In a country that has struggled to build conventional electricity infrastructure, India has enjoyed surprising early success with the development of wind energy.
Much of this is due to the rise of a strong entrepreneurial culture in the sector, thanks largely to Tulsi Tanti, the chairman and managing director of Suzlon Energy, India’s biggest wind energy company, as well as early government recognition of the industry in terms of preferential regulation.
When Mr Tanti started out as a textiles manufacturer in Gujarat, western India, he quickly ran into the problem dogging most small manufacturers in the country: power shortages. He bought two small wind turbine power generators, which together were worth more than his textile plant.
His initial aim was to secure independent power for his factories but he soon saw the potential for the wind business as government moved to provide tax and other incentives for renewable energy resources to help alleviate climate change.
"Wind energy provides a disproportionate share of power in India relative to rest of world at the moment," said Arvind Mahajan, national industry director with KPMG. "SuzIon have done a fairly good job in creating the infrastructure that has facilitated the growth of wind energy in India by working with state governments in terms of regulatory regime."
Today, wind and other alternative energy sources account for about 5.0 per cent of India’s energy needs, compared with an average of 2.0 per cent globally, according to the United Nations Environment Programme.
Total installed capacity for wind energy was 6,190 megawatts last year but there is potential for 45,000 megawatts of installed capacity, according to the Indian government. KPMG ranks India fourth in the world in terms of wind energy potential. The development of the sector has partly been driven by the business model championed by Suzlon but increasingly being adopted across the industry, including by Denmark’s Vestas, the biggest wind energy company.
Under this model, Suzlon and its peers not only provide equipment but often secure land, install the turbines and operate the plants. This allows external investors with no expertise in wind energy to enter the business, increasing the investment pool available for the sector. State governments have helped by demanding that 10-15 per cent of their energy should be from renewable sources.