Q.Brief us about Inox Wind, the products and services you offer and the scope of you technology partnership with AMSC Austria GmbH?
Inox Wind is a part of the diversified Inox Group, a $ 2 billion professionally managed business group. The Group has a presence across diverse businesses including Industrial Gases, Refrigerants, Chemicals, Engineering Plastics, Carbon Credits, Cryogenic Engineering, Renewable Energy and Entertainment.
Inox Wind is a fully integrated player in the wind energy market. In FY 2012-13 Inox Wind emerged amongst the fourth largest wind turbine manufacturer in the country. Inox Wind has manufacturing plants for key components like Blades, Towers, Hubs and Nacelles which ensure high quality, most advanced technology, reliability and cost competitiveness. The WTG’s are equipped with DFIG (Double Fed Induction Generator) technology, has one of the largest rotor diameters 93 meters & 100 meters in its class and the turbines are Type III turbines which are suitable for Indian climatic conditions and low wind sites. Inox Wind offers turnkey solutions for the entire wind power project from concept to commissioning. This includes wind assessment, arrangement of land and power evacuation (sub stations and power lines), infrastructure development, all statutory approvals, supply of WTG’s, civil works, erection & commissioning and long term operation & maintenance of wind farms.
Inox Wind has a global license from AMSC Windtec, Austria – a subsidiary of USA based American Superconductor Corporation. AMSC is a leading energy technology company and leader in alternative energy. Around 15 GW turbines based on AMSC Windtec technology are running successfully across the globe.
Q.What was the strategic thinking behind partnering with Continnum Energy? Tell us more about the projects that you jointly are working on?
Firstly, would like to mention that we do not have a joint venture with Continuum Energy, we have recently been awarded one of the largest wind turbine orders in the country from Continuum Energy. It’s a 170 MW turbine order which is to be supplied over the next four quarters for one of Continuum Energy’s sites in Madhya Pradesh. Continuum Energy aims to be one of the largest renewable IPP’s in the country and is indirectly majority owned by Morgan Stanley Infrastructure Partners. We believe that Continuum Energy has an extremely professional team whose aims is to follow the philosophy of self-development of environmentally-friendly, high yielding wind farms after diligent study of the wind resource, careful planning of construction program and obtaining a fully-committed, conservative financing structure.
Q.Shed some light on the Inox Winds recently launched 100 meter variant of the 2MW wind turbine? With this launch what are the opportunities and growth that you are looking at?
This turbine is a variant of our hugely successful 2 MW platform with a 93 meter rotor diameter. Inox Wind’s 100 meter rotor diameter turbine is expected to be a game changer in the wind industry in India. We have launched this product on two platforms, an 80 meter hub height as well as a 92 meter hub height. We expect energy yield to increase anywhere from 12 – 22% depending on the variant and site conditions. This product will reduce the cost of generating a unit of electricity and will boost IRR’s for IPP’s. With this launch we expect to tap virtually every low wind site in the country which could be classified between Class III & Class IV wind conditions. We believe this will open up a huge potential for us to exploit given that energy yield increases by 22% which will make many sites here to unremunerative worth investing in. We are looking at growing in excess of 50% CGR over the next 2 years.
Q.The wind industry world over is witnessing a boom in giant turbines with rotor diameter 150m and above, how do you view this development and your views on the future course of the industry?
There is a lot of development work happening in the wind turbine industry globally, people are investing not only in larger rotor diameters but also segmented blades. Besides testing different types of materials to build blades to lower the cost of electricity as well as to be able to transport them to fairly complex sites. Having said that, I believe the potential in India for such large rotor diameters is limited, until & unless the on ground infrastructure improves. There are few sites in India through which blades in excess of 110 rotor diameters can navigate. While the future is bright in the short term I don’t think such large rotor diameter turbines would be able to come in India. Maybe five to ten years down the line we would be seeing turbines with rotor diameters of 150 odd meters being executed across India, either by way of better grown infrastructure which enables us to transport these blades or by way of segmented blades which enable the deployment of such turbines.
Q.Though India is regarded as a major manufacturing hub for wind turbines, still the industry is facing headwinds for the last couple of years, what according to you are the major challenges the industry is facing? Your suggestions to overcome these challenges?
We face a couple of key challenges which if we address; we should be able to grow in a fairly stable manner.
- The past few years have seen a lot of policy flip-flop where in GBI and AD were withdrawn. While the GBI was reintroduced last year, Accelerated Depreciation is yet to be reintroduced; we hope AD is reintroduced at the earliest.
- Feed-in Tariffs (FIT’s) across the country were not remunerative enough, while some states have not announced remunerative tariffs these are again for periods for up to one year we hope that most states announce reasonably remunerative tariffs for multi years so that investments can be planned properly.
- The cost of funds is very high in India. We hope the huge corpus of the National Clean Energy Fund is utilized to bring down the cost of capital as well as we also urge that there is a separate quota for renewables because when we are clubbed within the power sector, the large thermal power players take away all the funds.
