Wind-power capacity in India has grown an impressive five-fold in the last 10 years, touching 23,000 megawatt (mw) in March 2015. Growth is being propelled by tariffs-at Rs 4-5.5 per unit currently-inching towards grid parity. CRISIL expects this trend to continue, supported by favourable government policy towards renewable energy.
Pawan Agrawal, chief analytical officer, CRISIL Ratings, said, ''Grid parity, along with the recently restored fiscal benefits, make wind power projects profitable, sustainable, and scalable. As a result, CRISIL expects wind-power capacity to nearly double from current levels-growing at 4,000 mw per annum-in the next five years. That translates into an investment potential of Rs 1 trillion.''
In the last five years, nearly 60% of the capacity added was by private developers. The top ten developers, with a 20 per cent share of capacity, have invested about Rs 12,000 crore as equity. The sector's rising attractiveness has also been accompanied by a change in the lending approach from sponsor support seen earlier to one based on project cash flows.
Given the milieu, CRISIL has fine-tuned its criteria for rating wind-power projects by evaluating risks and mitigants. Wind-power projects face unique risks, such as wind variability-both across years and seasonally within a year-that impacts generation; delays in receivables, or the counterparty payment risk.
Somsekhar Vemuri, senior director, CRISIL Ratings said, ''A sharper focus on risk mitigants is a credit positive for the wind power sector, and can help developers raise funds at lower costs. It can be complemented by innovations such as partially guaranteed debt that will enable the wind sector to tap the capital markets. This, in turn, will reduce funding costs and improve competitiveness.''