Climate protection Energy policy Energy transition

<p>India’s onshore wind sector set for acceleration<br>Policy changes have created a strong project pipeline and almost 20 GW of new wind could be installed by 2026<br>Wind power is needed to meet fast-rising electricity demand and decarbonisation goals<br>Covid, supply chain disruptions and fierce competition have delayed project implementation<br>Interest in wind-solar hybrids and round-the-clock power is rising<br>Policy changes are having a strong positive effect on the outlook for new capacity</p><p>Onshore wind is becoming a mainstay of India’s power system and with good reason. Projects are being developed below the cost of new coal plant, the country’s primary source of power, providing a clean and cheap alternative to fossil fuels.</p><p>Energy demand grows continuously<br>Total power demand is rising by a compound average growth rate (CAGR) of about 6%, which is expected to increase electricity demand from 1,276 TWh in 2021 to 2,172 TWh by the end of the decade.</p><p>However, despite having over 40 GW of installed onshore wind capacity, the pace of wind deployment has slowed.</p><p>Following an impressive CAGR of 13 percent from 2012-2016, installed wind capacity growth declined to an annual average of 5 percent from 2016-21.</p><p>Targets set by the government mean this rate of growth needs to accelerate to 15% over the next decade, according to analysis by the Global Wind Energy Council (GWEC).</p><p>Expansion of wind energy stalls<br>The slowdown can be attributed to a number of factors, such as the introduction of competitive bidding, then, in 2020-21, the impact of the Covid-19 pandemic followed by ?disruptions to the supply chain and delays due to India’s monsoon period.</p><p>In 2021, only 1.45 GW of wind was installed, compared with an expected 2.3 GW. This was higher than in 2020 (1.14 GW), but lower than in 2019 (2.07 GW).</p><p>Four fifths of these deployments resulted from central government auctioning, with the remainder roughly split between state government tenders and the commercial and industrial (C&I) sector.</p><p>Fierce competition in the bidding process has led to a concentration of projects in the states of Gujarat and Tamil Nadu, which have both the best wind resources and the lowest cost of land.</p><p>However, this has created bottlenecks, for example in gaining grid access, leading to delays and cost overruns.</p><p>Capital-constrained distributors<br>In addition, GWEC warns that some projects face cancellation as low-cost bidding in the current tender design leaves no room to absorb inflationary pressures in the wind supply chain.</p><p>Cancellations have also occurred as a result of delays in signing Power Supply Agreements with the country’s cash-strapped distribution companies (discoms).</p><p>The poor financial condition of the discoms continues to hamper state-level tenders for wind projects. GWEC expects about 1.8 GW of state level projects to come online by 2025.</p><p>Offshore wind to provide major source of clean power for India<br>?</p>