Bids For Standalone Wind In Tranche XIV In June 2023 Awarded Between INR 3.18-3.24 Per kWh: GWEC

The India’s Wind Energy Market Outlook 2023-2027 released by the Global Wind Energy Council, says that by the end of 2022, total renewable energy installed in India stood at 121 GW of total installations with wind contributing 35% of this, making India the fourth-largest wind market in the world, in terms of cumulative installed capacity.

GWEC in its report forecasts an increase in the solar and wind hybrid projects in the C&I market and indicates an increase in penetration of wind in the power mix. Supporting this, a recent report from the Central Electricity Authority (CEA) indicates that a more cumulative installed capacity of 100 GW might only be achieved by 2030, compared to the central government’s target of adding a cumulative 140 GW installed wind energy capacity by 2030.

The solar supply chain faced similar pressures in 2022, primarily due to a hike in polysilicon prices post-2020 owing to manufacturing bottlenecks in China. Certain policy interventions in India and high demand for solar panels kept prices high until Q1 2023. As polysilicon manufacturing has returned to normal levels, the price of solar cells and modules is expected to decline

Cost competitiveness of wind energy
The average cost of conventional energy-based power is reportedly higher than the power tariff from
wind, making wind power already competitive with traditional power. However, wind generation costs in
the country have recently increased. Bids for standalone wind in Tranche XIV in June 2023 were awarded in the range of INR 3.18-3.24 per kWh as compared to tenders awarded in 2020 which lies in the range of INR 2.99-3 per kWh. India saw a 10-12% jump in generation costs of wind projects between 2020 and 2022.

Onshore wind

While onshore wind power has been the backbone of India’s RE journey, a growing domestic and international appetite exists to tap into India’s significant offshore wind resource. Harnessing the full potential of offshore wind energy will be needed to lever the country towards its net zero target by 2070.

India is expected to install 21.2 GW by 2027. This installation rate could go up to 26.2 GW in the ambitious case and 17 GW in the conservative case.

Supply chain

India has 11.5 GW of nacelle manufacturing capacity in Karnataka, Maharashtra, Tamil Nadu, Gujarat. The report states that there is an export potential avenue for manufacturers to enhance India’s position within the global wind supply chain since only 2 GW was utilized and installed domestically in 2022. 

Offshore wind 

The Indian offshore wind market is expected to accelerate towards 2027 with annual installations increasing from 1.8 GW in 2022 to 2.8 in 2023, 3.7 GW in 2024, and peaking at 5 GW in 2025 in the base case. Overall, India’s wind market offers an opportunity for 21.1 GW of installations from 2023-2027.

Surge in domestic volumes 
In 2022, the Indian market exhibited a robust expansion with the award of 4.7 GW tenders including standalone wind and wind-solar hybrid projects in state and central tenders. Between January to June 2023, nearly 3.5 GW tenders have been awarded and another 5 GW has been announced. The introduction of tenders by both central and state government agencies and the high engagement of C&I developers point towards promising growth.