20.20.51.31.12019202020212022202311144TenderissuedVolumesubscribedVolumeAwardedTenderissuedVolumesubscribedVolumeAwarded2StandaloneWind–TendersannouncedvscapacityawardedGWHybrid–TendersannouncedvscapacityawardedGW#ofauctions#ofauctionsNote:Totaltendercapacityforhybridprojecthasbeenconsidered,actualwindcapacityforhybridprojectsmightdifferent;TendersissuedtillMay23areconsideredforCY2023:StandalonewindtenderissuedinCY23includesGUVNLTrancheIVandGUVNLTrancheVtenderwasissuedandawarded,butvolumeofboththetendersgotundersubscribed:HybridtenderofCY22alsoincludesGUVNLPhaseXVof500MWwhichwasissuedbutnotyetawarded:Understatehybridprojecttotal5tendersareissuedinCY23includingREMCLRTCPanIndia1000MW,CESCKolkata150MW,AEML1500MW,RUVNL1500MW(Cancelled)andWestBengalDISCOM150MWoutofwhichonlyREMCL(950MW)andCESC(150MW)hasbeenawardedbyJune2023Source:GUVNL;TANGEDCO;MSEDCL;RUMSL;TPDDL;REMCL;CESC;GWECauctiondatabase;MEC+auctiondatabase;MEC+AnalysisFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202732theintroductionofnationalwindRPOtargets.Thefocusofotherstatesonhybridtenderscontinuedin2023,whereinnearly4.3GWtenderswereissuedbyvariousbodies:Railways(1GWREMCL)andWestBengal(150MWCESC),Mumbai(1.5GWAEML)andRajasthan(1.5GWRUVNL)contributedtothesetenders.Ofthis,1.1GWwasawardedinREMCLandCESCWestBengal,whilethe1.5GWtenderfromRUVNLwascancelled.Thisshowsthattheevolutionoftenderconditionsandgovernmentsupportforhybridprojectshaveledtoincreasedstateauctionactivity.GWEC.NET333.Wind’spositioninIndia’senergytransitionIndianeedsaccelerateddeploymentandcommissioningofwindpowerprojectsifitisexpectedtoachieve140GWofwindcapacityby2030,andadvancetowardsthelong-termgoalofnetzeroby2070.ThethreemajordriversofwindgrowthinIndiaare:„Costcompetitivenessofwindintheoverallmix;„Dedicatedgridinfrastructureforintegration;„ComplianceofwindRPOtargetsbystatesandotherobligatedentities;and„AccelerationinC&Isectordemand.Whilethesewillpushonshorewindcapacityadditions,beyond2030progressonoffshorewindwillfurtherpropelwind’spositionintheoverallpowermix.WiththeincreasingpopularityofsolarandwindhybridprojectsintheC&Imarket23,penetrationofwindinthepowermixislikelytoincrease.However,arecentreport24fromtheCentralElectricityAuthority(CEA)indicatesthatamorecumulativeinstalledcapacityof100GWmightonlybeachievedby2030as23JindalSteelandReNewhavejoinedhandstocommissiona300MWhybridpowerplant;Amazonissettingupacumulative300MWwind-solarhybridprojectinMadhyaPradeshandKarnatakawithVibrantEnergy.TataPowerRenewableEnergyLimited(TPREL)andTataPowerDelhiDistributionLimited(TataPower-DDL)havepartneredtosetupahybridprojectwithanexpected340MWwindcapacity;Also,AmplusSolarandEverRenewhavebeenreportedtobuilda200MWpopen-accesswind-solarpowerplantinTamilNadu.TataPowerhasreportedthattheTataPowerRenewableEnergysubsidiaryhasreceivedaLetterofAwardtosetupa966MWRound-the-clock(RTC)HybridRenewablePowerProjectforTataSteel.Similarly,KPIGreenhasbeenreportedtohavereceivedaletter-of-intentforexecutingaWind-SolarHybridPowerProjectof40MW(with21.50MWwindpower)capacityfromAnupamRasayanIndia,Gujarat.AmpEnergyIndiaislikelytosetupa150MWhybridpowerprojectforCESCLimited.24ReportonOptimalGenerationMix2030Version2.0byCEA,publishedinApril2023comparedtothecentralgovernment’stargetofaddingacumulative140GWinstalledwindenergycapacityby2030.Inthemeanwhile,theNationalInstituteofWindEnergy(NIWE)hasreleased“India’sWindPotentialAtlasat150AboveGroundLevel”andhasmappeda1164GWoftechnicalwindpowergenerationpotentialinpanIndia.CostcompetitivenessofwindenergyinIndiaTheaveragecostofconventionalenergy-basedpowerisreportedlyhigherthanthepowertarifffromwind,makingwindpoweralreadycompetitivewithtraditionalpowersources25.However,windgenerationcostsinthecountryhaverecentlyincreased.25AcceleratingOnshoreWindCapacityAdditionsinIndiatoAchievethe2030Target,GlobalWindEnergyCouncil,2022.BidsforstandalonewindinTrancheXIVinJune2023wereawardedintherangeofINR3.18-3.24perkWhascomparedtotendersawardedin2020whichliesintherangeofINR2.99-3perkWh.Indiasawa~10-12%jumpingenerationcosts26ofwindprojectsbetween2020and2022,causingtheLCOEtoincreasefromINR2.8-3.3perkWhin2020toINR3.2-4.1perkWh.Thiscanbeattributedtorisingrawmaterialcostsinthesupplychain,includingsteel(whichcomprisesover70%ofrawmaterialusedforturbines)27andaluminium,logisticbottlenecks,aninflationaryenvironmentandfairlyhightaxesleviedonwindturbines.CombiningthiscostincreasewithvaryingCUFsbasedonthelocationofprojectsproducesarangeofLCOEforwindpower.26LCoEnumberisbasedonMEC+analysis.27CostofwindenergyReview2015,NationalRenewableEnergyLaboratory(NREL)Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202734ForaveragesiteslocatedatWindZonesII&III(WPDbetween250and400W/m2)28,anaverageCUFof~31%29and3.4MWwindturbinesgenerallycarriesanLCOEofINR4.1/kWh.ForthebestsiteslocatedatWindZonesIV(WPDabove400W/m2),aCUFof37%30wouldgenerallycarryanLCOEofINR3.2/kWhin2022.Thesolarsupplychainfacedsimilarpressuresin2022,primarilyduetoahikeinpolysiliconpricespost-2020owingtomanufacturingbottlenecksinChina.CertainpolicyinterventionsinIndia31andhighdemandforsolarpanelskeptpriceshighuntilQ12023.Aspolysiliconmanufacturinghasreturnedtonormallevels,thepriceofsolarcellsandmodulesisexpectedtodecline.Thedropinthecostofwindpowerislikelytobelessthanthatofsolartowards2028,asanexponentialdecreaseinthecostofsteelandaluminiumisnotforeseeninthenearfuture.Itisprojectedthatwindpower28WPD:WindPowerDensity,PetitionforseekingrevisioninwindzonebyMEDAwithrespecttowindpowerprojects29Lazard’sLevelisedCostofEnergyanalysis–Version15.0(Page10)30WindrepoweringinIndia:Potential,OpportunitiesandChallengesbyUSAID31MNREorderforALMMofSolarPhotovoltaicmodules2.82.43.22.42.43.02.32.82.22.53.32.94.12.83.92.73.72.63.43.120202022202420262028SolarWindSource:CasestudyonC&IwindsolarhybridplantbyJMKresearch;A100%renewablepowersystemacrossIndiaby2050studybyWartsilaandLUTUniversity;MultiplyingtheTransition:Market-basedsolutionsforcatalyzingcleanenergyinvestmentinemergingeconomiespublishedbyBNEF;MEC+LCoEModel;MEC+AnalysisLCoEforstandaloneonshorewindandsolarprojectsinIndiabetween2020-28INR/kWhFigure4:LCoEforstandaloneonshorewindandsolarprojectsinIndiabetween2020to2028INR/kWhcostswillremainaroundINR~3.4/kWhby2028(seeFigure4).Nevertheless,windremainswellpositionedagainstconventionalpower,ascoalplants’LCoEin2022reportedlyrangedfromINR5.2-6.2/kWhandexpectedtoremainintherangeofINR4.8-6.0perkWhtowards2028,duetosoaringcoalprices.ThisreflectsapromisingoutlookforwindpowerprojectsinIndia.GearingupgridinfrastructureforwindpowerThetotalgridavailabletowindpowerprojectsinIndiacomprises(a)gridcapacitythatisunderutilizedbecauseoftermination/non-executionoftenderedrenewableprojects;(b)gridcapacitythatisunderconstruction;and(c)gridcapacityadditionsthathavebeenplannedforaugmentation.Tosupportthewindpipeline,robustgridinfrastructureisrequiredtoensurethatcleanpowercanbeefficientlytransmittedtowhereitisneeded.Thecentralgovernmenthasundertakensignificantplanningaroundgridneeds.GWEC.NET35AsofApril2023,thereare6.4GW32ofmarginsavailableinISTSsubstationfornewgridconnection,wherewindresourceisabove6m/sat150mhubheight.Inadditiontothisexistingcapacity,governmenthasplannednewcapacityaugmentationforwindpowerprojects.Thisplancanbesegmentedinthreeparts:1.The66.5GWREcapacityintegration33planforISTSgridinfrastructure,plannedbyMNREin2018.AsonDecember2022,58GWofplannedgridcapacityisundervariousstagesofconstructionandisyettobeaugmented.Ofwhich,34GWisrelevantforwindprojectsgiventhewindresource.The34GWcapacityunder-constructioncomprise14substationsinthestatesofKarnataka,Gujarat,AndhraPradesh,Maharashtra,andTamilNadu.2.Thesecondpartofgridplanningisrelatedtorenewableenergyparksandzoneallocation,wherein55GWofcapacityisplannedforaugmentation.Within32Basedonasubstationforresourceabove6m/sat150mhubheightfromthemarginsavailableattheexistingISTSsubstation;seestatusofmarginsavailableatexistingISTSsubstationforproposedREintegrationason30thApril2023byPGCIL33https://cea.nic.in/wp-content/uploads/2020/03/1st_trans-1.pdfthisplan,12.6GWcapacityfromGujarat(KhavdaZone)andLehREparksarerelevantforwind3.Lastly,thelatestplanfromthetheCEA’s“TransmissionSystemforover500GWREcapacityby2030”report34,58GWofgridisplannedforwindevacuationtowards2030,dividedin24GWby2025,17GWby2027and17GWby2030;distributedacross6statesofRajasthan,AndhraPradesh,Karnataka,Telangana,MadhyaPradesh&MaharashtraforonshorewindandGujaratandTamilNaduforoffshorewind.34TransmissionSystemforover500GWREcapacityby2030.PublishedbyCEA,MinistryofPower,GovernmentofIndia.Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202736Figure5belowillustratesthebreak-downgridavailabilitybytimeperiodforwindpoweraugmentation.ItmaybeinterpretedthatanISTSgridcapacityof94GWmaybeavailableby2027andatotalof111GWofISTSgridcapacitymaybeavailableby2030,reflectingtheoverallstep-upFigure5:StatusofgridavailabilityforonshorewindbyCY2027andCY203034.012.617.017.024.06.436.6111.094GWExistingCapacityinISTSsubstationason30thApril2023Under-implementationgridplan(500GWREIntergrationplan)Newgridplanning(500GWREIntegrationplan)PartofREcapacityof66.5GWexistingplan-under-implementationExistingISTSS/scapacityforwindGridAvailabilitybetween2023-27AdditionalgridforwindbyMarch2025AdditionalgridforwindbyDecember2027AdditionalgridforwindbyDecember2030GridavailbilityforwindaugmentationbyDecember2030KhavadaREpark:8.6GWLehREpark:4GWNote:Substationabove6ms/sresourceat150mhubheighthasbeenconsideredunderexistingpipeline:Existingcapacityof6.4GWcomingfromPGCILS/savailablemarginsdatabaseshows,5.4GWofreadilyavailablepipelineandadditionof1GWwithICTaugmentationonKurnool:UnderthecategoryofREcapacityof66.5GWtobeintegratedtoISTSnetworkandmappingtheresourcesavailable;Total14S/sfallsintothecategoryandtheaugmentationgrantaccountsto34GW:Accountsforadditional13GWcomingfromKhavadaREpark:17.2GW(assuming50%windcomponent8.6GW)andLehREpark:4GWwind(from55GWaugmentationplanand24GWplanneduntilMarch2025from181GWaugmentationplan)Source:TransmissionsystemforIntegrationofover500GWREcapacityby2030reportbyMinistryofPower;ReportonoptimalgenerationMix2030version2.0byCEA;StatusonmarginsavailableatexistingISTSsubstationsforproposedREintegrationason30thApril2023publishedbyCTUIL;MEC+AnalysisPartofadditionalREcapacityof236.58GWtobeintegratedtoISTSnetworkStatusontotalgridavailabilityforonshorewindbyCY2030GWinalignmentbetweenanexpandedwindpipelineandgridinfrastructureplansofthecentralgovernment.GWEC.NET3733.157.517.02.057.524.4GWMOPtargetiscalculatedbasedonutilitydemandforecastdonebyEPSTotalwindinstalledinIndiaMar23BudgetedwindinstalledStateRPOwindinstallationMoPRPOtargetTotalRPOdemandforwindinstallationinDiscomsby20279GWdeductedduetoC&Iusage16StatesNote:Studyfor16statesincluding28discomswhohaveprocuredwindenergyfromSECIandstatebasedtenderssince2018:9GWinstalledwindbyC&IexcludedfromtotalwindinstallationstillDec2022:Calculatedbasedontotaldemandforecastedin20thElectricPowerSurvey(EPS)reportandwindinstallationof4.29%(MOPtarget)Source:SECI;GUVNL;MSEDCL;TANGEDCO;NTPC;MNRE;RenewablePurchaseObligation(RPO)andenergystorageobligationtrajectorytill2029-30;Reporton20thElectricPowerSurvey(EPS)inIndia(Volume–I);MEC+analysis5.4TotalRPOdemandbetweenFY2023to2027GWFigure6:TotalRPOdemandbetweenFY2023toFY2027ThewindRPOasademanddriverintheutilitysectorGrowinggridinfrastructurewillsupporttheincreaseddemandcomingfromtheRPOmechanismundercentralandstategovernments.InJuly2022,theMoP35announcedanewtrajectoryto2030withseparatewindRPOs–awelcomemovetoreignitewindpowerprocurementinIndia.TotalwindinstallationsinIndiastandat41.9GW36whichincludes~9GWofC&Iinstallations.Annualgrowthinthelastfewyearshasbeenrelativelyslow,averaging1.74GWfrom2018to2022.AccordingtostateRPOtargets,acapacityof17GWinthenextfouryearsislikelytobeadded(seeFigure6),whichmorethandoublestheannualinstallationrateto4.25GW.Intheconservativescenario,ifstatesexecuteontheircommittedrenewablepurchasecapacityfromannualplans,17.4GWofwindwillbeinstalledby2027.Additionally,ifstatesweretoaligntotheMoPtrajectory,newwindinstallationscan35RenewablePurchaseobligation(RPO)andenergystorageobligationtrajectoryuntil2029-30byMinistryofPower(MoP)publishedon22ndJuly202236IndiainstalledcapacityofpowerstationsbyCEAason31stDecember2022Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202738goupto24.4GWbetween2023-202737.Thiswouldmeananaverageannualinstallationofaround6.1GWforthenext4years,whichisthemostambitiouscase,andthiscouldleadtoatotalof57.5GWwindinstalledcapacityattheendof2027.Amongthe28statesand8UT,4states38haveadoptedtheRPOofMoP.Theprogressofthesewilldeterminewhethertheinstalledcapacitywillbehigherornot.DelhiwasthefirsttoissueanRPOtrajectoryuntil202639.ApartfromDelhi,inthestatesofRajasthan40andHaryana,therespectiveRegulatoryCommissionshavenotifiedwindRPOs.ThestateofBiharaswellhasmadeprogress37Calculatedbasedondemandprojectedinthe20thEPSreport(Volume–I)byCEAandmultipliedbywindRPOtrajectorysetbyMoPindocumentRPOandenergystorageobligationtrajectoryuntil2029-3038StatesandUTswhoseRegulatoryCommissionshavenotifiedwindRPOsareDelhi,Rajasthan,HaryanaandBihar.39https://www.derc.gov.in/sites/default/files/DERC%20DRAFT%20RPO%20%26%20REC%20Regulation%2C%202023_First%20Amendment.pdf40RajasthanElectricityRegulatoryCommission(RenewablePurchaseObligation)Regulations,2023.Accessedonlinefromhttps://rerc.rajasthan.gov.in/rerc-user-files/regulationson31July2023andHaryanaElectricityRegulatoryCommission(TermsandConditionsfordeterminationofTarifffromRenewableEnergySources,RenewablePurchaseObligationandRenewableEnergyCertificate)Regulations,2021,(2ndAmendment)2022.Accessedonlinefromhttps://herc.gov.in/WriteReadData/Pdf/R20230103.pdfon31July2023.onthisfront41.Hence,bothwindpowergeneratingandnon-windpowergeneratingstateshavemadeprogressonthewindRPO.DemandfromtheC&ImarketforwindWindinstallationsinIndiastartedonbackofcorporateprocurementmechanismbackin90s.However,giventhelowerperuniteconomicsofsolarascomparedtoonshorewind,solarhasnowbecomethefirstchoiceofC&Iprocurerstolowertheirelectricityoverheadsandoffsetcarbonemissionsthroughleastcostpathway.In2022,~300MWofwindwasinstalledintheC&Isector,significantlyhigherthan~100MWin2021,however,inthesameperiod,3.4GWofsolarwasinstalledin2022and~700MWin202142.ThenumbersindicatethepreferenceofC&Iconsumerstowardssolarinstallations.41“BiharElectricityRegulatoryCommission(RenewablePurchaseObligation,itscomplianceandRECFrameworkImplementation)(4thAmendment)Regulation2022.Accessedonlinefromhttps://berc.co.in/orders/other-orders/2670-suo-motu-proceeding-for-4th-amendment-of-berc-renewable-purchase-organisation-its-compliance-and-rec-framework-implementation-regulations-2010-regulations-2010-4on31July2023.42Mec+C&IprojecttrackerPositiveundercurrentsarevisibleinthemarket,indicatingthere-emergenceofwindasthepartofportfolioofcorporatepowerprocurement.In2022,multiplecorporatesindicatedtheneedofround-the-clockpower,includinga1GWtenderfromIndianrailwaysforsupplyofround-the-clockREpowerwithcombinationofwind,solarandenergystorage.Additionally,nearly2.3GWofpipelineforhybridprojectsinvisibleinthemarketcurrently,whichcanbecalculatedtobe700MWto1GWofwindprojectpipelineforthesector.MultipledriversarevisibleforuptakeofwindintheC&Isectorincluding:„SaturationofC&Iconsumerswith20-30%powerconsumptioncomingfromsolar,expansionbeyondwhichisdifficultwithoutstorageorsupportivebankingregulations;„Centralgovernment’seffortstoaligntheregulationsandchargesacrossstatesthroughGreenEnergyOpenAccessregulations;„India’sfocusongreenhydrogenandothergreenderivatives,whichwillopenupdemandforround-the-clockpower,withamajorroleforwind;and„Openingofmultiplerevenuestreamsfordevelopersinopenaccessmarket,includingexchange-basedproducts,aswellastertiary43andsecondaryreserveancillarymarkets44.Butsensitivitytostatelevelcharges,regulations,andcontinuouswithdrawalofwaivers,bankingprovision,especiallyforvanillawindprojectswillkeeptheC&Ioutlooklumpy.Despiteahugepotential,themarketcanswingbetween200MWto700MWinthecoming5years,unlessC&Iconsumers’needsbecomemorespecifictowindgenerationneeds.43DetailedProcedureforTertiaryReserveAncillaryService(TRAS)https://testancillary.grid-india.in/assets/files/TRAS%20Detailed%20Procedure%20April_2023_Final_Website.pdf44CentralElectricityRegulatoryCommission(AncillaryServices)Regulations,2022https://cercind.gov.in/Regulations/Ancillary-Service-Regulations-2022.pdfGWEC.NET394.LookingaheadtooffshorewinddevelopmentGlobally,Indiaranksfourthininstalledonshorewindenergycapacity45.Whileonshorewindpowerhasbeenabackboneofthecountry’sREjourney,thereisnowgrowingdomesticandinternationalappetitetotapintoIndia’ssignificantoffshorewindresource.Harnessingthefullpotentialofoffshorewindenergywillbeneededtoleverthecountrytowardsitsnetzerotargetby2070.AstrategypaperreleasedbytheMNREinJuly2022announcedthetrajectorytoaward37GWofoffshorewindtenderstowards203046inthe45GlobalWindEnergyCouncil:GWECdatabase46StrategypaperforestablishmentofoffshorewindenergyprojectsinIndiapublishedbyMNREin2022statesofGujaratandTamilNadu.Thestrategyincludes:47ThreemodelsofoffshorewinddevelopmentinIndia„Model1(1GW):PPAawardalongwithexclusiveleaseawardbasedonquotedtariff/VGFrequirementbidforGujaratZoneB3.„Model2(dividedintomodels2Aand2B):Model2A(24GW)isfornon-exclusiveleaseawardona‘first-come-first-served’basis,forconsequentprocurementbythegovernmentthroughPPAs.Model2(nostatedvolume)isfornon-exclusiveleaseawardrightsona47TheauthorsnotethataRevisedOffshoreWindStrategypaperwasreleasedon17August2023;theanalysisinthissectionisbasedonthepreviousversionofthestrategypaper,andnottherevisedversion.‘first-come-first-served’basis,forcaptive/open-accesssales.„Model3(12GW):Exclusiveleaseawardbasedontheleasefeebidforcaptive/openaccesssales(nogovernment-backedPPA)forTamilNadu.AsshowninFigure7,1GW,24GW,and12GWcapacitiesareplannedtobeauctionedundermodels1,2A,and3,respectively.However,lookingattherecentdevelopmentsintheoffshorewindareasinIndia,noneofthecapacitieswillcomeonlineinthisreport’sforecastperiodof2023to2027.Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202740Figure7:IndiaOffshorewind-differentmodelsandplannedtrajectory4321115512444FY23FY24FY25FY26FY27FY28FY29FY3044555Model1Model2AModel3IndiaOWbiddingmodelsModel22AModel1Model31GW24GW12GW2BMNREnotifiedatrajectoryforbiddingoutOffshorewindenergyblocksfromFY23toFY30,cumulatingto37GWinJune3modelsofOWdevelopmentaresuggestedinthestrategypaperIndiaOWStrategypaperPPAawardalongwithexclusiveleaseawardbasedonquotedtariff/VGFrequirementbidNon-exclusiveleaseawardon‘first-come-first-serve’basis,forconsequentprocurementundermodel1Non-exclusiveleaseawardrightson‘first-come-first-serve’basis,forcaptive/open-accesssalesExclusiveleaseawardbasedonleasefeebidforcaptive/openaccesssalesNote:VGF–ViabilityGapFundingSource:StrategyPaperforestablishmentofoffshorewindenergyprojects;MEC+analysisGWEC.NET415.TheonshorewindoutlookinIndia:2023-2027WindinstallationsinIndiabetween2023to2027areforecastinthreedifferentscenarios:„Ambitiouscase:High-pacedscenariowithtotal26.2GWinstallations.AccelerationdrivenbyalignmentofstateRPOstoMOP’sRPOtargets,openingwiderdemandforwind,aswellasaccelerationinC&Irelatedwindinstallationswithcorporateslookingtoexpandbeyondpuresolarandmoreloadfollowinggeneration.„Basecase:Normal-pacedscenariowith21.7GWofinstallationsdrivenbyexistingpipelineandcontinuedcurrentpaceoftenderawardat3-4GWofnewcapacityawardannually.Thescenarioexpectsapeakintheinstallationsintheyear2025,duetotaperingoffoftheISTSchargewaiverstartinginJune2025.Inthescenario,C&Iinstallationsrelatedtowindalsoscaleupfromcurrentlevels,althoughslowerthanambitiousscenario.„Conservativecase:Slow-pacedscenarioestimating17.4GWinstallations,whereinthemarkettakessometimetoadjusttothenewmechanismforbiddinganddemandforwindsuffersasetbackduetoincreasedpriceofwinddiscoveredintenders.AsforC&Irelatedwindinstallations,ahigherpriceofwindthansolarcontinuestodeterscale-upandthemarketremainsatcurrentpace.Inthebasecase,Indiaisexpectedtoinstall21.7GWby2027.Thisinstallationratecouldgoupto26.2GWintheambitiouscaseanddownto17.4GWintheconservativecase(seeFigure8).AmbitiouscaseanalysisIntheambitiousscenario,Indiainstalls26.2GWofonshorewindbetween2023and2027,reaching68.1GWonshorewindcapacityby2027.The26.2GWcanbesegmentedinto23.4GWcomingfromcentralandstatetendersand2.8GWfromtheC&Isectorwindinstallations.Ofthevolumecomingfromcentralandstatetenders,12.5GWisfromexistingpipeline(including400MWcancellations)and10.9GWfromnewtenderawards.ThescenarioanticipatesaccelerationinthetenderactivityonbackoftheFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-20274210GW48trajectoryannouncedbythecentralgovernment,leadingtohigherandfasternewpipelinecreation.Althoughthescenario,doesnotanticipatedsuccessful10+GWawardannually,itdoesassumeanaccelerationintenderactivitytoaward10.9GWin2023and2024,allofwhichcomesonlineby2027.Inordertoachievethescenario,itiscriticalforstateRPOtrajectoriestoalignwiththecentralMOPRPOtrajectory,takingthedemandto24.4GWforwindprocurementuntilDecember2027.Outof26.2GWadditionsinthescenario,C&Iisexpectedtocontribute2.8GWofinstallations,increasingfrom300MWin2023to700MWperyearin2027.Theopeningofvoluntaryofftakersforgreenpowerneedsandglobalrenewableenergycommitmentsremainscrucialforachievementofthisscaleofactivity.BasecaseanalysisInthebasecase,Indiaisexpectedtoinstallnearly21.7GWofwindcapacitybetween2023and2027,48AcceleratingOnshoreWindCapacityAdditionsinIndiatoAchievethe2030Target,GlobalWindEnergyCouncil,2022.reachingcumulativeinstallationof63.6GWattheendofDecember2027.Ofthenewinstallations,19.4GWisexpectedtobecontributedbycentralandstatetenderswhilenearly2.3GWisfromC&I-relatedwindinstallations.Outofthe19.4GWcapacityfromcentralandstatetenders,thescenarioassumessuccessfulexecutionofthe12.5GWexistingwindpipelineinIndiaincludingfewcancellations,estimatedtobeinrangeof400MW.Theexistingpipelineissupportedby3GWofnewcapacityawardedin2023,whichcomesonlinein2026,and~3.9GWofnewcapacityawardin2024,comingonlinein2027.Thescenariodoesnotaccountfortheimpactofthe10GWtendertrajectoryintheforecastperiod,asitistooearlytoanticipatetheimpact.Afactorwhichinhibitsoverallramp-upisdelayintheadoptionofMOPRPOtrajectorywithinstates.ThecurrentRPOtrajectoriesandtargetsof16statesthatareactivebuyersinwindauctions,aggregatesto19GW,cappingthedemandfromwindauctionsinthemarket.Evenifthecentralgovernmentweretoauction10GWannualwindcapacities,procurementbeyond19GWwouldbeachallenge.Secondly,butmorepertinently,thetaperingofISTSchargewaiversfromJune202549willimpacttheeconomicsofthenewwindtendercapacitiesinthelatterhalfof2023and2024,sincethecapacitieswouldbecomingonlineafterJune2025.Hence,thesubscriptionoftendersandofftakerinterestwouldbeimpacted,leadingtoinstallationspeakinginthisyear,asthepipelinerushestocommissionbeforethedeadline.Ontheotherhand,nearly2.3GWofcapacitywithin21.7GWforecastinnextfiveyears,isexpectedtocomefromtheC&Imarket.TheinterestinprocurementofhybridcapacitieshasbeengainingtractionintheC&Imarketastheymovebeyondmeetinginitialdemandfromsolar.Thebasecaseassumesannualinstallationsrampingfrom300MWperyearin2023to600MWperyearin2027.Tomeettheupcomingdemand,thecentralgovernmenthasalsoplannedISTSgridinfrastructurewithanadditionof40.4GW,assuming6.449WaiverofInterstatetransmissionchargesonthetransmissionofelectricitygeneratedfromsolarandwindsourcesofenergyunderPara6.4(6)ofthetariffpolicy,2016GWEC.NET43Figure8:ForecastYoYnewonshorewindinstallationsinIndiabetween2023to2027GW26.2GW17.4GW21.7GWScenariodefinitionsConservativecaseBasecaseAmbitiouscase3.13.94.44.23.53.32.25.15.04.54.34.95.65.75.720232024202520262027Installations2023-27Highpacedscenarioduetowideningofdemandandsupplycomingfromtimelyexecutedpipelines,MOP'stargets,openingofstatedemandsandgridutilizationaswellashighactivityinC&ImarketRegularlypacedactivitiescomingfrom3-4GWoftenders/year,pipelineexecutionwithsomedelaysbutmajoritycompletion(duetowaivers)until2025andBAUactivitiesinC&ISlowpacedscenarioduetoslowuptakeofnewtenderscheme;withdrawalofISTSwaiverandpipelinecancellations;C&IgrowthatsamepaceNote:Aspercalendaryears;forecastsareinclusiveofhybridprojectsSource:StateAnnualRevenueRequirement(ARR)underTarifforderpublishedannually;RPOdocuments;Transmissionsystemforintegrationofover500GWREcapacityby2030;MEC+AnalysisGWiscurrentlyinthepipeline,and34GWaspartof66.5GWwillbeaugmentedby2027.ConservativecaseanalysisIntheconservativecasescenario,onshoreinstallationsinthenext5yearsreach17.4GW,andcumulativeinstallationstotal59.3GWattheendof2027.The17.4GWofinstallationsaresegmentedinto16.4GWofinstallationsviacentralandstatetendersand1GWintheC&Isector.The16.4GWofinstallationswithincentralandstatetendersaredrivenbythedeliveryof12.2GWfromtheexistingpipelineand4.2GWfromnewtenderaward.Thisscenarioassumesahighercancellationofprojectsintheexistingpipelinebyasmuchas700MW,leadingtodeliveryof12.2GWfromtheexistingpipelineof12.9GW.ThecancellationsarisefromchallengesintimelyavailabilityoflandforprojectsandRightofWayissues,whichincreasesthetimefordeliveryto36-42months.Inaddition,thescenarioassumes4.2GWofnewtendercapacitytobecommissionedby2027,lowerthanthebasecase,duetoachangeintenderrulesandthetimerequiredformarkettoadjust.Theconservativecaseassumesthatthestatewillsticktoitscommittedwindprocurementvolumeof17.4GWasperrespectiveRPObudgeting,cappingtheoverallvolumesfromofftakerside.Inadditionto16.4GW,1GWisanticipatedfromtheC&Imarket.Thescenarioassumesacontinuedcurrentpaceof200MWinstallationsperannuminthemechanismuntil2027.ThisisdrivenbythefocusofC&Iofftakertosecurethelowestcostinrenewablescontractsandfindingleastcostofcarbonabatement,aswellaslimitationofofftakerstothosemandatedbytargetsandnotvoluntaryuptake.Givencurrentmarketdrivers,GWECwithMEC+believethatthebasecaseforecastof3.3GWin2023,3.9GWin2024,5.1GWin2025,5GWin2026and4.5GWin2027seemsmostlikely,leadingtothecumulativeinstallationof21.7GWintheforecastperiod.Additionally,thiswillleadtoatotalcumulativeinstalledcapacityof63.6GWinIndiaby2027.IfIndiacontinuesinstallationswiththesameaveragerateof4.5GWp.a.installations,thenIndiacouldreach~77.1GWofonshorewindby2030.Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202744GWEC.NET45Thebigpicture:TheglobalwindsupplychainTheglobalpowersectoriswitnessingamomentoustransformationastheworldmovestowardsadecarbonisedfuture.GlobalREinstallationshaveincreasedatarapidpace.AccordingtoGWEC’sGlobalWindReport2023,windinstallationshavegrownbyaCAGRof~3%overthelasteightyears(seeFigure9).Thepaceofgrowthissettoaccelerate,spurredbynetzerotargetsandanexpandingcoalitionofcountriescommittingtorenewableenergy.Severalcountrieshaveraisedtheirnationaltargetsforwindpower,asameanstoincreaseenergysecurityandcombatclimatechange.GWECforecaststhatglobalwindinstallationscouldincreaseby551GWinthenextfiveyears.6.ExpandingtheIndiansupplychainfortheexportmarketYoYglobalwindinstallationbetweenCY2015to2022andforecastbetweenCY2023to2027GW605349465588736997106109117122219181826323520152201652017420186201972020202120222023202432026202764555450619594781151241351501572025OffshoreOnshoreSource:GWECGlobalWindReport2023ForecastofGlobalwindinstallation~3%CAGRbetweenCY2015to2022~551GWGlobalonshorewindinstallationFigure9:YoYglobalwindinstallationbetweenCY2015to2022andforecastbetweenCY2023to2027Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202746Thekeydriversforthisare50:„Ananticipated10-yearinstallationupliftintheUS,drivenbythepassageoftheIRA(InflationReductionAct)andthenationalgoaltoachieveacarbon-freepowersectorby2035andnetzerogreenhousegasemissionsby205051(seeAppendix).„TheEUhasalsosetambitioustargetsforrenewableenergydeploymentaspartofitseffortstoreducegreenhousegasemissionsundertheREPowerEUprogram,includingupto480GWofinstalledwindcapacityby2030.Itaimstoenhanceenergysecuritybyachievingashareof45%ofrenewableenergyinthetotalenergyconsumedby203052.