China & India are now the global leaders in wind power. How can Nepal benefit?

It’s no more a news though! China and India are now the world leaders in Wind power. While our magician politicians spent years juggling props (like -declaring energy crisis, announcing hollow energy packages) in the air befooling people to grab their attention without actually working on any substantial support mechanism for renewable energy development, our neighbors were erecting wind towers and were blowing air to these wind turbines.

Here’s a question- Is wind power commercially feasible in Nepal?

On conditions, yes! it definitely is. Solar and Wind Energy Resource Assessment(SWERA), a study conducted in 2008 by AEPC, Nepal estimates  the commercial wind potential in a country to be 3000MW.  But, translating that potential into reality is a major challenge here. For a country largely salivating over harvesting water resources, other renewable energy options were never sought after seriously on their commercial viability. More yet, wind energy never received any policy attention and remained largely neglected. Nepal’s past studies and demonstrations were merely the exercises to satisfy our wind curiosity without having much in-depth studies and wind friendly policies in places. So are the past demonstrations and studies the wasted ones? Of course not!  Every technology needs to have that learning curve. It’s just that we followed just too long a curve without actually focusing on the needed tasks. We would have rather invested out effort in researches and establishing numbers of wind gauging stations so that today we had access to historical wind velocity data that we can be largely benefited from. So having limited researches done, limited technological capabilities and reliance on importing foreign brewed wind turbines and equipment and absence of any compliance on wind energy targets and policy backing  still make the wind energy a costlier project  compared to developing other conventional energy technologies in Nepal.

But there’s another question, if the technology is still that costly compared to other energy technologies, how come India and China are spending billions of dollars in  installing wind turbines?

Looking at the various studies and assessments done by Global Wind Energy Council(GWEC), as the emerging economies, for China and India it’s clearly the issue of energy security from their perspectives. Their demand of energy is rapidly increasing and also increasing is the global energy demand which has caused the price of conventional petroleum products to rise sharply. Supplies and cost of petroleum products are equally unpredictable. We recently saw how the Middle East conflicts and political instability impacted the supplies of petroleum products around the world. IEA estimates that energy need by 2030 would require additional 4500GW of new energy capacity to meet the growing global energy demand. In this context, major economies around the world are spending billions of dollars in Renewable Energy Technologies. It’s not only because these energy option have become cost effective but are becoming more attractive from the  energy security perspectives. Also, the global efforts towards the low carbon pathways and the long term prosperity and independence offered by these green technologies have heavily influenced the growth of wind energy.

China and India wanted to have this long term energy prosperity and not depend merely on Imports. Cost of initial wind installation was of course higher but both the countries didn’t let that cost to factor much. They started incentivizing private sectors to invest in wind technologies and initiated policies to support wind power development. As they continue deploying more units and initiated policies to support, wind turbines started getting its scale of economy. Today the costs of wind projects are almost rapidly falling down to match with the cost of conventional energy projects. State willing that is what policies can do at best. Data source here and here.

Global Renewable Energy Investment Trend & Wind Energy Growth

What policies facilitated China and India?

According to the Renewables 2012, Global Status Report (GSR), India now has the fifth largest installed wind power capacity in the world, more than three times the installed capacity of Denmark, which still has the largest global market share in manufacturing wind turbines. There are some noticeable stable energy policies and support mechanism, including India’s Electricity Act of 2003 requiring state energy regulatory commissions to encourage electricity distributors to procure power from renewable energy sources. This led the Indian states to develop aggressive renewable energy targets and policy support mechanisms  causing a new boom in the sector of wind energy. According to GWEC, the renewable energy policy shift in India heavily supported the development of domestic wind manufacturing capability through Suzlon, an Indian owned company that holds over 50% of the Indian wind turbine market share and has also captured a large share of the global market.

The global wind power capacity has increased by 20% in 2011 to reach approximately 238GW by year end. . As for China, It’s dominance in the wind energy can be understood from the fact that China alone accounts for the almost 44% of the global market in 2011 followed by United States and India.

China in its 11th Five‐Year Plan (2006) has scaled up renewable energy targets to meet growing electricity demand and achieve energy security and pollution reduction goals. The plan included national targets for wind: 5 GW installed in 2010; and 30 GW installed in 2020. These targets are implemented by the provinces and by electricity producers through mandated shares of renewable energy. The policy combines market instruments (e.g. bidding on concessions and mandated market share) with government intervention (e.g.price controls and technology targets) and also the support for state‐owned companies to invest in wind R&D was crucial for china to become a world leader today. At the year end in 2011, China had nearly 62.4 GW of cumulative wind capacity, more than one-quarter of the world’s total and more than 24 times China’s wind capacity just five years earlier. A country willing, this is what it can do at its best. [some texts adapted from GWEC ]

What the Wind power growth in China and India means to Nepal?

Growth in India and China would mean a genuine opportunity to Nepal. Given its geological and political proximity, Nepal can benefit a lot.  Looking at the investment trend and yet their wind potential remaining high, they seem to be continuing investing in wind power and will continue enabling the support mechanism facilitating the wind power growth.  These massive productions in recent year have caused the price of wind energy to drop heavily.  This is exactly what the rapid growth of renewable energy requires, reaching the scale of economy. In India and China, now the cost of developing wind projects are falling down almost to match with the cost of developing conventional energy projects. Given its close proximity to both the growing economies, Nepal can be benefit a lot in having right policies and support mechanism like incentivizing investors and developers with some innovative interest rebates or tax subsidies in wind machineries or equipments imports. I am more inclined to think, if there were any time to think or start working on wind power, this is the time.  It’s all about learning to whistle as the wind blows.

[P.S the blog post was actually conceived after exchanges of few tweet thoughts with friend Semanta Dahal on this ekantipur thursday post. Thanks Semanta)