RECs to help Indian wind grow by up to 15%, says Suzlon boss

Suzlon chairman Tulsi Tanti claims the Indian wind-energy market is set to grow by 10-15% this fiscal year, despite the end of the accelerated depreciation (AD) tax incentive and the generation-based incentive (GBI) schemes.

Tanti says India’s renewable energy certificate (REC) scheme is driving the market forward and attracting large numbers of independent power producers (IPPs) to the market.

He says 20 major IPPs – led by Suzlon clients Mytrah, Techno Electric, Green Infra, Renew Power and Greenko – have a combined project pipeline of around 15GW, which they aim to install during the next five years.

Driven by the REC framework, India’s market could soon reach a level of 3.5-4GW of installations per year, Tanti adds.

At the same time, Tanti claims that the Indian government is viewing “favourably” a proposal from the wind industry to reintroduce AD, which was cut earlier this year.

Meanwhile, Suzlon says it is in talks with its bank lenders to increase its working capital facilities by around $200m in order to speed up its project execution in India.

Suzlon's India-based wind turbine installations in the first quarter of its 2012/13 financial year were just 60MW, compared to 304MW the previous three months – contributing to what Tanti calls a “disappointing” quarter.

Suzlon officials say that a short-term increase in the working capital facilities should allow the company to recover lost time over the coming quarters, and to meet its full-year India installation target of 1.5GW and its revenue guidance of $5-5.3bn.

The officials say that working capital facilities are normally negotiated at the beginning of the fiscal year to match expected project deliveries, but that negotiations with banks to ensure that Suzlon could meet bond commitments in June had contributed to this not happening.