Energy-hungry India eyes role as "wind superpower"
By Alistair Scrutton
NEW DELHI (Reuters) - India might be painted as a pollution-spewing, global-warming economy of 1 billion people but it is also one of the world's biggest wind power users, part of a focus on renewable energy mostly unnoticed in the West.
Years of tax incentives have helped make India one of the fastest-growing markets for wind power, a major component of renewable energy that will be high on the agenda of the December 3-14 UN climate change meeting in Bali, Indonesia.
The Bali conference comes as international pressure mounts on India to ensure its growth gets cleaner. The International Energy Agency (IEA) warned this month of the climatic dangers of "unfettered" energy demand growth in India.
"When it comes to renewable energy and wind power, India can look the West in the eye and say -- look at our years of progressive policies," said Santosh Kamath, a wind power specialist and associate director at KPMG consultants.
Wind power in India is still a minority sector compared with the Asian giant's overall energy needs that are dependent on coal and oil.
With its reliance on dirty fuels, India will become the world's number three carbon emitter by 2015, the IEA says.
But renewable energy, of which the vast majority is wind power, accounts for more than 7 percent of India's installed generation capacity -- a rate that compares favorably with much of the rest of the world.
India is the world's fourth largest wind-power market.
"Wind power is growing tremendously. If you want a wind plant you'll have to book a year in advance," said Chandra Bhushan, associate director at the New Delhi-based Centre for Science and Environment.
"There's been years of progressive policies and recognition for a long time that India will face a shortage of fossil fuels."
India, with its thousands of miles of coastline, is suited to wind power. Its wind power potential is estimated at 45,000 megawatts (MW) -- about a third of total energy consumption.
There is also little of the concern in India seen in the West over wind turbines ruining scenic vistas -- scores can be seen, for example, outside Jaisalmer's ancient fort in Rajasthan, one of India's most popular tourist sites.
A WIND SUPERPOWER?
The boom brings in profits, the kind of virtuous circle experts say is needed for renewable energy to really work.
At Vestas RBB India Ltd, one of India's largest wind-power firms, sales rose 30 percent in 2006 and the company forecasts growth of about 40 percent this year, company officials say.
India's rise to what supporters call a "wind superpower" is due to tax breaks in the 1990s and to Tulsi Tanti, chairman of Suzlon Energy, India's biggest wind energy company.
Troubled by power shortages in the 1990s for his textile business in western India, he bought some wind turbines and soon realised it could be a good business. His company quickly became the pioneer in the sector.
Wind power has also been helped by some states setting targets that 10 percent of their power should come from renewable energy.
High capital costs and the fact wind is intermittent -- plants often run at a quarter of their capacity compared with 80 percent capacity for nuclear power -- mean that it is expensive and the sector has needed tax incentives to survive.
Rakesh Bakshi, managing director of Vestas RBB, said provisions were still needed until economies of scale mean "we can give conventional energy a run for its money."
But as oil reaches $100 a barrel, and with India suffering shortages that see factories often relying on diesel generators, firms are increasingly looking at wind.
Sarvesh Kumar, deputy managing director of Vestas RBB, said many clients were large manufacturers, such as cement or textile firms, concerned about the long-term energy costs.
KPMG estimates that wind power costs around 3.5 rupees a kilowatt hour, compared with 2.5-3 rupees for imported coal.
"Wind energy is almost price competitive in many places," T.L. Sankar, senior energy adviser at the Administrative Staff College of India, told a renewable energy conference.
And global warming might only add to its attraction.
"It can only gain in importance because of concerns about climate change," added Kamath.
(Editing by Y.P. Rajesh and David Fogarty)