Investors looking towards sustainable investments have a few avenues that they consider and given the 7,500 km coastline of India, and the country being boxed in complex geography, wind energy sector is a natural option. The current capacity of wind energy in India is approximately 44.089 gigawatts (GW) as of August 2023, making it the fourth largest installed wind power capacity in the world. This capacity is part of India's overall renewable energy sources, which account for 30.08% of the country's total installed power capacity, excluding large hydro projects. The Government of India has set a target of achieving 500 GW of renewable energy by 2030, out of which 140 GW is expected to come from wind power. Given the ambitious targets and rampant growth in the sector, take a read through our article to understand the wind energy sector and its intricacies.
Industry Overview
The onshore wind energy sector is expected to continue dominating the market, while the offshore wind market is also gaining momentum, with the government targeting 30 GW of offshore wind installations by 2030. Some of the key trends in the industry include:
Onshore Wind Energy Dominance: India is primarily an onshore wind energy market due to the significant wind-producing areas on land. The country has the fourth-highest wind installed capacity in the world, with a total installed capacity of 44 GW as of the end of 2023. The onshore wind energy installed capacity is expected to continue increasing, driving market growth.
Offshore Wind Market Acceleration: The Indian offshore wind market is expected to accelerate, with annual installations projected to increase in the coming years. The government has set a target of 30 GW offshore wind installations by 2030, and the country offers an opportunity for 21.1 GW of installations from 2023-2027.
Government Policies and Investment: Favourable government policies, increasing investment in upcoming wind power projects, and the reduced cost of wind energy are expected to drive the market during the forecast period. The Government of India has established a national renewable energy target of 500 GW of wind by 2030, providing widespread business opportunities to the market in the coming years.
Contribution to Renewable Capacity: Solar and wind energy currently contribute more than 50% of the total renewable capacity in India. The country has committed to reaching net zero carbon emissions by 2070 and wind energy will be a major contributing factor to the goal.
These trends indicate a positive outlook for the wind energy industry in India, driven by government initiatives, increasing investment, and the country's vast potential for both onshore and offshore wind energy.
Challenges
The wind energy industry in India faces challenges like:
Lack of Adequate Transmission Infrastructure: Wind power is an intermittent energy source, and the lack of a strong transmission network hinders the efficient transport of electricity from wind farms to consumers.
Land Acquisition Issues: Setting up wind farms requires large tracts of land, and the complex and time-consuming process of land acquisition in India leads to delays and cost overruns in wind energy projects.
Competition from Solar Sector: The declining cost of solar energy and the availability of abundant sunlight in India have led to a preference for solar offerings, posing a challenge to the growth of the wind energy sector.
Policy Changes and Disrupted Supply Chains: Changes in pricing mechanisms, policy uncertainties, and disrupted supply chains have impacted the growth of the wind energy industry.
Technological and Financial Challenges: The development of wind energy projects faces challenges related to the availability of suitable wind turbines and components, the need for specialised skills and expertise, and the availability of financing for new and innovative technologies.
Grid Unavailability and Transmission Constraints: Inadequate grid and transmission infrastructure, along with delays during the COVID-19 pandemic and heavy monsoons, have slowed down project activity in the wind energy sector.
Addressing these challenges will be crucial for the continued growth and optimisation of the wind energy industry in India. Proactive measures such as enhancing grid infrastructure, streamlining land acquisition processes, providing stable policy frameworks, and promoting technological innovation and skill development can help overcome these obstacles.
Prospects
The Indian offshore wind market is projected to see annual installations increasing from 1.8 GW in 2022 to 5 GW in 2025, offering an opportunity for 21.1 GW of installations from 2023-2027. The Indian wind power installed capacity is expected to register a CAGR of more than 8% during this period. India's wind energy sector is led by the indigenous wind power industry and has created consistent progress. The expansion of the wind industry has resulted in a sustainable ecosystem, project operation capabilities, and a manufacturing base of about 10 GW per annum.
India also has the potential to dominate the global wind energy supply chain with the country showing huge opportunities in the export market. There can be an addition of 22 GW and 26 GW of wind energy capacity over the next few years, and between now and 2030. A total of 100 GW of installed wind capacity is slated to be achieved. With proactive policy and industrial strategy support, India could increase this to 140 GW, establishing the country as a renewable industrial hub in Asia and beyond.
In comparison, the global wind energy market is experiencing significant growth, with India being positioned to become a key player in the global wind energy supply chain. The global wind industry is witnessing evolving supply chain dynamics, and Indian companies have exciting prospects to serve the global demand for wind equipment supply.
As case studies, it’s pertinent to look at some of the successful, major wind energy projects in India:
Muppandal Wind Farm: This is the largest wind power plant in India, located in Muppandal, Tamil Nadu. It has a total capacity of 1500 MW with nearly 3000 wind turbines.
Jaisalmer Wind Park: This is India's second-largest and the world's fourth-largest operational onshore wind farm, located in Jaisalmer district, Rajasthan. It has an installed capacity of 1,064 MW, making it one of the largest operational onshore wind farms globally.
Suzlon’s Kutch Wind Park: This is Asia's largest wind farm, located in Kutch, Gujarat. It has a total capacity of over 1100 MW4.
Brahmanvel Wind Farm: This wind farm is located in Maharashtra and has a capacity of 87 MW4.
Dhalgaon Wind Farm: This wind farm is located in Maharashtra and has a capacity of 50.4 MW4
These projects are part of India's efforts to harness its significant wind energy potential and contribute to the country's renewable energy goals.
Here are some of the notable companies working in the wind energy sector:
Company Name | Market Cap | P/E Ratio | Last Traded Price |
Tata Power Company Ltd | ₹ 85,619 Cr. | 25.0 | ₹ 268 |
Suzlon Energy Ltd | ₹ 54,641 Cr. | 147 | ₹ 40.6 |
Waa Solar Ltd | ₹ 94.9 Cr. | 8.83 | ₹ 71.6 |
Websol Energy System Ltd | ₹ 759 Cr. | - | ₹ 196 |
Synergy Green Industries Ltd | ₹ 385 Cr. | 45.8 | ₹ 273 |
Ujaas Energy Ltd | ₹ 45.1 Cr. | - | ₹ 2.25 |
Surana Solar Ltd | ₹ 135 Cr. | - | ₹ 27.4 |
Urja Global Ltd | ₹ 641 Cr. | 300 | ₹ 12.2 |
Gita Renewable Energy Ltd | ₹ 47.8 Cr. | 8.02 | ₹ 116 |
The Gist
In conclusion, India's wind energy sector stands as a foundational player in the nation's pursuit of sustainable energy solutions. With the current capacity of approximately 44.089 gigawatts, India ranks as the fourth-largest in installed wind power globally. The onshore wind energy sector continues to dominate, while offshore wind installations are gaining momentum, aligning with the government's ambitious targets. Despite facing challenges such as transmission infrastructure limitations, land acquisition complexities, and competition from solar energy, the sector's positive trajectory is evident. The prospects for India's wind energy industry remain promising, with the offshore wind market projected to see substantial growth and the potential to establish the country as a renewable industrial hub. As India progresses toward its renewable energy goals, success stories like the Muppandal Wind Farm and Jaisalmer Wind Park underscore the sector's significant contribution to India's renewable energy landscape.
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