Since January 2011, Kailash Tarachandani has occupied the position of CEO at Kenersys India Pvt. Ltd, a wind turbine manufacturer from the $2.5-billion Kalyani Group. Earlier, he worked for Vestas as Director – Business Development and for Alstom Power Customer Services as Director – Strategic Projects. Tarachandani talks to Renu Rajaram about the potential of wind energy in India and Kenersys’ plans to expand its footprint in the wind energy market.
How important is renewable energy and clean technologies to emerging markets like India?
Clean technologies have become an integral part of the trade fraternity. It is very important as we are now faced with higher pollution on account of usage of fossil fuels for generation of electricity; larger import bill for imported oil and question mark on safety of nuclear power and environmental issues connected with hydro projects; and availability of fossil fuel is the question of the hour.
What is the potential of renewable energy in India?
The potential of wind energy in India is estimated to be as high as 1 lakh MW and the installed capacity is around 17,000 MW as of March 2012 and the major contributor is wind sector. The distribution of renewable energy resources is not uniform across India and wind energy programmes are available in nine states only. These states have formulated favourable policies and guidelines for installations of wind farms.
Then why is there such low focus on this sector?
The low focus is due to land related issues, evacuation problems pertaining to generating power and delay in payments from certain state electricity boards.
How much will renewable energy in general and wind energy in particular contribute to India’s total power generation capacity by 2020?
It is planned to have 20 per cent of India’s total power generation from renewables, including wind, by 2020.
What are some of the key trends you have observed in the wind energy market in India in recent years?
According to World Market Update 2011, the global wind market produced a record for new installations in 2001, with 41,712 MW installed capacity, but at a much lower growth rate than the 2005 to 09 period.
The market growth in India last year has experienced significant growth. India saw an increase to 3,300 MW of new installations. India introduced a Renewable Energy Certificate (REC) market in 2011, adding ‘the accelerated depreciation’ as tax benefit and the recently introduced Generation Based Incentive (a fixed premium per kWh). The volume of trade in the REC market has steadily increased since its inception in early 2011.
Several states have introduced the REC mechanism as an alternate route for the investors to sell the power to a third party and contribute to reduction of global warming. Various state electricity regulatory commissions have increased the renewable purchase obligations (RPO) thereby making it mandatory for various state utilities and distribution companies to buy green power thereby providing an opportunity for WTG manufacturers.
Also, it is evident that more and more IPPs are looking at wind power projects as a safe option considering that the average size of the turbines available in India has increased and is close to 1.25 MW. Also, the multi MW turbines, due to their increased hub height and larger rotor diameter, tend to generate better energy even in low wind regimes thereby increasing the return of investment (ROI).
What are some of the challenges facing private companies in the renewable energy sector?
The biggest challenge today is acquiring land for the wind farms due to local issues, lack of clarity and transparency, evacuation bottlenecks, and an inconsistent policy environment. We are developing our own land bank along with evacuation infrastructure to cater to the next three to four years business plan.
What are the prospects from private and government owned utilities and programmes in the wind power sector?
Major public sectors and state-owned utilities have already invested in the wind sector in a big way and are in the process of investing in wind energy sector through the tendering process. Most of the states have formulated policies and guidelines for installation of WTGs and several policy drivers like GBI and REC are going to accelerate the growth in the years to come.
We are in close touch with several state nodal agencies that facilitates and help us in setting up the wind farms.
Renewable energy is more expensive than other technology. How can we reduce per-unit cost in this sector?
Capital cost per megawatt is high due to increased cost on account of transportation of components to site, higher raw material and labour cost, increase in statutory fees payable to the state nodal agencies, and electricity board for permission.
Though the capital cost per megawatt is slightly on the higher side, the levellised cost per KWh or cost of energy (COE) is very less as compared to any conventional power plants. This is possible due to the fact that the running cost is negligible in wind industry since the raw material is wind.
By introducing advance technology to address the class III & IV sites, the COE/levellised cost can be further reduced.
Can you tell us about your company?
Kenersys is a venture of $2.5-billion Kalyani Group Company, a leading Indian industrial conglomerate with more than 50 years of history and global presence in auto component sector. Kenersys was established in 2007 as an integrated wind energy company focused on design, assembly, marketing and servicing of world-class wind turbine generators to cater to the requirements of the global markets. The global technology centre called Kenersys GmbH is located at Muenster, Germany.
Kenersys has two operating entities comprising experienced professionals from the wind industry for assembling, marketing and servicing wind turbines – Kenersys India focusing on Asia-Pacific markets and Kenersys Europe GmbH focusing on European markets.
The company’s strengths are in the key areas of its business – world-class design and engineering capabilities, global supply chain management skills, and vast operation and maintenance experience. Kenersys has end-to-end design capability from components to wind turbine systems. The company’s design facility in Germany has design experts with a proven track record in the industry.
Kenersys has developed a 2.0-MW turbine with 82m rotor diameter (Model K82) and a 2.5-MW turbine with 100m rotor diameter (Model K100) with the objective of making investments in the wind energy using Kenersys turbines, an economically attractive proposition for its customers. Kenersys is soon introducing K110 2.4 MW for Class III & IV wind sites.