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A Resilient Supply Chain Could Make India A Wind Manufacturing Hub

Context

According to the Global Wind Energy Report 2023 of the Global Wind Energy Council, India has the potential to develop into a major hub for wind energy manufacturing worldwide. (GWEC).

Relevance

GS Paper-3: Economic Development, Biodiversity, Environment

Mains Question

Discuss the obstacles that must be overcome in order to overcome the potential for growth in the Indian wind energy sector. (250 Words)


Major highlights

  • According to the report, India needs to develop a plan for a dependable raw material supply chain in order to strengthen its position in the wind energy manufacturing industry.
  • India is the world’s second-largest market for gearbox manufacturing and the second-largest supplier of blades and generators in the Asia-Pacific (APAC) region, with an annual manufacturing capacity of 10–12 GW for wind turbine generators.
  • As a result of recent global events, such as the diversification of supply chains by American and European turbine OEMs to ensure supply security in the wake of COVID-19, India has taken a more significant position in the world’s wind supply chain.
  • India needs a dependable raw material supply chain, including rare earth metals and non-standard steel, as well as for specialised tasks like casting and forging, in order to maintain its leadership position in the wind energy manufacturing industry.
  • The report urges maintaining the current import duty exemption for machinery and parts made of non-Indian materials like balsa wood and pultruded carbon fibre.
  • The report also emphasises the significant function that MSMEs, or micro, small, and medium-sized enterprises, play in the Indian wind manufacturing industry.
  • For businesses involved in the onshore wind industry and those looking to enter the offshore wind manufacturing industry, the government should take into account targeted production-linked incentives.

Note:

  • Wind turbines built and positioned on the land are referred to as onshore wind power.
  • Offshore wind power is the term used to describe wind farms constructed on shallow water, typically in the ocean.

Favorable conditions for the generation of wind energy in India:

  • Ample land is available: India has a sizable landmass with a lot of room for open space, which makes it a good location for large-scale wind power projects.
  • Favorable wind conditions: India is perfect for wind power generation due to its high wind speeds in coastal regions and some interior regions.
  • Government support: Through a number of policies and programs, the Indian government has actively promoted renewable energy, including wind power.
  • Growing demand: Economic expansion, urbanization, and industrialization are all contributing factors to India’s rising demand for electricity. In order to meet the rising demand for electricity, wind power can be used.
  • Cost competitiveness: Wind energy is becoming more and more affordable in India, making it a viable alternative to more conventional energy sources.

Issues Associated:

  • Land Acquisition: Land acquisition for wind power projects can be difficult, particularly in densely populated areas where land is expensive and scarce.
  • Financing: Because of their high upfront costs and lack of long-term financing options, renewable energy projects can be difficult to finance.
  • Grid integration: Due to the intermittent nature of wind, which can affect the grid’s stability, integrating wind power into the national grid can be difficult.
  • Infrastructure: Building the transmission lines and other wind power-related infrastructure in remote and inhospitable locations can be difficult.
  • Changes in government regulations and policies may leave investors uncertain, which could discourage investment in the industry.
  • Technological developments: Due to the wind energy industry’s rapid technological development, it may be challenging for current projects to maintain their competitiveness.
  • Another significant issue facing the Indian wind energy sector is the high cost of capital. Due to India’s high borrowing costs, wind power project financing may be prohibitively expensive.

The government has taken a number of initiatives to support wind energy:

  • National Wind Energy Mission: The National Wind Energy Mission was established by the Indian government in 2014 to hasten the growth of wind energy in the nation. By 2022, the mission hopes to generate 60 GW of wind energy.
  • Competitive Bidding: To lower the cost of wind power generation, the Indian government has instituted competitive bidding for wind power projects. As a result, the price of wind energy in India has decreased.
  • Generation-Based Incentives: To promote the production of renewable energy, the Indian government offers generation-based incentives (GBIs) to wind power developers. Developers receive GBIs based on the volume of electricity produced.
  • Grid Connectivity: To enhance grid connectivity for wind power projects, the Indian government has been working. To ensure the smooth transfer of renewable energy to the grid, the government has created a designated green energy corridor.
  • Research and development: In order to advance technology and lower costs, the Indian government has been spending money on research and development in the wind power industry. The National Institute of Wind Energy (NIWE) was established by the government to advance industry research and development.

Steps to Take:

  • To increase the effectiveness of wind turbines and lower costs, there is a need for ongoing research and development. The Indian government ought to keep funding the field of wind energy research and development.
  • India’s offshore wind energy potential is substantial and largely unrealized. To capitalise on this potential, the Indian government needs to develop offshore wind energy projects.
  • The reliability and consistency of the power supply can be increased by using hybrid energy systems, which combine wind power with other renewable energy sources like solar power or energy storage. The development of hybrid energy systems in India should be encouraged by the government.
  • For wind power to expand in India, grid connectivity and stability must be improved. To ensure the seamless integration of wind power into the grid, the Indian government should continue to invest in the development of transmission infrastructure and energy storage systems.

March 2024
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