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India has a pipeline of over 10 GW of auctioned onshore wind
projects in different stages of development. This pipeline reflects
an excellent opportunity for wind turbine manufacturers competing
for a share of the Indian market. However, the policy transition
and uncertainty in India has resulted in several turbine vendors
struggling to align themselves with the changing market realities.
The current policy environment is marred by very low auction prices
which has compressed the profit margins of suppliers. Furthermore,
installation delays due to administrative challenges have resulted
in a sector slow down, idling manufacturing capacity for key
suppliers. These challenges, coupled with the shift in demand
towards larger high-yield turbines suited for India's wind resource
profile, are set to change the future of the onshore wind supply
chain in the country.
Figure 1: Largest onshore wind vendors in India by
installations | 2015 - 19
India's two largest local turbine vendors - Inox Wind and Suzlon
have been badly hit by the slowdown in installations. Execution
delays have stalled revenue realization and increased debt burden,
adding uncertainty about these companies' ability to execute
orders. Other small local vendors have either closed or cut down
their operations, owing mainly to the increasing fiscal duress.
These factors indicate that the vendors heavily dependent on the
local demand may not outlive the current market slowdown.
The Indian market is predominantly supplied by 2.X MW turbines,
with an expected transition toward the 3.X MW products. Major
vendors in the Indian market have traditionally relied on turbines
with larger swept area coupled with higher hub heights within the
2-3 MW range to boost yield. With the influx of foreign original
equipment manufacturers, the technology accessible to India now
ranges from 2.X MW to 5.X MW. As India retains its focus on
decreasing costs and increasing yield, the move toward larger, more
site-specific turbines seems inevitable, making it tough for local
players to keep up as their portfolios are exclusively focused on
sub-3 MW turbines.
The financial stress of local companies creates an opportunity
for global turbine vendors to grab the market share by offering
India-specific solutions. IHS Markit expects that global players
including Siemens Gamesa, Vestas, General Electric, Nordex Acciona,
and Envision will not only be able to sail through the current
slowdown, but they will even benefit from it as the market
consolidates in favor of global players.
Learn more about our coverage of the India power and renewables
market.
Ankita Chauhan is a Senior Analyst covering South Asia
renewable market for IHS Markit. Indra Mukherjee is a Senior Analyst covering Global onshore
wind markets for IHS Markit.
