Wind Turbine Market in India & South East Asia Outlook Update (Q1 2020)

Wind power capacity in India continued to grow robustly in 2019, supported by the central government reforms as well as state-level policies. Furthermore, reduction in power tariffs due to improvement in the cost and performance of wind power over the year have also driven high wind capacity additions in India. However, India installed only ~3 GW of wind capacity in 2019 which is close to 34% below the estimated targeted wind capacity. The dismal response of the wind capacity addition is mainly attributed to the financial stress of turbine makers, land acquisition issues and grid connectivity delays and denting investors sentiments due to re-opening of wind PPAs. Moreover, given the already stress and weak funding atmosphere, any misstep would magnify the risk of non performing assets (NPA) in wind power segment.

Vietnam is rising as Southeast Asia’s new wind hero, with the world’s biggest offshore wind farm to be built off its windy coast total installation of 1000 MW by 2021.

With South East Asia’s economy ballooning the countries has made great strides to boost wind power to keep pace with soaring energy needs and bring down carbon emissions, introducing more ambitious wind power targets and favourable policies that have attracted investors from all over the world. Vietnam is forecast to install 1 GW of onshore and offshore wind capacity by 2021, up from the current 327MW, surpassing Thailand which is at present Southeast Asia’s front-runner in installed wind capacity. Hence, global wind players are likely to turn their heads to South east Asian market.

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Key Trends

• Indian wind turbine manufacturers to witness lower revenue from operations as compared to global wind turbine manufacturers. For example, India’s Inox Wind swings to loss in fiscal Q4 2019 - Inox reported a net loss of INR 274.7 million for the third quarter of fiscal 2019/20 against a profit of INR 16.9 million a year earlier.
• Siemens Gamesa likely to strengthen its market leadership in Q1 2020 in India if Suzlon’s project execution challenges continue.

Key Investments

• In Q1 2020, the budget outlay was INR 9.20 billion ($130 million) for wind power in India.
• The National Thermal Power Corporation (NTPC) has floated a tender for 600 MW of interstate transmission system (ISTS) connected wind energy projects in the country.
• GE Renewable Energy to deliver wind turbines for 300 MW wind farm in Gujarat - GE Renewable Energy has secured a contract from the EDF Renewables and SITAC Group joint venture to supply and install wind turbines for 300MW

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