Vestas is betting on specific wind turbines from India to expand its presence.
Vestas India, which is the arm of Danish wind turbine manufacturer Vestas Wind Systems, is looking
Vestas India, which is the arm of Danish wind turbine manufacturer Vestas Wind Systems, is looking to expand presence in India and also design products suited for this market. The company recently launched a new wind turbine generator suited for low-wind sites in India.
Speaking with Business Standard, senior executives of the company said Vestas products can be utilized for the upcoming tenders, which are mostly for hybrid projects.
“All the good windy sites are gone and repowering of old sites is not available. So, the new sites, which are coming for wind power projects, have a low profile of wind. The turbines we have launched are well suited for that,” said Vickram Jadhav, vice-president, sales, Vestas India. “The second reason is that most of the auctions are through hybrid projects. This entails a particular profile of energy output throughout the year, throughout the day. This turbine captures low wind pockets very well. So, it’s very well suited for all that is in the pipeline, which the government wants to do.”
The product has been designed specifically with the Indian climate and wind conditions in mind, but it’s also intended for global low-wind sites across the world.
“We are localizing the product and this is supported by a number of investments in India. As a foundation also, we have a significant footprint in India. Our factories, research design centers, and all of that have been leveraged into bringing this product into the Indian market at this time,” said Thomas Scarinci, senior vice-president, product management, Vestas.
With this, the company would also see expansion in employment opportunities at its three units – Ahmedabad, Chennai, and Coimbatore.
“We already have 2,600 employees in India and with this new product launch, we will add close to 1,000 people for doing the ramp-up. At our three sites, we will see an increased activity level for supporting new products and also other activities to support Vestas globally,” said Scarinci.
The expansion plans of the Danish major comes at a time when India saw its lowest-ever wind power capacity addition during the last fiscal year. India added 1,800 Mw of wind power during 2019-20, half of the year before it.
In 2017, the Centre retired the 25-year-old feed-in-tariff (FiT) mechanism to award wind projects and introduced competitive bidding. Capacity addition fell to a record low of 650 Mw during the same period. But the tariffs also fell by half from the existing rates to ~2.5/Mw. Under the FiT mode, the electricity regulator decides the tariff.
This led to unsold inventory with major wind turbine manufacturers and leading players such as Suzlon Energy and Inox Wind succumbing to cost-cutting and employee retrenchment in 2018-19.
“We’ve taken up around 600 Mw out of this 13 Gw which was awarded (under the bidding regime) till now in the wind segment. We’ve completed most of these projects on time, except when the customer was facing some challenges. But if you see the sector as a whole, out of the 13 Gw, not more than 2 Gw has been commissioned till now,” said Jadhav.
“People will be a little bit more cautious and do due diligence for projects in a much better way before they go in and bid. Also, the central agencies have increased the commissioning period for wind power projects to 24-30 months from the earlier 12-18 months,” said Jadhav.
Vestas is hopeful that upcoming tenders for ‘solar-wind hybrid’ power projects and newly introduced round-the-clock renewable power projects would add some momentum in the sector.
“At present, India is not a major contributor to our global revenues. We spend much more on R&D than our peers. We believe one needs to develop products and technology, according to the market. We have done that for the Indian market. We will now see the momentum on bidding, signing PPAs (power purchase agreements), and investors supporting projects,” Jadhav said.