Facilitating offshore wind in India

NARRATOR Welcome to the DNV Talks Energy podcast series. Electrification, rise of renewables and new technologies supported by more data and IT systems are transforming the power system. Join us each week as we discuss these changes with guests from around the industry.

MATHIAS STECK As today's guest in our podcast series I'd like to welcome Steve Sawyer, Secretary General of the Global Wind Energy Council, GWEC, and Chairman of the FOWIND Consortium to join us to discuss the very current issue of facilitating offshore wind in India, and the opportunities that exist for foreign players to contribute to India's offshore wind industry. Welcome Steve.

STEVE SAWYER Thanks for having me Mathias.

MATHIAS STECK Steve, before we start to talk about today's topic facilitating offshore wind in India which the acronym FOWIND actually stands for, could you tell us a bit about GWEC as well as the FOWIND Consortium?

STEVE SAWYER Okay, well very quickly then, Global Wind Energy Council is a trade association representing all of the major national and regional associations in the wind energy sector both onshore and offshore as well as of course the main companies that are active usually in more than two continents. And our role is both to represent the sector with inter-governmental institutions like the International Energy Agency, IRENA, the IPCC, the climate negotiations of course, but most importantly to open up new markets. And we have been very much involved in China, India, Brazil, South Africa, Mexico, now India offshore and also Argentina. But it's the India offshore part which is the genesis of the FOWIND Consortium facilitating offshore wind in India which is a joint project between ourselves, you of course at DNV are a key player and also two Indian institutes, the Centre for Science, Technology and Policy, CSTEP, based in Bangalore and WISE, the World Institute for Sustainable Energy in Pune, and our other government partner, two government partners, the Gujarat Power Corporation, and the National Institute for Wind Energy based in Chennai.

MATHIAS STECK Thanks Steve. Now let's jump into today's topic, facilitating offshore wind in India. And let us set the scene for a start. So, India is obviously a country with substantial and growing demand for electricity and has agreed to the recent Paris COP21 Agreement which demands a global target of keeping warming between 2 and 1.5 Celsius, and it is facing substantial issues with air pollution in its megacities like New Delhi or Mumbai. Since Modi's election in May 2014 we see a substantial push for renewables, both solar and wind. To date India is already number five in the world with regards to installed wind energy which today is about 25 gigawatts, and that is just a start if we look at GWEC's assumption that India's potential for wind power development reaches up to 400 gigawatt and more if the potential of offshore wind and repowering are fully exploited. Now facilitating offshore wind in India, India is a very huge country, it's 3.3 million square kilometres of land. Why offshore wind?

STEVE SAWYER Well first of all I'd say India has just moved up into fourth place having surpassed Spain so it's only behind the United States, China and Germany in the global market stakes. Why offshore? Well of course there is a great deal of undeveloped or unexploited potential onshore in India and we would expect that to continue to develop. Offshore wind is a difficult technology. It's taken a lot longer than anybody expected to mature but we do see it maturing now in Europe and the costs coming down to be actually in the realm of being competitive, not immediately but by the end of this decade. And in that context I think India can benefit greatly because of three reasons basically. One is that the most difficult constraint, or one of the most difficult constraints to development of onshore wind in India is the complicated land tenure system, then there are of course the grid issues which we'll come to in a moment. Secondly, is because of course you have a much stronger resource offshore, and it's close to big load centres on both of the two coasts, I mean that's why the FOWIND project is focused on the coast of Gujarat Tamil Nadu where you have large load centres, and you don’t have some of the transmission issues that you have onshore.

MATHIAS STECK Right, so as we know from the experience in Europe and part of China Steve, offshore wind is a highly complex and very risky area. What would you think are the main challenges for India to be successful in that industry?

