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Acciona India has aggressive plans to increase our footprint in both wind and PV

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In Conversation with, Mr. Narayan Kumar, Development Director, Acciona Wind Power India

 

1.What is current installed capacity of your company and how has been your journey so far?

ACCIONA is one of the foremost Spanish business corporations with a global footprint. We are leaders in development and management of infrastructure, renewable energy, water and services.

ACCIONA's has been in India for close to a decade, with primary presence in renewable energy. ACCIONA was the first Spanish company to install and operate a wind farm in India. We have operating wind farms with a capacity of around 175 MW.

2.What is your current order book position and what are the projects that you are currently bidding for?

Acciona India is an Independent Power Producer. Unlike Original Equipment Manufacturers (OEMs), we don’t maintain an order book. We are focused on development of both solar and wind energy investments in India.  Currently we are evaluating opportunities at both the national level as well as in different states to participate in auctions for both PV and wind space.

3.What is the impact of Reverse bidding on the wind energy sector?

Wind energy sector in India is at cross roads because of introduction of reverse bidding since February 2017. It would have been ideal if the industry had been provided with a 12-15 month period for transition from feed-in-tariffs to competitive based reverse bidding. Now that the reverse bidding has been introduced, this has created a sense of uncertainty in the industry and is bound to affect capacity addition for 15-18 months. We need to evaluate the sustainability of tariffs of around INR 3.40 – Rs 3.50 / kWh.

It’s interesting to see how future bids will play out since we are reading reports about one of the winning bidders from the Feb 2017 auction already backing out from its commitments. We have also witnessed the same trend in the PV space as well. There is perhaps the need for the industry to think through their bid strategy and evaluate pricing on rational, sustainable, long-term basis.

4.What are your growth plans for the next couple of years?

Acciona India has aggressive plans to increase our footprint in both wind and PV. It would be difficult to share specific numbers at this time. We are evaluating several greenfield as well as brownfield growth opportunities. We are long-term investors and are guided by the sustainability of returns. 

5.Would you like to add anything else about wind sector?

When India’s first ever auction of wind projects worth 1 GW capacity early this year threw up record low tariffs, none of realised that it would become a flashpoint for the resentment of power distribution companies (discoms) against generators in the days ahead. But that is exactly what we are seeing today.

Discoms have stopped signing power purchase agreements (PPAs) with wind power generators, leaving a big question mark hanging over the future of 3 GW of assets underconstruction. If the logjam is not broken soon, the government’s renewable power capacity addition could get off track, compromising effortsto rein in emissions and fight climate change.

Discoms believe that they were paying very high tariffs to IPPs and are reneging on their signed commitments. Discoms’ refusal to sign PPAs has forced the Centre to intervene and asked for signed commitments to be honoured. Such blatant change of tack has serious repercussions on the country’s renewable energy programme as well as India’s perception with global investors. The Ministry of New and Renewable Energy (MNRE) has already cautioned discoms that if PPAs are not signed, there would be no further wind capacity addition either in 2017-18or 2018-19.

Even if wind auctionsrestart at this stage as is widely envisaged, the projects would be commissioned only over the next 15 to 18 months.In such a case there would be no wind capacity addition in 2017-18 and a major part of 2018-19. This would mean that most atates would not be able to meet their non-solar RPO obligations.

This would also throw a spanner in the plans of OEMs who have made large investments in capacity as well as inventory. They will go through a difficult phase on this account, though this is expected to be temporary.

Re-Powering – A growthopportunity

Repowering is something which needs to be absolutely encouraged. Vintage turbines occupy some of the best wind sites across India. Policies or guidelines may require changes as we have not made a big headway into repowering.

Again it’s perhaps premature to comment as there are issues like existing substation capacity, current PPAs, disposal of old turbines and current owners of land who are reluctant to give up their land etc.

Power being a concurrent subject; it’s possible to have a state repowering policy. The bottom line is, repowering can bring in about a capacity addition on an estimate of 1 GW every year for the next 2-3 years. This can possibly increase if grid connectivity and substation capacity can be augmented.