Wind Can Pump $18 Billion Gross Value into India’s Economy: Report

Considering a business-as-usual scenario, India is forecasted to install nearly 21.5 GW of wind capacity between 2022 and 2026

February 24, 2022

/ Wind

In its recently published report, the Global Wind Energy Council (GWEC) finds that India could save an extra 229 million metric tons of CO2 emissions over the lifetime of a wind farm while also creating more than a million green jobs.

The report ‘Capturing Green Recovery Opportunities from Wind Power in Developing Economies,’ written in collaboration with BVG Associates, highlights the vast and largely untapped socio-economic and environmental opportunities that wind energy could unlock in a group of developing economies from 2022 to 2026.

The report focuses on five emerging economies – Brazil, India, Mexico, the Philippines, and South Africa – facing particular challenges due to COVID-19, but with significant untapped wind energy resources that could unlock rapid economic growth under green recovery measures.

The case studies based on these countries intend to outline the impact of a green recovery strategy where the clean energy favoring public policy helps accelerate the deployment of wind projects over the next five years.

This approach would support countries in their progress to meet energy and climate goals and enable them to realize a range of socio-economic benefits from long-term job creation to cleaner air and water conservation.

The report shows the importance of a clear vision and policy commitment to mobilize private investment in wind energy and provides tailored policy and regulatory recommendations for each country.

India has the fifth-largest installed capacity of renewable energy in the world and the fourth-largest installed wind energy capacity. The wind industry in the country was affected by the pandemic with difficulties in supply chain logistics, import of raw materials, and movement between states for workers.

The report outlines the wind energy outlook for India and provides recommendations for an accelerated path towards green recovery.

Project pipeline scenarios

In India, considering a business-as-usual scenario, the report forecasted that almost 21.5 GW of wind capacity will be installed between 2022 and 2026. If a green recovery is implemented, there would be a fast acceleration of wind capacity from 2024 onwards, which would result in almost 31.2 GW being installed between 2022 and 2026. This results in a potential upside of 9.7 GW of wind energy installed over the five years.

Forecast of Installed Capacity in Two Scenarios

The report suggests that in India, wind energy alone will create 565,000 direct and indirect full-time equivalent (FTE) job-years between 2022 and 2026 in the development, construction, and installation phase, in a business as usual scenario. In the green recovery scenario, 795,000 direct and indirect FTE job years will be created in the same period.

Around $11 billion direct and indirect gross value added is created from wind energy installed in India between 2022 and 2026 in the business-as-usual scenario over the lifetime of the wind farms. In comparison, the green recovery scenario shows $18 billion in direct and indirect gross value added.

Barriers to wind energy

The report finds several barriers to accelerated wind energy deployment despite wind energy presenting the vast potential for decarbonizing India’s national grid. The report points out incidences of delayed or canceled tenders, last-minute renegotiated power purchase agreements and delayed payments for developers and other stakeholders.

The report also claims that the lack of an adequate pipeline of projects and auction visibility creates uncertainty for developers and investors and hampers enthusiasm. No auction pipeline is published in advance, preventing wind sector stakeholders from undertaking advanced resource planning.

Due to private land price escalation and massive demand for land in areas with good wind speeds, land availability is an issue. For instance, if the land has previously been used for agricultural purposes or has significance to the local population, the government faces significant obstacles when auctioning it for wind project development.

Recommendations for green recovery

The report recommends broad actions for policymakers to accelerate green recovery and expand the use of wind energy in India.

The report suggests improving wind industry visibility by establishing an auction pipeline with a 3-4 year timeframe. This will allow developers time to prepare their bids, increase investor certainty and increase competition by de-risking the market for smaller developers.

Increasing the reliability and certainty of the auction process through more rigorous terms and conditions or a robust legal framework is another suggestion put forth in the report. This will help prevent recurring issues of delayed or canceled tenders and delayed payments for various stakeholders. The report also suggests establishing a national policy and conditions for land acquisition for wind projects. Once an overarching framework is set up, this should gain public trust and help alleviate the obstacles of auctioning land for wind project development.

Realigning public stimulus funding with energy and transition goals is another suggestion. While the government took early measures to mitigate the impacts of COVID-19 on the construction and supply chains of the renewable energy industry, much of public stimulus spending is still directed to the fossil fuel sector. Redirecting funds into the renewables sector can help close the gap between current installation rates and clean energy targets by 2030.

According to the recent data released by the Ministry of New and Renewable Energy, India added 1.45 GW of wind capacity in 2021, a 30% year-over-year (YoY) increase compared to 1.11 GW installed in the previous year. India had over 40 GW of installed wind capacity at the end of 2021.