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Saturday, 09 September 2017 12:00

Tariff drop buffets wind gear-makers’ staff

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09/09/2017

Facing policy-change headwinds, wind energy equipment manufacturers are looking at ways to cut staff costs, including benching.

According to Amar Variawa, Director of Marketing, Vestas India and SE Asia, “There is a short-term uncertainty in India because of the shift from feed-in-tariff regime to the bidding route.”

After the government started auctioning wind power projects based on lowest tariffs, wind energy bids (without any subsidy) dropped to ₹3.42 a unit in August.

This is about half the rates fixed under the feed-in-tariff regime.

The government has also done away with the Generation-Based Incentive and Accelerated Depreciation that used to aid wind projects.

The going is not easy. For example, wind turbine manufacturer Gamesa India is said to have put a freeze on new recruits.

A company official said, “There has been a slump in product offtake. We have put employees on a four-day-a-week schedule from the six-day schedule till things improve.” In an investor presentation for the first quarter of the current financial year, Siemens Gamesa, the parent company, wrote that revenues fell 7 per cent year-on-year largely on the back of the Indian market’s temporary downturn.

The company’s revenues, excluding India, were up 1.6 per cent compared to the revenues over the same period of the last financial year.

Regen PowerTech has laid off around 200 employees, according to Managing Director at Regen PowerTech, Madhusudan Khemka.

Regen Powertech has a capacity of 750 MW per annum at its Andhra Pradesh facility and 300 MW per annum at its Rajasthan plant.

According to multiple wind energy professionals, capacity addition during 2016-17 exceeded 5 GW. But the capacity addition so far in 2017-18 has been 282 MW.

This has led to a glut of wind energy equipment in the country.

“It will be an achievement if we see even 1 GW of capacity addition in the current financial year,” said a wind energy sector watcher.

Also facing tough times are Inox Wind and Suzlon, which are expected to shed manpower.

In response to a query on the possibility of cutting manpower costs during an investor conference call, Suzlon’s Chief Executive Officer, JP Chalasani, had said: “The ceiling would be the manpower cost what we incurred last year, (and this year) it will be lower than that.”

The players, however, are optimistic. Varaiwa, feels that some kind of course correction will happen as wind energy tariffs are moving towards parity with conventional power.

Voicing a similar sentiment, Khemka said: “the industry is currently in a cost-saving phase and once the market picks up by next year, all benched will be working again.”

Additional Info

  • News Section: Wind Energy News
  • Month: September
  • Year: 2017

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