- We need RPO enforcement to be mandatory, if this requires the Electricity Act to be appended then perhaps this should be done. By not doing so over the past few years, most states ERC’s are waiving the requirement of RPO by the respective discoms as a result of which there is no market for renewable energy. We also believe the nascent REC market needs to be supported by way of various policy initiatives such as RPO enforcement being made mandatory so that investors who have invested in this model are protected and are given a decent return. There are a host of other challenges which the sector faces but if we can address some of the challenges that are mentioned above, I believe the sector will be doing well in the years to come.
Q.What are your expectations from the new government at the centre? What steps would you suggest to realise the true potential of the wind industry?
The following are the key expectations from the new government:-
- We are hoping that Accelerated Depreciation (AD) should be reintroduced because a large number of small investors and captive consumers are not being able to invest in renewable energy since Accelerated Depreciation was withdrawn two years ago.
- We expect low cost funds to be made available to renewable energy by leveraging either on the National Clean Energy Fund or by having a separate quota for renewable energy in the banking sector.
- We expect the Budget to have some clarity with respect to tackling RPO norm enforcement across states; this could be by way of amending the Electricity Act or any other such mechanism.
- We would expect the Budget to carry on with the ATI exemption; this is necessary so that the investors come forth and invest in large sums in the power sector given that India is very shored of energy.
- Lastly, we are expecting the Budget to exempt the wind turbine components from Special Additional Duty (SAD) to make it more competitive to sell wind turbines in India.
Q.What are the salient differences between the wind energy sectors, globally and in India?
Today, most of the turbines being offered in India are the ones which are available globally as well. We are as advanced as any other turbine manufacturer globally and have some of the best products being sold in India. On the contrary, the cost of turbines in India is probably cheaper globally or on par with China and the cost of turbines in Europe & USA is far higher than the cost of turbines per megawatt in India. Some differences between Indian and global turbines would be that globally we are able to utilize larger rotor diameters as well as larger turbines because the road infrastructure is good enough to transport such blades also globally as some countries, European nations exhaust on-shore potential they are moving to off-shore potential which while more expensive than on-shore is necessary once land gets exhausted. Also globally, renewable energy sector is being given a lot of incentives. I think India also needs to be more proactive in giving enough incentives to the renewable energy sector.
Q.As a wind power producer, what is the generation capacity and the revenue that you are targeting and how do you plan to achieve?
As a wind power producer our IPP Inox Renewables owns about 250 MW of generation capacity. We expect to have revenues of about 250 crores and we aim to grow this company at the rate of 100 megawatts per annum.
Q.Elaborate on your manufacturing facilities and future CAPEX program?
Inox Wind manufactures key WTG components in-house and source other components and raw materials from varies reputed suppliers. We have manufacturing facilities in Una, Himachal Pradesh and in Ahmedabad, Gujarat. Inox Wind has set-up these manufacturing facilities to cover all the major components of a wind turbine. Needless to say, this gives us full control on the quality and reliability of the final product and helps us keep our costs at competitive levels.
Nacelle and Hub – We manufacture nacelles and hubs at our plant located in the Una district of Himachal Pradesh. Our nacelle and hub manufacturing plant has an annual installed production capacity of 400 sets of nacelles and hubs. Our nacelles and hubs undergo more than 100 quality checks during different stages of production to identify any potential defects. The plant has both grid and captive power supply with a view to ensure uninterrupted production.
Rotor Blades – Our rotor blade manufacturing facility is located in the Ahmedabad district of Gujarat. We have imported critical machinery and equipment, including blade moulds, resin infusion machines, resin mixers, sawing, drilling and cutting machine and vacuum equipment, with a view to ensuring high quality output. We also have our own test bench facility to test the performance of our rotor blade sets, which we believe makes us one of the very few WTG manufacturers in India with their own test bench facility.
Tower Plant – Our tower plant has an annual installed production capacity of 150 towers. The Tower plant is housed in the common complex along with the Rotor Blade Plant. Due to the importance of the rolling process in the production of towers, we use high precision rolling mills imported from Italy. We have the capability to manufacture towers that are 68 meters, 78 meters and 98 meters in height.
CAPEX – We aim to expand our blade manufacturing capacity to bring it on par with our Nacelle & Hub capacity. We are also contemplating expanding our Nacelle & Hub capacity keeping in mind the new government’s aims and push on renewable energy that would probably require us to set up a new blade facility in the near future. There are a whole host of third party tower fabricators who are located closer to the wind farm sites and we hope to leverage on their manufacturing capacities to reduce the cost of logistics going forward.
Q.What projects at Inox wind are you currently excited about and what makes Inox Wind competitive in this market?
We are extremely excited about the new 100 rotor diameter that we have recently launched, besides the fact that we have entered Madhya Pradesh in a big way this year. We are also contemplating entering Karnataka & Andhra Pradesh in a big way over the course of this year. We are also working on a whole host of new products which would increase energy efficiency and reduce the cost of generation. In the near future, you would surely be hearing about these new launches. The fact that makes Inox Wind competitive in this market is that we have one of the best engineered products; we focus on service, on execution as well as managing the entire chain of activities that go into sourcing to supplying the end turbine, I think that is what makes us extremely competitive in this market.
Q.What are your plans for Inox Wind in the next three years?
In the next three years we hope to become the market leader. We also hope that we would have spread to all the seven windy states of this country. Besides that we are also contemplating some actions to take this company to a global arena.