NITI Aayog in its recommendations to MNRE proposed manufacturing of major components of wind turbine generators (WTGs) in India with a minimum 60 per cent of local content and mandatory certification and approval of all IPRs, software and hardware from the OEMs of foreign origin, especially from neighbouring countries, along with re-locating of their Data Centres in India.
The proposals came amid concern raised by CEO & President-Asia-Pacific, Vestas Wind Systems to the National Security Advisor of India about the increasing inroads being made by Chinese wind turbine OEMs in India.
JM Financial said the policy recommendations are likely to discourage new players such as Sany and Goldwind due to high entry-level costs of localisation and regulatory approvals, potentially benefitting domestic players namely Suzlon Energy Ltd and Inox Wind Ltd, which have healthy order books and strong order pipeline.
As per MNRE, India has 12 manufacturers with 28 wind turbine models. Prominent ones are Adani New Industries, Envision Wind Power, GE India, Suzlon Energy, Vestas Wind Tech, Inox Wind, Senvion Wind Tech, Siemens Gamesa, and Sany Wind. Among them, Siemens Gamesa is exploring options to exit Indian market given headwinds in its global operations.
Wind turbines exchange information with utility operators and aggregators through Power Plant Controllers (PPC). It is used to regulate and control the networked inverters, devices and equipment in order to meet specified set points and change grid parameters.
"The PPC software is of critical importance and connects the wind farm directly to the power grid exposing it to cyberattacks, including the compromise of grid operations, especially when managed remotely by owners stationed outside India," JM Financial noted.
NITI Aayog has recommended classifying wind power generation assets as critical energy infrastructure. The government guidelines (RLMM) currently focus on Nacelle assembled in India. NITI Aayog recommends modifying it with focus on minimum 60 per cent of local content for major components like Nacelle, Blades, Tower, Hub, and Controller. It emphasised mandatory certification and approval of all IPRs, software and device/ hardware from the OEMs of foreign origin especially from neighbouring countries along with re-locating of their Data Centres in India.
"India wind energy market has become very vibrant with healthy order book with manufacturers (2929MW/2656MW, Suzlon/Inox) and more healthy order pipeline (15 GW). Existing players are contemplating capacity expansion along with probable entry of new players, particularly from China," JM Financial said.
"Current policy recommendations are likely to discourage new players with increasing entry-level costs of localization and regulatory approvals. We believe ensuing policy actions will more likely be encouraging for domestic player’s viz. Suzlon Energy and Inox Wind," it said.