STEVE SAWYER I think the main challenges for India are the same as the main challenges that have been faced by China and by Europe. As I get older the notion that you learn from somebody else's mistakes, I'm not entirely a hundred percent sure that you actually do learn from anyone else's mistakes. You have to make them yourself. But at the same time if you've observed and being told about these mistakes and their consequences and other people have found solutions then maybe you can short-cut the time that it takes you to learn from your own mistakes. But I think India, because of cost reasons, will be constrained to be very careful about how it approaches the sector. And the main challenges of course are building up a domestic infrastructure both in terms of ports and in terms of the grids, and in terms of the supply chain which can ensure that the investment that does come in, both domestically and from overseas can be to the maximum benefit to the Indian economy. Not only for the electricity that it brings but in terms of the investment and infrastructure and local industry. So, managing that process in any country is complex, it's more complex in India than anywhere else partly because everything here is more complex than it is anywhere else due to the nature, the size and the scale of the country, but also because of the uneasy division of labour between the central government and the state governments which needs to be sorted out. The other challenge of course is the electricity sector as a whole needs very substantial investment in transmission, in grid infrastructure, and also in terms of the marketisation of the system, the electricity system which has begun but it's got a long way to go before it becomes a viable commercial entity.

MATHIAS STECK If you look at the role of FOWIND in this scenario, how will FOWIND be able to pave the way here and help the industry?

STEVE SAWYER Yes, we're not going to solve all the problems associated with India's electricity sector, but we can help with some of them by pointing out the difficult politically but blindingly obvious from a technical and engineering point of view, issues that need to be overcome in relation to transmission and distribution infrastructure. And also, hopefully take the lessons learned primarily from the European sector and apply them in India in ways that India can maximise its benefit from the investment with a minimum, I'm sure there will be some mistakes and certainly engineering learning going on, but to maximise the benefit from the investment in the industry in this country, as well as developing as much of a local supply chain as possible.

MATHIAS STECK It looks like a really big task ahead. What would you think is the time horizon? When will we see offshore wind in India happening?

STEVE SAWYER Well I think we'll see the first projects by the end of the decade, whether they'll be in the water and spinning by the end of the decade remains to be seen but that they will be conceived, developed and invested in by then. And assuming things go well with a minimum of the muss and fuss that we talked about that during the first half of the next decade, say after 2020 but before 2025 we'll see the industry start to accelerate. That's my hope. That might be a little bit too optimistic but I think that can be done and that's one of the reasons why we've invested in this process, and why we hope to bring it forward so that that can be the case.

MATHIAS STECK You talked a bit earlier about a lot of opportunities I would think for the local industry. The FOWIND project is finally funded by the European Union. What do you think about opportunities for foreign players for example from Europe or China?

STEVE SAWYER Well certainly from the European side most of the manufacturers of purpose built offshore machines, those companies with experience in building the foundations etcetera, I think that's where in the initial stages most of the material for the early projects is going to have to be sourced from. How quickly that translates into investment by those companies or by local companies into local plant and manufacturing, ultimately those decisions will be made to some extent by the market but also by government regulation. So, I would say initially of course there are substantial opportunities for European companies. How long they will last is at least partly a matter of government policy and how quickly local industry can come up and be competitive. For Chinese companies, yes potentially but I would think that in the first instance the opportunities for them are in China and once the offshore sector there has really developed then they can start moving overseas.

MATHIAS STECK Thank you very much Steve for your valuable insights. As a member of the FOWIND Consortium I can say that we are really excited to be a part of this encouraging development which finally contributes to a safer, smarter and greener energy future in India, and has a lot of potential to develop a substantial new industry. It's indeed a space to watch and I wish ourselves, the FOWIND Consortium, GWEC, DNV and our Indian partners, WISE, CSTEP GPCL and NIWE, as well as the potential stakeholders inside and outside India, that the pace with which renewables is developing continuous finally to the benefit of the Indian economy and as well the Indian society. Thank you very much.

STEVE SAWYER Thank you Mathias.

NARRATOR Thank you for listening to this DNV Talks Energy podcast. To hear more podcasts in the series, please visit dnv.com/talksenergy.