„Additionally,theEURenewablesDirectiveseekstosimplifyandfast-trackpermittingproceduresforclimate-neutralindustrialinfrastructure,mandatingatwo-yearlimitfornewprojectstoattainadministrative,gridconnectionandEnvironmentalImpactAssessmentpermits.Effortsarealsobeingmadetoreducedependenceonnon-EU50GWECGlobalWindReport202351USnetzerotargetby205052EuropeanCommission:Targetsforrenewablessourcesofrawmaterialsandrareearthelements(REEs)undertheGreenDealIndustrialPlan(seeAppendix).„ManygeographieslikeVietnam,SouthAfrica,ChinaandColombiaaresettingaggressivenewtargetsforwindpower.Additionally,somemarkets,includingTurkey,UKandSweden,areacceleratingwindinstallations.Whencomparingexistingproductioncapacitieswithexpectedonshorewindinstallations,GWECconcludesthatthesupplychaininChina,India,andLatinAmericawillhaveenoughnacelleproductioncapacitytomeetdemandthrough2030(seeTable1).Ontheotherhand,ifcountriessuchasUSandEuropeprioritisedomesticmanufacturingindustriesvia“MadeintheUSA”or“MadeinEurope”initiatives,thesemarketsmayfacechronicproductionshortagesassoonas2026.Table1:OnshorewinddemandandnacellesupplybenchmarkbetweenCY2023toCY2030DemandvsSupplyanalysisbetweenCY2023-2030(inMW)Annualnacellecapacity20232024202520262027202820292030Europe21,60014,50017,75018,92020,95023,29023,50024,00025,000USA13,6008,0009,00010,00013,00015,00017,00018,00020,000LATAM6,1505,8605,3625,2005,0505,0305,0005,0005,000China82,00060,00060,00060,00060,00060,00065,00065,00065,000India11,5003,4004,2004,5004,7004,5004,5005,0005,000RestofWorld3505,6199,95510,42413,56013,70514,00014,30015,000SufficientPotentialbottleneckSource:GWECGlobalWindReport2023GWEC.NET47Additionally,ifwelookbeyondnacelledemandversussupplyanalysis,theproblemislikelytobeexaggeratedduetoamuchhigherdependenceonimportsatthesub-componentlevel.Majorlysubcomponentssuchastowers,gearboxes,generators,etc.,areimported(seeFigure10),highlightingthehighdegreeofconcentrationoftheglobalwindsupplychaininafewgeographies,with70-80%ofthesecomponentscomingfromChina,India,LatinAmericaandtherestoftheworld.Aconcentratedsupplychaincombinedwithdomesticsourcingstrategiesarecertaintogeneratebottlenecks.AsshowninFigure10,manufacturingof60%ofblades,65%ofgeneratorsand75%ofgearboxesproducedfortheglobalwindpowerindustrycurrentlytakesplaceinChina.Inadditiontothesecomponents,Chinacontrolstheglobalsupplychainforcastings,forgings,slewingbearings,towersandflanges,withmorethan70%globalmarketshare.Ashiftto“de-couple”or“de-risk”supplychaindependenciesfromChinawilltakeconsiderabletime,learningandcostreductioncurves,whichcouldslowdownthedeploymentofwindenergyinthemeantime,orerodeitscost-competitivenessversusconventionalfuelsources.Although,theshifthasalreadystartedtoemerge,asperdatapublishedbyUSdepartmentofenergyandBerkeleyLabanalysis.In202053,Chinacontributed13%inUSimportswhereasIndiacontributed19%.Furthermore,in2022,India53Landbasedwindmarketreport:2021EditionbyUSDepartmentofEnergy,OfficeofEnergyEfficiency&RenewableEnergydrasticallyincreaseditsshareto24%whereasimportsfromChinareducedto4%.TheshiftindicatesachangingtrendinglobaltradedynamicsandhighlightsIndia’sgrowingimportanceasanexporthub.Worldwidemanufacturersareexploringopportunitiestodiversifythelocationoftheirmanufacturingunitswithanaimtocutfuturesupplychainrisksduetogeopoliticalconcerns,situationslikeCOVID-19,andtocapitaliseonattractiveincentivesavailableinmarketsoutsideChina.StatusoftheIndianwindsupplychainIndiaiswitnessingarevolutioninitsdomesticmanufacturingcapabilitiesduetovariousinitiativessuchas“MakeinIndia”aswellas“AtmanirbharBharat.”Currently,Indiahas11.5GWofnacellemanufacturingcapacitylocatedinthestatesofKarnataka,Maharashtra,Gujarat,andTamilNadu(seeFigure11).In2016,theGovernmentofIndiasetatargetofinstalling175GWofrenewableenergycapacityby2022,including60GWofwindpower54which54In2016,GovernmentofIndiaplanstoproduce175GWofrenewableenergyby202214%11%60%65%22%12%1%75%12%7%3%3%1%7%7%BlademanufacturingGeneratormanufacturingGearboxmanufacturingChinaEuropeIndiaUSLATAMOtherAPACSource:GWECGlobalWindReport2023Figure10:Globalwindkeycomponentsupplychainoverviewin2022Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202748meantadditionsof5GWperyear.ThiswouldhaveledtodomesticmanufacturinginvestmentsbyOEMs55.However,themarkethasbeenmutedsince2017withtheendoftheFiTregime,andIndiaonlyrecordedanaveragecommissioningvolumeof1.74GWfrom2018-2022.AsFigure11shows,outofthetotal11.5GW,only~2GWwasutilisedandinstalledin2022.MostofthemanufacturingcapacitywasunderutilisedduetolowervolumeinthedomesticmarketandrelativelylowexportsofnacellesfromIndia.SuzlonandGEhavesignificantlyincreasedinstallationsin2022ascomparedto2021,whichincreasedtheutilisationoftheirmanufacturingcapacitiesinIndia.SGREhasbeenaleadingsupplierandmanufacturerinIndiaandcontinuestoshowconsistentresultsintermsofinstallations.OtherOEMsincludingEnvision,InoxWind,VestasandSenvionsawinstallationsof758MWin2022.Althoughwindmanufacturingfacilitiesareunderutilisedcomparedtocurrentandforecastdemand,asignificantupsidecanbeobtainedinthedomesticwindmarket.Maximum55AcceleratingOnshorewindcapacityadditioninIndiatoachievethe2030targetbyGWECwindpowerinstallationsperyearunderthebase,conservative,andambitiousscenariosstandat5.1GW,4.4GW,and5.7GW,respectively,whichmaystillleadtounderutilisedmanufacturingcapacityinIndia.Therefore,thiscreatesanavenueofexportpotentialformanufacturerstoenhancetheirpositionwithintheglobalwindsupplychain.Figure11:OEMwiseonshorewindinstallationdoneinCY2021andCY2022inIndiaOEMsFactoriesInstalledcapacity(MW)-2021Export171754108189300211006144733383147670220Installedcapacity(MW)-2022NADaman,Padubiri(KA),PuducherryMamandur(TNPune(MH)Chennai(TN)Bhuj(GJ),Una(HP),Barwani(MP)Chennai(TN)Pune(MH)Baramati(MH)Note:KA-Karnataka;TN-TamilNadu;MH-Maharastra;MP-MadhyaPradesh;GJ-Gujarat;HP-HimachalPradesh:Installedcapacityinyear2021and2022isasperCalenderYear(CY)Source:Companywebsites;DirectoryIndiawindpower2022byConsolidatedEnergyConsultantsLtd(CECL);MEC+analysisGWEC.NET49IndianopportunitiesintheglobalsupplychainDrivenbypressurestoreducewindpowerLCOE,theglobalwindsupplychainhasbeenheavilyreliantonlow-costandhigh-scalemanufacturinginChinaandEasternEurope.However,duetoconcentrationriskinthesupplychain,countriesandregionsarenowemphasisingtheimportanceofself-reliance.Severalfactorshavecontributedtothisshift,includingtheimpactofCOVID-19pandemic,geopoliticaltensionssuchastheChina-UStradedisputesandRussia’sinvasionofUkraine.Consequently,numerouscountriesareactivelyengagedinreshoringor“de-risking”initiatives,aimingtodiversifytheirsupplychainsawayfromChinaandreducevulnerabilities.Thisstrategicshiftisexpectedtohavesubstantialimplicationsfortheglobalsupplychaindynamicsandtherelationshipsbetweensuppliersandbuyers.„COVID-19supplychaindisruptionsLikemanyothersectors,theCOVID-19pandemicdisruptedandimposedadragupontheglobalwindsupplychain.ThispromptedtheshiftofmanufacturingandexportactivityfromChinatoIndia.IndiawasrecognisedbyleadingturbineOEMslikeVestasasastopgapsolutionafterturbinemanufacturingandcomponentproductionfacilitiesinChinawerelockeddownduetothepandemic.Tosupporttheirnewsupplychainstrategies,sub-supplierscooperatingwithmajorWesternturbineOEMssuchasBaetter,LJM,andFlenderhaveeitherinvestedinnewproductionfacilitiesorexpandedexistingfacilitiesinIndia.„US-Chinatradedisputes:TheonsetoftheChina-UStradedisputesin2018triggeredanotabletransitionintheglobalwindgearboxsupplychain,redirectingitfromChinatoIndia.Theworld’sthreemajorwindgearboxmanufacturers,ZF,Winergy,andNGC,aretheprimarysupplierstotheUSandhavefacilitiesinIndia.TosupplycompetitivelytotheUS,however,allofthemutilisedtheirmanufacturingbaseinChinatomeetdemand.Thissupplychainmodelworkedwelluntil2018,whentheUSimposeda25%tariffonUS$50billionofChineseexportsincludingwindgearboxes.ThetwoEuropeansuppliersZFandWinergywereabletoutilisetheirglobalfootprintstoshifttoproductionfacilitiesinbothEuropeandIndia.SinceNGCwasproducingexclusivelyinChinaatthattime,theChinesegearboxproducerexperiencedmorepressurethanitsEuropeancounterparts.NGCstartedbuildingagearboxassemblyfactorynearChennaiin2019,withanannualproductioncapacityupto2,000units.Atthesametime,ZFandWinergyalsoexpandedproductionfacilitiesinIndia.Followingthenewinvestmentinthepastfouryears,IndiahasnowreplacedEuropeastheworld’ssecond-largestwindgearboxproductionhub.„GeopoliticalconcernandbuildingsupplychainsecurityRussia’sinvasionofUkrainehasamplifiedthecriticalneedtoreinforcesecurityofsupplyandreducedependencyonsinglegeographiesformaterialsandcomponentscriticalforenergysystems.Tomitigateinsecurityintheenergysupplychain,countriesarenowinitiatingpoliciesaimedatreshoringmanufacturingawayfromChina.Whilethiscarriestheriskofincreasingtheoverallcostsofrenewableenergyandcreatingnewlogisticsbottlenecksthatcouldslowdowndeployment,somecountriesarewillingtopayfortheredundancyinordertoshoreupsupplychainresilience.Policiessuchas‘reshoring’,‘de-risking’and‘ChinaplusOne’enhancedmanufacturingandexportopportunitiesforcountrieswithrelativelylowproductionandlabourcosts,andestablishedinfrastructureandseaways.Againstthisbackdropofeventsandgeopoliticalshifts,Indiaiswellpositionedtotakeadvantageofopportunitiesintheglobalwindsupplychain–butitwillneedtoresolveafewcriticalchallengestodoso.Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202750GWEC.NET51Attractinginvestmentsforthescale-upofmanufacturingwillhavemassivesocio-economicbenefits.WindcompaniesthatmaybeexploringinvestmentdecisionsinIndiawillmakerationalbusinessdecisionsbasedonmultiplefactors,includingcost-competitiveness,infrastructurehighways,easeofdoingbusinessandotherfactors.Thesedecisionsarehighlylikelytobealsoinfluencedbycomparativeadvantageswithothercountriesseekingsupplychaininvestments.Toenhanceitscompetitivenessinasupplychainmovingtowardsfragmentation,Indiamustaddresskeyprioritiesliketechnologyalignment,convergenceincostsandasupportivetaxandincentiveregime.TechnologyalignmentofIndianturbineswithothercountriesGlobally,windturbinetechnologychoicedependsonavailablesitesandresourceintheregion.Currently,Indiaproduces2-3.6MWwindturbines,asareflectionofitscurrentdomesticdeploymentneeds56.Figure12reviewsthisrelationshipbetweenlocalisedmanufacturinganddeploymentneedsindetail:56WindturbinemodelsincludedinRLMMafterthedeclarationofthenewprocedure(i.e.1stNovember2018)byMNRE.AdaniNewIndustriesLtd.turbineof5.2MWwhichisexpectedtobelaunchedintheIndianmarketin2023.7.RisinguptoglobalsupplychainopportunitiesFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202752Figure12:Globalproducttechnologyroadmapforonshorewindturbinesbytop10countriesasperforecastinstallationsWindspeedGermanyFranceUnitedKingdomSpainSwedenTurkeyAustraliaUSABrazil100110120100901309011714011513217015115013614513616216213075751087565657010310580140126161149110112166166166902.02.73.22.12.53.82.03.23.62.83.66.24.64.26.05.04.35.66.03.5IndiaCountryNameplatecapacityMWHubheightmeterRotordiametermeterLowHighWindInstallation-onshore(FY23-27)GW21.316.021.07.57.312.26.58.27.655.0Note:TopcountriesarebeingselectedbasedonforecastedinstallationbetweenFY2023to27tomappotentialglobalmarketforIndiansupplychain;Chinaisexcludedfromthelistduetoitsself-sufficiencyinwindturbineandcomponentmanufacturing:2021-22winddataisusedforallcountries;SpainandSwedendataobtainedfromdifferentOEMsthroughnewsarticleandmaynotincludeallinstallationsin2021-22:WindspeediscategorizedusingweightedaverageoftopturbinesdataSource:GermanWindEnergyAssociation;FranceWindObservatory;UKonshorewindfarms;SwedenOEM;TurkeyWindEnergyStatistics;USwindmarket;IndiawindpowermarketdirectorybyCECL;ABEEólica(Primary);MEC+analysisGWEC.NET53Theprimarychallengeistechnologicaladvancementsofwindturbines,whichcanbemappedonthreemajorparameters:nameplatecapacity,hubheightandrotordiameter.Uponanalysingthetop10countriesforwindinstallationsuntil2027,itcanbeinferredthatIndialagsbehindintermsofnameplatecapacity,lagstoalesserdegreeonrotordiameterandfareswellonhubheight.Inthecaseofnameplatecapacity,limitedoverlapisseenbetweenthetechnologiesofdifferentcountries.Threeoutof10countries,includingtheUS,France,andSweden,usealmostthesamesizeturbineswhichcanbetargetedbyIndianmanufacturers.ThisopensanimmediatemarketforIndiaatthesub-componentlevel,includinggeneratorandgearbox,whichaccountsfor~65GWuntil2027.IfIndiawishestosupplyturbinestoBrazil,theUK,andAustralia,asignificantupscalingwillberequiredtoopenanopportunityof~31GWmarketby2027.Intermsofrotordiameter,Indiaholdsagoodposition.Additionally,theUS,France,theUK,andSwedencanbecomemajorhubstoexpandIndia’swindsupplychain.Moreover,IndiacanbecomeanexporthubforbladesasthetechnologicalrequirementsforrotordiameterbyothercountriesareinlinewithIndia’smanufacturedturbines.Indiaisatasweetspotintermsofhubheightwhichisintherangeof75-140meters.Whilelookingatrecenttechnologicalinstallations,countrieshaveinstalledturbinesinthesamecategory,whichwouldsupporttheexportoftowersfromIndia.Amongthetopcountriesintermsofforecastwindinstallations,theUS,Brazil,andFrancecanbedirectlytargeted,accountingfor~78GWoftheinstallationsbetween2023and2027,providingavastopportunityfortheIndianwindsupplychaintobecomeapartoftheglobalwindmarket.InSeptember2020,theUSDepartmentofCommercereceivedCountervailingDuties(CVD)petitionsconcerningimportsofutility-scalewindtowersfromIndiaandMalaysia,filedonbehalfoftheWindTowerTradeCoalition,whosemembersareArcosaWindTowersandBroadWindTowers.Thepetitionswereaccompaniedbyanti-dumpingdutypetitionsconcerningimportsofwindtowersfromIndia,Malaysia,andSpain.TheallegeddumpingmarginsasperthepetitionfiledundertheInternationalTradeAdministration(ITA)areasfollows:54.1%forIndia;93.8%forMalaysia;and73%forSpain.ThecoalitionallegedthatIndiaandMalaysiaprovidecountervailablesubsidiestoproducersofwindtowersandarguedthattheimportsofthetowersaremateriallyinjuring,orthreateningmaterialinjuryto,thedomesticindustryproducingwindtowersintheUnitedStates.ForIndia,theDepartmentofCommerceinitiatedaninvestigationon69subsidyprogrammes,includingtheprovisionofgoodsforandservicesforLessthanadequateremuneration(LTAR),direct/indirecttaxprogrammes,exportsubsidies,energyandresourcesubsidies,loans,andgrantprogrammes.InOctober2021,theDepartmentofCommerceannounceditsaffirmativefinaldeterminationsintheantidumpingdutyinvestigationsandCVDinvestigationofutility-scalewindtowersfromIndia.ThefinalratesimposedwerestreamlinedacrossallOEMsat51.9%.Box1:USCallsforCountervailingDutyonIndianWindEnergyOEMsFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202754CostcompetitivenessandconvergenceWhileIndiahascompetitiveadvantageinrelativelylowlabourcosts,itstilllagsbehindothercountriesintermsofmanufacturingefficiencyandcost-competitiveness.ThemajorchallengeisthesignificantdifferenceinthemanufacturingcostofturbinesinIndiaversusChina.MEC+hasdrawnacomparativeanalysisbetweenWTGOEMs:manufacturinginIndia,importingcomponentsandassemblinginIndia,andChineselocalmanufacturers.Chinese-madeturbinesareconsideredtobethemostcost-effectiveintheglobalmarket.TheChinesewindindustryhasinvestedheavilyinmanufacturingtechnology,andrawmaterialsareavailabledomesticallyatacheaperratethantheotherregions.Consequently,ChinahasachievedeconomiesofscalethatenablesittoproduceturbinesintherangeofINR3.4-3.8croreperMW(EUR0.39to0.43million),whichisalmost30%lowerthanthecostoflocallyassembledIndianturbinesthatlieintherangeofINR4.6-4.8croreperMW(EUR0.52to0.54million).However,turbinesmostlymanufacturedinIndiaarethemostcostly,andlieintherangeofINRIndianturbinesChineseturbinesLocallyManufacturedComponentsimportedandAssembledEUR0.67-0.71millionEUR0.64-0.67millionEUR0.52-0.54millionEUR0.39-0.43millionINRcrore5.9-6.3INRcrore5.6–5.9INRcrore4.6–4.8INRcrore3.4–3.8EuropeanOEMsmanufacturinginIndiaComponentsimportedandassembledinIndiaSource:CompaniesAnnualreport;InvestorsPresentation;MEC+AnalysisCostrangeofChinesevsIndianonshorewindturbinesINRCroreperMWFigure13:CostrangeofChinesevsIndianonshorewindturbinesINRCroreperMW5.6-6.3croreperMW(EUR0.64to0.71million)(seeFigure13).Thedifferenceof~30%inthecostofturbinesismainlydueto:„Costsofrawmaterials:Withupto50-60%57ofawindturbine’s57StudybyIEAontheimpactofincreasingcommodityandenergypricesonsolarPV,windandbiofuels;SGREcapitalmarketday2022presentation(Pageno.7)massmadeofironandsteel,therewillbeheighteneddemandforthesematerialsastheglobalwindfleetexpands.IndiafacesconstraintslikelowsupplyGWEC.NET55andhighcostofrawmaterialsincludingthesteel,copper,andrareearthelements(REEs)requiredinthewindturbines.In2022,thedifferencebetweenthecostofsteelinIndia58andChina59wasINR~16,000pertonne(EUR181),whichincreasedforspecificgradesteelsthatwererequiredforwindturbinesuptoINR16,400-20,500pertonne(EUR186-233).Thismakesa~9-12%costdifference.„Unavailabilityofcomponents:Thechallengeofunavailabilityofcomponents,includinglargecastings,generators,andothercriticalcomponents,canposesignificantchallengesforthewindsupplychaininIndia,whichinturnleadstoasignificantcostdifferenceintheturbinecomponents,includingblades,towers,andgearboxes,ascomparedtoChina.Thesecomponentscontribute~55%ofthetotalcostofturbines,andasignificantcostdifferenceofalmostINR0.9-1croreperMW(EUR0.10to0.11million)betweenIndianandChinesewindturbines.58CostofsteelinIndia–MEPSInternationalLtd.59SteelHomeChinaSteelPriceIndex-SHCPIBox2:CapitalexpendituresonmaterialsforonshoreandoffshorewindThesuddenrecoveryofindustrialproductionfollowingthepandemicshockof2020ledtofiercecompetitionamongdifferentindustriesforrawmaterialsandbottlenecksinmanufacturingcapacityandtransportlogisticssuchasshipping.Thishadasignificantimpactonthewindindustryasprocurementandfreightforrawmaterialsandcommoditiesofwindturbines,includingsteel,concrete,copper,nickelandasmallbuthigh-valuevolumeofREEs,andtheirsubsequentmanufacturingintowindturbinecomponentsmakeupthelion’sshareofwindprojectCAPEX.Foronshorewind,turbinecapitalcostsareestimatedtocontribute70%oftotalCAPEX;viewedasmeasureofLCOEacrossa25-yearprojectlifetime,nearly50%ofonshorewindprojectLCOEismadeupofturbinecosts,accordingtoNREL.Foroffshorewind,turbinecapitalcostsareestimatedtocontribute34%oftotalCAPEX;viewedasameasureofLCOEacrossa25-yearprojectlifetime,23%ofoffshorewindprojectLCOEismadeupofturbinecosts.Thesesubstantialcapitalexpendituresonturbineprocurementofrawmaterialsandcommoditiesmakethewindsupplychainhighlysensitivetoupstreamcostinflationandtradeprotectionmeasures.Pricespikesforrawmaterials,aswellaspricefluctuationsfortheelectricitytopowerheavymanufacturingoperations,affectcostrecoveryandtimelydeliveryforsuppliersfulfillingcontractsforwindturbinecomponents.Changesinelectricityandfuelprices,commoditiesandrawmaterials,freightandlogisticscaninturnsignificantlyimpacttheeconomicfeasibilityandcommissioningtimelinesofprojects.SteelElectronicscrapGFRPCopperCFRPRareearthAluminiumLeadConcreteSteelOffshorewindfarmOnshorewindfarmElectronicscrapGFRPCopperCFRPRareearthAluminiumLeadConcrete221t/MW640t/MW72%90%24%5%4%Source:BloombergNEF.Note:GFRP=Glassfibrereinforcedplastic.CFRP–CarbonfibrereinforcedplasticFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202756Box3:CostdifferentiationbetweenIndianandChinesecastingmanufacturingLargesizecastingsareamongthemostcriticalcomponentsforthewindturbineindustry,withhubcastingholdingallthreebladesandmainframecastingaccommodatingallthenacelleparts.Currently,Indiaisthesecond-largestmanufacturerofcastingsafterChina,producing11.5millionMTperyear.However,despitethisposition,Indiaholdsonly10%oftheglobalbusinessshareduetouncertaindomesticwinddemandandtoughcompetitionfromChina.WhileIndiaisthesecond-largestmanufacturerforcasting,~42%oftotalcastingrequiredforturbineexportproductionand50%oftotalcastingrequiredfordomesticwindinstallationscomefromChina.Furthermore,almost90%ofthetotalcastingsrequiredforgearboxmanufacturingdomesticallycomefromChina,asshownbelow.AcasestudybySynergyGreenIndustriesLtd.whichisoneoftheIndia’sleadingmanufacturersoflargesizecastingstowindturbineindustryestablishedin2011.SGILisastate-of-the-artfoundryinstalledwithIndia’slargestsemi-automatedfastloopmouldinglineforlargecastingsintheweightrangeof3MTto30MTwithanannualcapacityof30,000MT50%50%Domesticwindinstallation58%42%Exportturbineproduction30,00024,000DomesticsupplyChinaImportsHubCastingGearBoxProduction30,00010%90%GearboxCastingWindcastingdemandandsupplysourceMTSource:SynergyGreenIndustriesLimitedIndiashouldcreatespecificpoliciestoexpanditsshareofinputsforcastingsintothedomesticandexportmarkets.TheGovernmentofIndiahastakenstepsinthisdirection,suchasimposinganti-dumpingdutiesonChineseimportsduringthe2017-22period.However,China’sfoundriesarestillaheadduetofactorssuchas:•SignificantlocalWTGdemandleadingtoeconomiesofscaleandviabilityofinvestmentsinmachiningandlogisticscosts.•Lowercommodityandinputprices,drasticallybringingdownthepriceoffinishedproducts.•Exportincentives.Thesefactorscombinedcreateacostdifferentialofaround25%,infavourofChina,whichnarrowsdownto10%afteraccountingforlogisticsandcustomduties.However,exportofIndianturbinestomeetglobaldemandwillcreateamuchhighercostdifferentialinChina’sfavour,asthedutiesoncastingsimportedbyOEMsfromChinawillbewaivedagainsttheexportobligation–thiswillfurtherchallengedomesticcastingmanufacturers.Toeliminatethepricegap,furtherinvestmentsareneededtoincreaseproductionvolumesandupgradetechnologytoproducehigherMWturbinecastings,aswellasincreaseaccesstorenewablepowertooptimisepowercost.Indianfoundriesarepoisedtobecompetitiveandself-sufficientinmeetingdomesticdemand,candanevenbecomenetexporterstoothercountries.Thefollowingpoliciescouldbeconsidered:•Nominalduty,forinstance15%,onChineseimportsforwind&gearboxcastingsconsumedfordomesticdemandandexports.•Incentivesforinfrastructureinvestments.•Accessibilityoflow-costfundingforinvestments.Withtheabove-mentionedpoliciesandgovernmentsupport,Indiawouldhavethepotentialtoemergeasagloballeaderinwindturbinecastingmanufacturing,boostdomesticemploymentandincreaseexportrevenues.GWEC.NET57SupportivetaxregimeandotherincentivesAnotherkeychallengethatIndiafacesisthelackofasupportivetaxregimeandincentives.IndiaandChinaaretwoofthelargestandfastest-growingeconomiesintheworld,withvastdomesticmarketsandhighlyskilledworkforces.Whilebothcountrieshavemadesignificantprogressinrecentyears,therearestilldifferencesbetweentheirrespectivetaxregimesandincentivesforimportandexport.KeydifferencesseenbetweentaxsystemsbetweenIndiaandChinaincludewhichmayimpactIndia’spositioningintheglobalwindsupplychaininclude:„InconsistencyintheIndiantaxsystemandpoliciesleadingtoincreasingdifficultyincomplianceforbothdomesticandforeigninvestors;„IndiahasarelativelyhighernumberandhigherratesoftaxesascomparedtoChina,asshowninTable2,whichultimatelyincreasesthecostofgoods;„Chinahasa‘refunduponlevy’policyapplicableontheirstandardVATwherearefundof50%60isapplicableonthe60StandardChinesetaxespayableamount(i.e.,theexcessofoutputVATovertheinputVAT),leadingtolowcostofgoodsascomparedtoIndia;and„ChinareceivesanExportTaxRebateintherangeof9-13%alongwithacorporateincometaxrateof15%,whichisfavourablecomparedtoIndia’s33.8%.61ThesetaxationdistinctionscontributetoahigherfinalcostofgoodsmanufacturedinIndia,encouragingforeigninvestmentinChinatoproducegoodsforexport.TheIndiangovernmentshouldconsiderimplementingrobustpoliciesthatwillreducetaxesandencouragemanufacturerstoentertheIndianmarket.61ItshouldbenotedthatmostChineseincentivesandtaxesdifferfromprovincetoprovinceandareawardedonacase-to-casebasisFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202758IndiaChinaCategoryTaxValueTaxValueCITCIT33.8%CIT(standard)CITQualifyingWindPowerEnterprisesOperatingintheWesternRegion25.0%15%GeneralTaxCompositeSupplyGSTIGST13.8%12.0%18.0%VAT13.0%ElectricityElectricityDuty5-15%SupplyofElectricity13.0%LandandAssestsTaxLandTaxPropertyTaxRs5toRs44sqmtrLandUseTaxPropertyTaxResourceTaxCNY1.2to30persqmtr/yr2-3%CNY0.3to1500pertonneSurcharges/CessLocalSurchargesLocalEductaionSurcharge7/5/1%2%EnvironmnetalTaxEnvironmnetalTaxesRs400pertonneofwasteEnvironmnetalProtectionTax1.2yuanperpollutantequivalent.LegalTaxStampDuty5-7%StampDuty0.01-0.05%OtherTax/Social/MunicipalTaxEmploymentTaxesProfessionalBodyTaxCentralSalesTaxMunicipalCorporationTax16.75%maxofRs25002.0%1%CMCT/UMCT7.0%Table2:Standardtaxesforwindturbinemanufacturing-IndiavsChinaSourcebox:ArticleonGSTonRenewableenergysectorbyInCorpAdvisory;AnewgoldenageforrenewableenergyreportbyKPMGpublishedinMarch2023;WorldwidetaxsummariesreportbyPWC;ArticlebyChinaBriefingonSelectedtaxincentivesinChina’srenewableenergysector;MEC+AnalysisGWEC.NET59InterviewsconductedbyGWECandMEC+withindustrystakeholdersfurtherrevealthemajorchallengesfacedbyOEMsinIndia,suchas:„Dutyonrawmaterialsremainshigherthanonsemi-finishedorfinishedcomponents.Forexample,thedutyonsteelis18%andthedutyonsteelplatesis12%,drivingupcostsfordomesticsourcinganddiscouragingmanufacturersfromproducingcomponentsfromrawmaterials.„Forexports,themanufacturerofthewindturbinecanclaimanIGSTrefundformaterials(convertor,generatoretc.),butthisisnotapplicableforcapitalgoods,includingmachineryandland,whichincreasesCAPEXandaddstocosts.Indiahastriedtoaddressthesedisparitiesinincentivestoboostthedomesticwindmanufacturingsector,andcombattheriseincostsduetotaxesandduties.Themainincentivesdeployedbythegovernmentare:„ExtensionoftheConcessionalCustomDutyExemptionCertificate(CCDC)62policyup62CCDCPolicyextensionannouncedin2023until31March2025,from31March2023.•ThegovernmentprovidesafinancialincentiveintheformofConcessionalCustomDutyExemptiononsomeofthecriticalcomponentsrequiredtobeimportedformanufacturingofWTGs(effectivelyreducingbasiccustomsdutyto5%forimports).„RemissionofDutiesorTaxesonExportProductsScheme(RoDTEP)schemereplacingtheMerchandiseExportsfromIndiaScheme(MEIS)scheme,allowinga0.8%creditrebate63onallwindturbinepartsexportedoutofIndia.•TheRoDTEPSchemeallowsexporterstoreceiverefundsontaxesanddutiesthatarenotexemptedorrefundedunderanyotherscheme.Theschemewillensurethattheexportersreceiverefundsontheembeddedtaxesanddutieswhichwerepreviouslynon-recoverable.63RoDTEPschemereplacingtheMEISschemewasannouncedin2021January,andthecreditrebatereducedfrom2%to0.8%forwindturbinecomponentsOverall,byprovidingadditionaladvantagestoIndianmanufacturers,anddrawingparallelstootherfundingschemessuchasthesolarPLIinIndiaandIRAintheUS,thegovernmentofIndiacandeepeninvestmentinthecountry’swindsupplychainandpositionthecountryasakeyglobalexporthubforafast-growingrenewableenergyindustry.Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202760GWEC.NET61Overall,India’sgrowingwindindustryholdsmultipledomesticandinternationalopportunities.Therecentaccelerationofdomesticgrowth,combinedwithaforecastdemand-supplygapintheglobalsupplychain,createsfavourabledynamicsforthecountry.However,Indiamustimplementconcretepolicyactionstoseizetheseopportunities.ReinvigoratingthedomesticwindindustryAcrosstheinteractionsconductedbyGWECandMEC+withindustrystakeholders,thecommonaskwasforexpansionofdomesticmarketvolumes.InvestorsperceiveIndia’sdomesticmarketwithhugepotentialbutlowactualisation.Themarketisexpectedtoacceleratetowards2027withannualinstallationsincreasingfrom1.8GWin2022to2.8in2023,3.7GWin2024,andpeakingat5GWin2025inthebasecase.Overall,India’swindmarketoffersanopportunityfor21.7GWofinstallationsfrom2023-2027.Thedriversforwindinstallationswillstrengthentowards2030asIndiaapproachesitstargetofreaching500GWrenewableenergycapacityand50%ofenergyrequirementsfromrenewableenergy.In2022andearly2023,authoritieshavebeenactivelyworkingonreignitingvolumesinthedomesticmarket.Interventionsincluderevampingthewindtendermechanismfromreversebiddingtoclosedenvelope,introducingstate-specificauctions,andpublishingaclearroadmapforannualauctionsinFY2024splitbyagencyandquarter.Industryactorsarehopefulthattheinterventionscoversupply-sidedynamics;however,theyarescepticalofoff-takerparticipationinthenewlydiscoveredprices,whicharelikelytobehigherthanthepreviousrounds.Ifthenewauctionmechanismdoestakeoff,Indiamaymovefromthebasecasescenariototheambitiousscenariopost-2025(whenthesetenderedprojectsareinstalled),installingannually~5GWofvolume.ThisincreaseintheannualmarketwillpositivelyimpactIndia’sdomesticinvestmentenvironment,andfurtherservetoinjectanewwaveofcapitalintomanufacturingcapacity.AmajorlessontobelearntfromChina,whichhasconsistentlyinstalled10+GWofwindpowerannuallysince2010,isthatlargedomesticvolumescansupportsupplychainexpansion,newinvestmentinR&Dandcost-competitiveness.MostmanufacturingcapacityinIndiaiscentredon2MWclassturbines,whichareincreasinglyobsolete.Whilethenewcapacityfornacelleassembly,towers,andtosomeextentblades,isfocusedon3-5MWclassturbines,themajorityofthetier2supplychain,includinggearboxes,castings,mainshaftsandotherheavyequipment,isrestrictedto2MWorsub-2MWclass.AlackoflocalmanufacturingcapacitycombinedwithlowimportdutiesleadstocontinueddependenceonChineseimportsinIndia,especiallyforcomponentslikegenerators,castingsandpower8.ConclusionandrecommendationsforpolicymakersFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202762electronics,andwithinthemajorityoftier3supplychain,likefabricatedequipment,epoxyresins,glass,fibre,etc.TargetedincentivesareneededtosupportIndia’sstriveforself-sufficiencyanditsshiftfromdomesticassemblyshoptoglobalmanufacturinghub.SettingtheconditionsforanexporthubIndia’sexistingwindmanufacturingcapacitiesareprimarilyinclinedtomeettheneedsofthedomesticmarket.FortheIndianwindmanufacturingindustry,windexportsoftenfacilitatethebalancingofCapExandmarginswhenvolumesavailableinthedomesticmarketareveryskewed.However,givenemergingglobalsupplychainopportunities,theindustryaswellasthegovernmentsmustworktogethertostrikeabalancesothatdomesticneedsaremetwhilethecountry’sshareinglobalsupplyalsocontinuestostrengthen.Globally,about551GW64ofwindisexpectedtobeinstalledbetween2023and2027,withonshorewindcontributing422GW,anincreaseof100GWoverthepreviousfive64ByGWEC’s–GlobalWindReport2023years(2018-2022).Thereisaneedtorampuptheworldwidesupplychaintomatchgreatervolumesofannualinstallation.AccordingtoGWEC’sGlobalWindReport,supplyconstraintsareprojectedtooccurintheUS,EU,andrestoftheworldfrom2026onwardduetoamismatchbetweenproductioncapacityanddeploymentpipeline.AsOEMsfocusondiversifyingsuppliersandshoringupsupplychains,theongoingdynamicspresentanopportunityforIndiatoplayacriticalroleinsupplyingtheglobalwindindustry.Firstandforemost,Indianeedstocreateastrongandsustainabledomesticmarket.Interactionswithindustrystakeholdersreflectthatitisdifficulttoinvestinanewgeographysolelyforexport,whenthatcountrylacksarobustdomesticmarket.Second,Indiamustalignmanufacturingcapabilitiestooverlapwithglobalproductportfoliosandroadmaps.Whiletowersandbladesdemonstratesignificantoverlapwithglobalsizes,nameplatecapacityneedstorampuptoalignwithglobalplatforms.Third,Indianeedstodemonstratecostleadershiptodevelopasaglobalexporthub.Indianturbinesare30-60%moreexpensivethantheirChinesecounterpartsinthesameproductclass.IndianturbineswithmajorityimportedcomponentsassembledinIndiaare30%moreexpensivethanthosemanufacturedinChina,whilelocallymanufacturedWTGscomewithafurther30%costpremium.Keyherearedifferencesinthecostofrawmaterialsandaccesstocomponents.Last,Indianeedstomakeitsexportincentivesmoreaccessibletoboostexportorientation.Thecurrentincentivesforexportsaredifficulttoaccess;thewindindustryhashighlightedaminimum6-18-monthcycletosecurethedutydrawbackonthepaiddutiesforexportedmaterials.Thelengthydocumentationprocessandmulti-levelclearanceprolongtheprocessandimpactworkingcapital.Toavoidthischallenge,actors,especiallyofsmallercomponentssuchaselectronics,haveresortedtothegovernment’sBondedWarehousescheme,thelong-termvisibilityofwhichisanissue.Inadditiontointernalfactorsthatrequirerevision,externalthreatsarealsoemerging,fromheightenedgeopoliticaltensions,atrendtowardsreshoringor“de-risking”frommarketconcentration,andaseriesofschemesintheUSandEUdesignedtoattractincentivesinupstreamanddownstreamdomesticmanufacturing.Amidthiscontext,Indianeedstoadoptstrategicthinkingtowardsexportopportunities.Areasofconsiderationinclude:„Castings:Althoughcurrently,capabilitiesforlargemachinecastingmanufacturinginIndiaarelimited,thelabour-intensiveprocessandthehighESGriskslinkedtothefoundryprocessusedinforgingcastingsmakeitafitfortheUSandEUmarkets.„Gearboxes:Likecastings,gearboxmanufacturingisalsoalabour-intensiveprocess,makingitexpensivetodoinhighlabour-costcountriesliketheUSandEU.Globally,gearboxesaremanufacturedcentrallyandexported.WithWesternOEMslookingfora‘ChinaplusOne’strategyindiversifyingtheirsupplybase,thiscanbeasuitablesegmentoffocus.GWEC.NET63Recently,FlenderexpandeditsbaseinIndiaandNanjingHighSpeedGearBoxManufacturingCompanyLimitedestablisheditsmanufacturingplantinIndia.„Blades:Indiahasbeenexportingasignificantnumberofmanufacturedblades,especiallytotheUSmarket.Theabilitytoproducebladesupto80metreslong,andexistingfacilitiesformanufacturing,createopportunity.However,thefreightcostoflargecomponentsarechallenging.Likecastingsandgearboxes,the‘ChinaplusOne’strategyanddiversificationarecriticalforOEMs.„Assemblednacelleunits:ExportincentivesinIndiaandpracticallyzeroimportdutyontheexportedgoodsmakeIndiaanattractivelocationfortheassemblyofWTGnacelles.ThisstrategyisbeingusedbymultipleWesternOEMsincludingVestas,SGRE,Nordex,andEnercon.Fortheabovesegments,OEMsfocusondiversificationfromChinawhilekeepingcostslow,creatinghighexportattractivenessforIndianunits.Inotherareas,suchastowersandpowerelectronics,highautomationinmanufacturingandreshoringsentimentswilllikelyreducedependenceonimportsintheUSandEU.Forgenerators,accesstoREEswillbeakeydeterminingfactorforwhetherChinacontinuestosupplytheworld.ItshouldbenotedthatoverallopportunitiesaresubjecttochangesinpolicyregimesintheUSandEUonimportdutiesandtaxies,orshiftsinprotectivetacticssuchasanti-dumpinginvestigationsandcountervailingduties(asseeninthecaseofIndiatowers).Indiamustfocusonsecuringlong-termassociationsandrelationshipsformutualbenefitwithitstradingpartners.RecommendationsforpolicymakerstoseizegrowthopportunitiesAsIndiapushestowardsits2030renewableenergygoalanditslong-termtargetofnetzeroby2070,windpowerispoisedpropelthecountry’seconomicgrowthandcleanenergytransition.ThismomentumcanonlybestrengthenedifthegovernmentofIndiaundertakesaholisticstrategytoshoreuplarge-scaleinvestmentinthedomesticmarketwhileaccentuatingitscomparativeadvantagesfortheglobalexportmarket.Thefollowingmeasuresarerecommended:Domesticmarket:1.EnablethegreenopenaccessmarketfortheC&Isegment:AfterthenotificationoftheGreenOpenAccessRulesbythecentralgovernment,onlyafewstatessuchasWestBengal,Karnataka,andPunjabhaveadjustedtheirrespectivepolicyframeworksinsupport.Obstaclesforgreenopenaccesssubsist,suchasreliabilitycharges,limitingprovisionsforpowerbanking,powerwheelingandtransmissioncharges,allofwhichmakegreenpowerconsumptionthroughopenaccessexpensive,comparedtoothergrid-basedoptionsroutedthroughtheDISCOMs.CentralandstategovernmentsmustbuildconsensuswithDISCOMsforenablinganeconomicroutefortheC&Isegmenttoaccessgreenelectricity.Thismustbeaccompaniedbyregularmonitoringandreportingofprogress,includingprogressinincreasingtheopenaccessconsumerbaseandunitsconsumed.2.Implementarobustbiddingmechanismforprocurementofwindpower:Thecentralgovernment’s“GuidelinesforTariffBasedCompetitiveBiddingProcessforProcurementPowerfromGridConnectedWindPowerProjects”notifiedinJuly2023providesforasingle-stage,two-part(TechnicalBid&FinancialBid)biddingprocess.However,italsosupportstheadoptionofane-reverseauctionmechanismbytheprocurer/intermediateprocurerattheirdiscretion.Thelatterinclusionmayinclineprocurementtowardsdownwardpricepressureandextremetariffreductionsinsubsequentroundsoftenders,counteractingthepurposeofthenewguidelineswhichseektocurtailthevolume-seekingbehaviourofbidderswholatersurrendertheawardedvolume.Adequatechecksandbalancesmustbeintroducedtoensurechallengesthathavesloweddownwindgrowthinthepastarenotreintroduced.3.Prioritisetheresolutionofoperationalandgrid-relatedchallenges:CentralandstategovernmentshavemadeFromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202764progressinaddressingobstaclestowindgrowth,butoperationalchallengesstillpersist,suchasavailabilityofland,conversionofland,andrightofway-relatedissues.Prioritisationofnon-ISTSprojectsbystatessuchasGujaratandcongestionduetogrowinggriddemandinstatessuchasKarnatakahavefurtherslowedprogress.SupportforbothISTSandnon-ISTSprojectsbystategovernmentsthroughawin-winpartnershipamongkeystakeholderswouldfurtheraccelerateeffortstowardsthecountry’swindenergytargets.4.EnsurecomplianceofthewindRPO:SeveralstateshaveproactivelynotifiedawindRPOtosupporttheuptakeofwindpower.Whilethisisawelcomestep,theremustbepolicymeasurestoensurecompliance.Fordefaultsornon-compliance,policymakersshouldconsiderasuitablepenaltymeasure.RegulatorycommissionsshouldmakespecificefforttoavoidinstanceswherethewindRPOhasbeenallowedtobemetbyanothertechnologyRPO.ThecommissionshouldcarefullyconsidertheeffortsmadebyDISCOMstomeetthewindRPObeforegrantingsuchsubstitutions.Mostimportantly,theRPOtrajectoriessetbystatesmustaggregatetooveralltargetsofthecountryandthismustbesupportedthroughalignmentbetweenthecentralandstategovernmentsontheRPOcalculationmethodology.5.Planalogisticscorridor:Themovementofwindprojectmachineryandequipmentrequiresaccesstoadequatesurfacetransportinfrastructure.Duringthecourseofprojectimplementationandequipmentshipment,sufficientlyplannedcorridorswouldhelptoreducethetimeandcostspentontransportationandlogistics,andhencereduceoverallprojectcoststhatwouldbepassedontotheconsumer.Thecreationofadequateinfrastructuremightalsosupportrepoweringofexistingunitswithnewhighercapacityandlargerturbinesandblades.6.Considerindexationtomitigatecommoditypriceshocks:Inrecentyears,anexpectedsurgeincommoditypricesledtochallengesintheeconomicviabilityofawardedprojectsinIndiaandglobally.Pricevolatilityinsteel,copper,aluminium,andothermaterialscriticaltowindenergycansignificantlyimpactCAPEXofprojects.PolicymakersshouldconsideraccountingforcommoditypricefluctuationinbiddingguidelinesandPPAdocuments,andintroducearobustmechanismsuchasindexationtosafeguardmutualinterestsinthetimelyandcost-efficientcommissioningofprojects.7.Promotedomesticinnovationinwindmanufacturing:Atpresent,windturbineprototypesareprimarilydevelopedandtestedoutsideIndia.Measurestoencouragedomesticprototypedevelopment,testing,researchanddevelopment(R&D),suchasinnovationgrants,mayhelptoboostlocalinvestmentinthesupplychainandsupportthescale-upofwindmanufacturinginIndia.Exportmarket:1.Easedocumentationandapprovalsforthedutydrawbackscheme:Inconsultationwithwindsectorstakeholders,policymakersshouldconsidermeasurestofacilitategreaterconvenienceandeasewithregardstodocumentationandapprovalsrequiredforavailingthedutydrawbackscheme.Thismayhelptoreleasecapitalandresourceswhichisoftenheldupbythissegmentoftheprojectlifecycle,andaccelerateprojecttimelinesanddeliverability.2.LeverageFreeTradeAgreements(FTAs)tostrengthenthepositioninthewindexportsmarket:IndiacurrentlyhasFTAswiththeUS,AustraliaandtheUAE,andisundertakingnegotiationstosecureanFTAwiththeGulfCooperationCouncil,theUKandEU.Inthecontextoftheseagreements,thecentralandstategovernmentsmayconsiderthedesignandimplementationofwindexportscorridorstosupportenhancedlogisticssupportandlowertradebarriersfordomesticmanufacturers.GWEC.NET653.Introduceatargetedproductionlinkedincentive(PLI)schemeforthewindsector:WhileIndiahasastrongwindmanufacturingbase,thereareareaswhereagreaterpushisrequiredtofurthersupportmanufacturingforbothdomesticandexportmarkets.IntroducingaPLIschemetoincentiviseinvestmentincastings,gearbox,nacelleassemblyandothercomponentscouldincreasetheverticalintegrationofthedomesticmanufacturingindustry.Box3presentsacasestudyonhubandgearboxcastings,highlightingmorethan50%dependenceonChinafordomesticallyusedhubcastingsandmorethan90%dependenceforgearboxcastings.APLIschemetowardsthecomponentwouldhelpIndiainachievingself-sufficiencyandreduceitsfiscaldeficit.SuchincentivesarealsocriticalforIndiatoupgrademanufacturingbeyondsub-2MWwindturbinesandimprovequalityoflocallysuppliedcomponentsfordomesticandexportmarkets.4.Nurtureanoffshorewindecosystem:TheGovernmentofIndiahasnotifiedanindicativeseabedleasetendertrajectoryof37GWinthisdecadetoharnessitsoffshorewindpotential.Offshorewindprojectdevelopmentrequiresacomplexecosystemofassemblers,manufacturers,logisticsspecialistsandsupplychainplayers.DiversifyingandexpandingthelocalecosystemforoffshorewindwouldboostIndia’sparticipationinoffshorewindlogisticsinoutsidemarkets,suchasSriLankaandSouthEastAsia.Throughsuitablepolicy,institutional,andfinancialmeasures,suchastaxholidaysanddutywaivers,anoffshorewindecosystemmaybenurturedinthestatesofGujaratandTamilNadu.5.Lowerimportdutiesonrawmaterialandwork-in-progressgoods:WindmanufacturinginthecountryrequirestheimportofcertainrawmaterialswhicharenotmanufacturedorharvestedinIndia,suchasnon-standardsteel,permanentmagnetsandbalsawood.Provisioninglowerimportdutiesorevendutywaiversforrawmaterialsandcertainwork-in-progressgoodsmaysupportamoreregionallyandgloballycompetitivecostofmanufacturingforIndiainthewindindustry.Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-202766GWEC.NET67Ascountriesseektoreduceconcentrationriskincleanenergysupplychains,theyareintroducingpolicyschemesandeconomicincentivestoshoreupdomesticmanufacturingandproduction.TworecentexamplesincludetheIRAintheUSandtheGreenDealIndustrialPlanintheEU:IRAintheUSInAugust2022,theBidenadministrationlaunchedacomprehensivelandmarkFederalLawcalledtheInflationReductionAct,whichaimstocurbinflationbyreducingthedeficitandinvestingindomesticenergyproductionwhilepromotingcleanenergy.Previously,policyuncertainty,includingtheimpendingexpirationoftheproductiontaxcredit(PTC),hadputmuchofthewindindustry’ssupplychainatrisk.However,theIRAextendedthePTCandinvestmenttaxcredit(ITC)forwindandsolarthrough2024,beforetransitioningtoatechnology-neutraltaxcreditthatwillremaininplaceuntil2032orwhenpowersectoremissionsfallto75%of2022levels,whicheverislater.ThemaingoaloftheIRAistodevelopandsecuresupplychainstoinsulatetheUSfromgeopoliticalandlogisticrisksforthesecleanenergycomponents,bystimulatingdomesticmanufacturingandachievingcost-competitivenessthrougheconomiesofscale.Keyprovisionsinclude:„Advancedmanufacturingproduction65:Taxcreditsfordomesticproductionandsaleofqualifyingwindcomponentssuchaswindturbineblades(2cents),nacelles(5cents),andtowers(3cents)forthetotal65AdvancedmanufacturingproductionpolicybytheUnitedStatesofAmerica(Pageno.153)ratedcapacity(expressedonaperwattbasis)ofthecompletedwindturbine;anda10%creditforcriticalmineralsproduction.WithAMPCinplace,thesepartscouldcutmanufacturingcostsby10-30%.Incombinationwithtariffsonsomeimports,domesticmanufacturingcouldbeonacost-competitivefootingwithimportedequipment.„Qualifiedadvancedenergyproject66:Investmenttaxcreditsof6%(Baserate)or30%(alternativeratesatisfyingconditions)foranewcategoryofprojects:thosethatre-equip,expand,orbuildqualifieddomesticmanufacturingorindustrialfacilitiestoassistintheproductionorrecyclingofrenewableenergyproperty.66QualifiedEnergyProjectcreditbyauthenticatedU.S.Governmentinformation(Pageno.174)„Domesticcontent67:AdditionaltaxcreditsabovethebaseITCforqualifiedadvancedenergyprojectsiftheprojectusescertaincomponentsproducedintheUS(domesticcontentthresholdis40%forprojectsinstalledbefore2025,or20%inthecaseofoffshorewind,andrisesto55%after2026,foroffshorewindafter2027).GreenDealIndustrialPlanintheEUInMarch2023,theEUlauncheditsGreenDealIndustrialPlanwithtwoimportantpiecesoflegislationwhichcouldsupportitsbroaderenergytransitionandsupplychainresiliencegoals.First,theNetZeroIndustryActtargetstheincreaseinmanufacturingcapacityofnetzerotechnologiesin67DomesticcontentbyU.S.Governmentinformation(Pageno.171)Appendix68theEUandsupportsinvestmentinthisfield.ThesetechnologiesincludesolarPVandsolarthermal,onshoreandoffshorerenewableenergy,battery/storage,heatpumpsandgeothermalenergy,electrolysersandfuelcells,sustainablebiogas/biomethane,carboncaptureandstorageandgrids.Theactfocusesonsimplifyingthepermittingprocessesfornewfactoriesandupcomingwindprojects.Italsoidentifiesstrategicdependenciesacrosssupplychainsandproposesactionstoremoveexistingbottlenecksandincreasesupplychainresilience.SecondistheCriticalRawMaterialsAct,whichaimstoimprovesourcingofmaterialsusedinbatteries,solarpanels,windturbinesanddigitaltechnologies.TheactexploresopportunitiesforminingandprocessingmorerawmaterialsinEuropewhileforgingnewtradedealswithpartnersthatcandiversifysupplyroutes.ItalsoemphasisestheimportanceofrecyclingandreusingkeymaterialstohelpincreasetheresilienceofEurope’ssupplychains.TheActsetsbenchmarksfordomesticcapacitiesalongtherawmaterialsupplychainby203068:„Atleast10%oftheEU’sannualconsumptionforextraction,„Atleast40%oftheEU’sannualconsumptionforprocessing,„Atleast15%oftheEU’sannualconsumptionforrecycling,„Notmorethan65%oftheUnion’sannualconsumptionofeachstrategicrawmaterialatanyrelevantstageofprocessingfromasinglethirdcountry.Unliketheincentive-basedapproachfortheIRA,whichearmarksUSD367billionforincentiveinstrumentstopromotedomesticmanufacturing,theEUlaunchedmoregoal-orientedpoliciesaimedatspeedinguppermittingforwindprojectsandpromotingextractionandprocessingofrawmaterialsintheEU.Othermarketsleadinginonshorewindinstallations,suchastheUK,Poland,Japan,SouthKorea,andTaiwan,areintheprocessofcreatingpoliciesaimedtostabiliseanddomesticisetheironshorewindsupplychain.Theseinclude68CRMAgoalsfromGWECGlobalWindReport2023effortstosetLCRs(LocalContentRequirements)ofatleast50%ormoreby2030,aswellasmorerigidapproachessuchasprescriptivelistsofcomponentsforlocalisedproduction.Fromlocalwindpowertoglobalexporthub:IndiaWindEnergyMarketOutlook2023-2027Sponsor70GlobalWindEnergyCouncilRuedeCommerce31,1000,Brussels,BelgiumT.+32490568139info@gwec.net@GWECGlobalWind@GlobalWindEnergyCouncil(GWEC)@GlobalWindEnergyCouncilMEC+INDIA510,SuncityBusinessTower122003,GolfCourseRoadGurugram,IndiaT:+911244802700DENMARKNordreFasanvej113,22000FrederiksbergCopenhagen,DenmarkT:+4535433277
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