Economics of wind energy

13 November 2001

On the other hand, solar energy requires an investment of Rs 12-13 crore. Moreover, the technology for solar power has not yet matured.

In order to make thermal and hydel power projects economically viable, these must have capacity to produce 500 to 1000 MW of electricity. For this, massive investments in the range of crores of rupees are required to be made.

Wind energy generation does not suffer from any such constraints. "You can begin with windmills that generate as little as 0.25 or 0.35 MW or as large as 1.5 MW, depending on the investment you want to make, says Pradeep Kumar of Bajaj Electricals.

Wind energy generation also requires minimal recurring costs. Wind being free, there is no fuel costs. Recurring costs are limited to regular maintenance like greasing, oiling, preventive maintenance of electronic circuitry etc.

For high-tension energy users, the assured availability of power at a fixed cost much lower than that provided by electricity boards is a major incentive to invest in wind energy projects. This is possible through wheeling and banking system in which electricity generated by wind energy is fed into the power grid and credited to the investors account.

The investor can draw the same amount of energy at his choice of location. Manufacturing companies, in particular, stand to gain the most by the price differential. While in Maharashtra, where power costs Rs 4.20 a unit, the state buys electricity generated from wind farms at the rate of Rs 2.25 per unit in the base year (1994-95. Today's rate is 3.04), with a 5 per cent escalation every year. It charges 2 per cent towards transmission and distribution cost.