India's Suzlon Sets Local Wind Turbine Projects Viable in Minnesota and Tirupati

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). What do the holy Tirumala hills in Tirupati, India have in common with southwestern Minnesota, apart that is, from good god-fearing people? And the answer is, of course - Suzlon Indian wind turbines.

In October 2002, Suzlon Energy (Pune, Gujarat State, India) Asia's largest manufacturer of wind turbines, exported two 1.25 MW turbines through Mumbai to Houston. The two 65 meter, 60 ton towers with 110 foot blades were shipped on one of the world's largest freight vessels.

The two turbines have been operating in Minnesota since February and another four should be operating by the end of August. The target of community groups, working with developer DanMar & Associates (Woodstock, Minnesota) is to have 24 x 950 kW turbines online before the end of the year. This project is the first to use Suzlon (Suzlon Wind USA, San Diego, California) turbines in the U.S. The American Wind Energy Association (AWEA) reports that all mechanical installations are scheduled to be completed by mid-September. The turbines are expected to produce 3.5 to 4 million kWh per annum. Power from 18 of the turbines will be bought by Xcel and Great River Power will purchase the power from the other six turbines.

The owner groups are limited liability corporations, organized like a farmers cooperative but still able to receive the federal production tax credit. The projects also receive a state production incentive of 1.5 cents/kWh for the first 10 years of operation for qualifying projects under 2MW. For the similar Min Win I and II projects, which were completed in 2002, 66 farmers raised 30 percent of the $3.6 million cost of the four turbines in the project. The remaining 70 percent was raised through local banks. Tom Arends, president of MinWind II, estimated that with the credits, the farmers could expect a 17 percent annual return on investment.

In the new project, the owner groups are expecting to be able to completely pay off the debt in ten years, at which time they will own the turbines and all the profit from the electricity sales.

In India, the Tirumali Tirupati Devasthanam (TTD) will own a 6 x 1 MW project, for which the objective is to supply power to the central grid that is currently meeting the needs of the increasing numbers of pilgrims who visit the holy temple town. Suzlon will fund and operate the entire project and TTD will pay a nominal rate per unit towards the costs of energy production. The entire site selection at Tirumala was handled by the Centre for Energy Technology (CET) a renewable energy focused group under the auspices of the Osmania University Engineering College. The investment for setting up each of the one MW turbines in India is around $750,000.

Suzlon and its subsidiaries and affiliated subcontractors have installed over 1,220 wind turbines worldwide and all their turbines are certificated by Germanischer Lloyd and have ISPO: 9001 certification. With a presence outside India, in Europe and North America, the company is now developing business opportunities in China, Australia and New Zealand. To a certain extent, lower production costs in India have helped to offset the high logistics costs involved in exporting equipment with finance coming from developed countries. The expanding Indian wind energy industry is looking for export stimuli from government of the type which was given to boost the Indian information technology sector.

In devising ways to make localized and community windpower projects viable and commercially sustainable the Minnesotans and the TTD could exchange points on the benefits of bottom up operation and top down financing of projects.