Wind energy systems do not generate air or water emissions, or produce hazardous waste. They do not deplete natural resources such as coal, oil, or gas, or cause environmental damages. Wind generates pollution-free electricity that can help reduce environmental strain caused by burning of fossil fuels.

Today, per unit cost of wind power compares quite favorably with conventional sources-based electricity in several parts of the world. The capital cost of per unit of installed capacity based on wind is also quite comparable to the capital cost of thermal based installed capacity.

The three most important factors that determine the cost of wind-generated electricity are,

The participation of European investors in the Indian wind energy sector makes tremendous sense today, both in terms of promising higher returns to the participating European organizations and supporting sustainable development in India. Inflow of European funds in the Indian wind energy market could potentially reduce the overall cost of capital available for this sector ensuring greater off-take of wind energy projects in the country.

The Indian industry can identify better solutions for themselves only when they have a wide range of alternatives to consider, as available in the EU market. This may be in terms of sourcing spares or in terms of seeking technical design solutions. Undeniably, the biggest opportunity for the European manufacturers is to outsource components from India while concentrating on their core businesses. Such information exchange enables easier, quicker and better identification of partners.

Europe is the frontrunner in wind energy, with around 75 per cent of installed wind power capacity. Germany is the world market leader, followed by Spain, United States, India and Denmark. India is the Asian wind giant, followed by China.

Europe is also leading in offshore wind farm developments.

Denmark’s wind industry contributing around 20 per cent of the total national electricity demand is the highest contributor.

The world’s wind resources are huge, and distributed over almost all regions and countries. According to “Renewable Energy Sources for Fuels and Electricity”, the world’s wind resources are estimated to be 53,000 TWh/year.

Wind power capacity has expanded around the world over the past five years at an average cumulative rate of 32 percent, from 10,153 MW in 1998 to 40,301 MW in 2003.

By the beginning of 2004, the capacity of wind turbines installed globally had reached a level of over 40,300 MW.

According to the “Wind Force 12”, by the year 2020, an installed capacity of 1,245 GW will have been achieved, with an annual production capable of matching 12 % of the world’s electricity demand.

The cost per unit (kWh) of wind electricity has reduced dramatically over the years. According to an evaluation of wind turbines installed in Denmark by the RISO National Laboratory, the cost per unit fell from 15.8 cents  (Euro) /kWh to 5.7 cents (Euro) /kWh, a decrease of two thirds. The reasons included improved turbines and better siting.

As the market has grown, wind power has shown a dramatic fall in costs. Analysis by industry magazine Windpower Monthly shows that at a site with an average wind speed of 8.5 metres per second, and a capital cost per installed kilowatt of approximately Euro 800, wind is already competitive with gas, which is one of the cheapest options.

Just 20 years ago wind turbines were of the size of only 25 kW. The largest machines commercially available today are of 3,600 kW, with a rotor diameter of 104 metres. Machines of the range of upto 5,000 kW are currently under development.

Overall, there are two types of policy incentives to promote the deployment of renewable energy-

• The Fixed Price System where the government sets the electricity prices (or premiums) to be paid to the producer and lets the market determine the quantity.
• The Renewable Quota System (Renewable Portfolio Standard in the USA) where the government sets the quantity of the renewable electricity and leaves it to the market for the price to be determine

Different variants of the above two mechanisms have been introduced in different countries.

The most important environmental benefit to be achieved from increased wind power generation is a reduction in the levels of carbon dioxide being emitted into the global atmosphere. Carbon dioxide is the gas largely responsible for exacerbating the green house effect, leading to global climate change.

The participation of European investors in the Indian wind energy sector makes tremendous sense today, both in terms of promising higher returns to the participating European organizations and supporting sustainable development in India. Inflow of European funds in the Indian wind energy market could potentially reduce the overall cost of capital available for this sector ensuring greater off-take of wind energy projects in the country.

The Indian industry can identify better solutions for themselves only when they have a wide range of alternatives to consider, as available in the EU
market. This may be in terms of sourcing spares or in terms of seeking technical design solutions. Undeniably, the biggest opportunity for the European manufacturers is to outsource components from India while concentrating on their core businesses. Such information exchange enables easier, quicker and better identification of partners.