Execution challenges slow down wind power projects from going onstream

Execution challenges slow down wind power projects from going onstream

MUMBAI :
Execution challenges, a decent financing atmosphere and regulatory delays in tariff adoption are slowing down the tempo at which new wind energy crops are being commissioned. This, together with persevering with challenges in grid curtailment and important fee delays from distribution corporations (discoms) have turned investor sentiment on the sector detrimental.

The wind energy sector witnessed a capability addition of two.1 GW in FY20, enhancing over the 1.6 GW added in FY19. Nevertheless, the precise capability commissioned final fiscal was solely 2.5 GW, towards the 7.5 GW that ought to have been commissioned by March 2020 as per the timelines supplied.

“The gradual execution of the capability awarded by the central nodal companies and the state utilities is due to the continued execution challenges, a decent financing atmosphere and regulatory delays in tariff adoption from the regulators up to now,” Girishkumar Kadam, Sector Head & Vice President – Company scores, ICRA, stated in a press be aware. “These challenges are additional augmented by the antagonistic influence of the lockdown imposed to regulate Covid-19 pandemic on the execution of under-construction initiatives in addition to on the revenues and money flows of discoms. Subsequently, ICRA’s outlook on the wind vitality sector continues to stay detrimental. The wind energy capability addition is estimated to stay modest within the vary of two.0-2.5 GW in FY21.”

These challenges have additional led to a slowdown within the tendering exercise, with no wind energy undertaking awarded submit August 2019. Whereas the federal government company Photo voltaic Vitality Company of India (SECI) has issued a young for 2000 MW underneath Tranche IX, the reverse public sale for this tender is pending.

“The slowdown in electrical energy demand progress in FY20 and with the demand de-growth anticipated in FY2021 amid Covid-19, the incremental wind capability requirement is estimated to stay decrease than projected earlier for FY2021-23,” Vikram V, Affiliate Head & Assistant Vice President – Company scores, ICRA stated. “In consequence, the potential for brand spanking new tenders within the wind energy section stays restricted within the close to to medium time period. Nonetheless, long run prospects for wind vitality stays intact given the sturdy coverage focus and improved tariff competitiveness.”

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