You are here

Indian wind market shift benefits US firm

GE to profit from BRIC country’s move to bigger wind power projects

US firm GE is benefiting from a shift to bigger wind power projects in India

A US energy firm is benefiting from a shift in India’s wind power market, according to reports. A move in the BRIC country’s market toward bigger, more efficient wind energy projects is benefiting US firm General Electric (GE), Bloomberg has said. Meanwhile, dominant turbine suppliers India’s Suzlon and Denmark’s Vestas are seeing cash dwindle.

“The market is opening up for new turbine makers,” said Sunil Jain, chief operating officer of Green Infra, a New Delhi-based wind-farm developer, according to Bloomberg. “The growth of GE turbines in the last year is more than what they achieved in 15 years.”

Developers in India are building more productive wind farms, ditching a business model set up by Suzlon and Vestas that handed completed farms to investors seeking tax relief rather than energy. The end of the tax benefit in March favoured newer developers that separate project development from turbine orders to boost power output, IDFC Private Equity Co said.

“A major development for the better is the emergence” of the new developers, IDFC Director Nithin Kaimal told a conference in New Delhi last week, Bloomberg reported. “There’s a greater emphasis now on the quality of the asset being developed. It’s healthier for the industry because it means much better economics.”

Suzlon, India’s biggest turbine maker, had a 35 per cent share of the country’s wind market in the last financial year, down from 50 per cent two years earlier, according to the Indian Wind Turbine Manufacturers’ Association (IWTMA) Vestas was the fifth- biggest supplier, having been third-largest two years earlier.

GE Gains

They’ve ceded share to competitors such as GE, which agreed to supply at least 450MW of turbines over three years to Hyderabad-based developer Greenko Group Plc (GKO), Greenko President Mahesh Kolli said in July. GE, which conducts turbine-only deals, didn’t install a single machine in India in the previous three financial years, IWTMA data show.

Vestas CFO Dag Andresen said last week that the company was “scaling down” in India as it forecasts USD 636m of cash losses this year. Suzlon, which said that a lack of working capital was constraining its ability to complete orders after reporting a fourth quarterly loss, defaulted on USD 209m of convertible bonds last month.

The retrenchment of established producers also opens the door for Chinese turbine makers to enter India, Jain said, reported Bloomberg.

The number of turbine suppliers in India last year almost doubled to 24 from two years earlier, IWTMA data show. The country has the world’s third-biggest wind market, after China and the US.

In March a US study was conducted that found India’s wind power to have 30 times more potential than previously estimated.