Industry insiders claimed that the company was not taking on new orders because it felt India is not as profitable a market as some others. Many wind turbine manufacturers – domestic and global – believe that the tariffs reached in Indian wind auctions are too aggressive and the margins too low.
Jadhav maintained that the business environment in the wind sector was improving. “The whole industry had not priced in the cost very well, it had not accounted for delays etc,” he said. “We were recalibrating but now we are back in a more supportive ecosystem where customers and policy makers understand what these costs are.”
Vestas has installed 1GW of turbines in the last two years. “We had a lot of learnings from it,” Jadhav said.
“For example, earlier, wind projects were supposed to be built within 18 months from the Letter of Award (issuance). Now it’s changed to 24 months. Lots of such small things have happened which now make our participation more attractive,” he said.
The company declined to comment on how many projects it has in the pipeline.
MNRE’s decision to issue wind-solar hybrid tenders is a good one, he said. The ministry of new and renewable energy has gradually been moving away from issuing tenders for plain vanilla wind and solar projects. It has decided to focus only on hybrid projects. “Because of the hybrid profile of projects, other states will start making much more sense. Most of the projects that will come up now will be spread out and not in the two states of Gujarat and Tamil Nadu,” he said.
Gujarat, one of the best wind producing states in the country, has been reluctant to lease land to winners of auctions conducted by central agencies.
Land acquisition for projects has indeed been a huge problem for both developers and turbine manufacturers. In some cases land acquisition is done by the developer and in others the responsibility is taken on by the manufacturer.
“We’ve acquired land for only 30-40 percent of projects we’ve done in the recent past. The rest were done by our customers. We are not averse to doing land. But we look at more mature projects and we like those projects which can be completed on time, which meet hurdle rates for investors and fulfill their financial commitments,” he said.
Thomas Scarinci, Senior Vice President, Product Management said that the company might try out a number of models for execution of projects. “As we look around the world, the maturity and the reality of each of those markets is different. In some markets we act completely as a developer in some markets we are just component suppliers,” he said.