India - Lanco plans wind turbine facility in Mangalore

Infrastructure company Lanco Infratech Ltd is planning to set up one of the country's largest wind turbines manufacturing facilities, to take advantage of shortage of wind turbines in the global and domestic markets, according to chairman Lagadapati Madhusudhan Rao.

Lanco proposes to set up wind turbines facility close to Mangalore in Karnataka.

"We have tied up with a German engineering company for wind turbine technology. Currently prototyping of 2MW wind turbine is going on," said Rao, who declined to name the German firm.

Lanco plans to set up a wind turbine manufacturing facility with an installed capacity of 500 units of 2MW turbine each a year at an investment of close to Rs500 crore, said Rao.

Work on the wind turbine manufacturing facility has been initiated and Lanco expects commercial launch of turbines sometime by September next year, added Rao.

This makes Lanco the second Indian company to set up wind turbine manufacturing facility after Suzlon Energy Ltd and sixth player in the Indian wind turbine market after Suzlon, Danish manufacturer Vestas Wind SystemsA/S, US company GE Energy, German manufacturer Enercon GmbH and Spain's Gamesa SA.

Lanco's parent Lanco Group has interests in power, construction and real estate, and annual revenues of Rs1,647 in 2006-07.
Suzlon, which is the fifth largest wind turbine manufacturer in the world with 2,700MW capacity, has captured close to 8% of global wind turbine sales and currently holds around 50% of market share in India.

According to Rao, the domestic wind energy market currently suffers from shortage of wind turbine supplies. In the five-year period to 2012, the Indian government is targeting additional wind power capacity of 10,500MW. While the government is estimating a wind energy potential of around 45,000MW, the non-governmental sources put it at 65,000MW to 100,000MW.

Rao said India, with around 8,000MW of installed capacity in wind energy, now stands fourth in the world after Germany, the US and Spain. "While our country is adding around 1,800MW of wind energy this year, there are not enough supplies."
Stating that the supply situation in the global markets was also similar, he said the company would actively look at the exports market.

The Global Wind Energy Council has estimated the global market for wind generation equipment at $36billion per year.

Suzlon, which sold 545MW of turbines during third quarter ended December 2007, has in the past indicated that it would focus on Europe and China.

It had orders worth $4.3 billion (3,358MW) as on January 25, majority from overseas buyers at $3.7 billion (2,916MW) and $600 million (441MW) from the domestic market.

"One of the important factors of the wind power business is the transportation of oversized cargo for blades and towers and our facility would be ideally located," he said.

India's installed capacity of wind power stood at 7,660 MW as of September 2007, mainly spread across Tamil Nadu (3457.5MW), in Maharashtra (1484.9MW) and Karnataka (849.4MW). In Rajasthan it was 469.9MW), Gujarat (667.1MW), Andhra Pradesh (121.8MW), Madhya Pradesh (57.8MW), Kerala (2MW), West Bengal (1.6MW) and other Indian states (1.6MW).
Shankar K., vice-president, research, with the Mumbai-based equity research firm Edelweiss Securities Ltd, said there is a growing trend of companies setting up wind energy units as wind power is eligible for subsidies, tax sops and carbon credits.
After incorporating these benefits, the tariffs and profits are quite attractive, which is the reason why many companies are setting up wind capacity, he said.

"Lanco, which has two small wind-power plants in operation and has been seeking to expand this business, also wants to cash in on this opportunity and since getting equipment could be difficult, they are contemplating an assembly unit to expedite setting up of their wind mills," said Shankar.