Speaking exclusively to CNBC-TV18 at the WindEnergy Hamburg, Tanti said that repowering in India is finally starting after years of discussion and Suzlon Energy has also won a small order in this segment, with potentially more to follow.
Repowering is replacing old, aged wind turbines with modern, high-efficiency models at existing sites to boost power generation.
However, according to Tanti, its not just replacing old with new that defines repowering. It requires technical innovation, commercial innovation and legal groundwork, as old land agreements, power contracts, grid permissions will all have to be renegotiated.
On the engineering aspect of this segment, Suzlon plans to reuse the existing foundation and tower, which will cut costs and reduce time significantly.
Suzlon Energy’s India Opportunity
Tanti believes that India as a market is beginning to find its stride in the wind energy space, having added 6 GW of capacity last year. This year, installations are pegged at 8 GW.
While this still falls short of the 10-GW-a-year needed for the 100 GW by FY30 goal, Tanti believes it is a step in the right direction and he expects India to add around 30 GW by financial year 2030.
After China, Tanti said that India has the best permitting framework in the world for wind energy projects, although some long standing problems faced by the industry still persist as grid availability and permitting remain the main points of friction between a signed order and a spinning turbine.
Solar’s Glut is Wind’s Opportunity
While the solar industry is dealing with concerns of excess capacity and fluctuating bid tariffs, Tanti sees the real change in tender design.
Most of the tenders that Suzlon works upon are either pure wind or FDRE (Firm and Dispatchable Renewable Energy). The Suzlon Group Vice Chairman now sees new bids to have a greater wind + solar mix than just standalone wind or solar.
Even a wind + solar combination is an important development for the wind energy sector. Solar output drops off at dusk, just as evening demand peaks, and wind fills that gap. In round-the-clock and FDRE tenders, wind is part of the core design rather than just another extra option.
Suzlon is also foraying into the Battery Energy Storage System (BESS), as demand is taking off and growing rapidly.
Offshore Can Wait
Tanti is clear that India is not yet ready to follow Europe with regards to offshore wind energy projects. Wind conditions off India’s coast make offshore projects less viable, and building offshore projects costs two to three times more than an onshore one. For now, Tanti expects India’s wind story to play out on land.
The Chinese Competition Challenge
Even as Chinese OEMs have been bidding aggressively in India, Suzlon’s Tanti is not very worried. He believes the Indian market is open to competition and that healthy rivalry keeps companies sharp and brings prices down for customers.
Suzlon is moving toward a DevCo-led model, where it develops project sites itself and offers customers a ready-to-build project instead of just turbines. Tanti expects about 60% of future orders to come through this route. He sees the order book settling at about 50% DevCo, with the rest coming from EPC and increasingly from FDRE projects.
Despite the industry’s talk about bigger machines, Tanti said DevCo and EPC customers still want Suzlon’s 3 MW turbine. The shift from 3 MW to 5 MW-class turbines won’t happen overnight, he said, but it will gather pace over the next few years.
Longer Duration Contracts
Tanti also pointed to a change in how customers now engage with Suzlon. Sales discussions that used to cover 24 to 36 months now extend to five-year horizons. Customers are planning further ahead and want a partner who can commit to that timeline. He added that Suzlon’s newer businesses are gaining good traction, with DevCo leading the way.
No Acquisition Plans
Suzlon’s rival Inox Group has been acquiring O&M-heavy companies but Suzlon does not intend to go on the inorganic growth path. On the margins front, while Tanti expects quarter-to-quarter fluctuations, the full-year band is likely to remain between 17% to 18%
India’s wind farms are due for an upgrade and Tanti believes that Suzlon is well positioned to capture that opportunity as installations pick-up pace.
Shares of Suzlon Energy ended 4.2% lower on Thursday at ₹40.61. The stock is down 23% so far this year.