Bharat Light Partners IBM to Boost India Wind Farm Output

November 19, 2013 by  
Filed under Green Energy News

Draper Fisher Jurvetson-backed
Bharat Light Power Pvt. and International Business Machines
Corp. (IBM)
are combining efforts to boost the electricity output of
wind farms in India, seeking to expand capacity fivefold.

Under a 10-year agreement, IBM’s technology will raise the
profitability of Bharat Light projects by better managing wind-farm data, said Balki Iyer, chief development officer of the
renewable developer founded by the former country head of
General Electric Co. (GE), Tejpreet S. Chopra.

Clean-energy utilities such as Bharat Light and Morgan
Stanley-backed Continuum Wind Energy Pte are sparking a shift in
India’s wind industry by focusing on maximizing generation as
they compete against fossil-fuel plants to deliver power. India,
fighting blackouts that restrain its growth, is trying to cut
dependence on imported fossil fuels and double clean energy
capacity to about 59 gigawatts by 2017.

“These projects are usually located in very remote parts
of India and the level of intelligence dispatched from the field
is low,” Iyer said today in a phone interview. The
collaboration with IBM will allow Bharat Light to generate power
at levels “way beyond” what wind farms, often managed by
turbine suppliers in India, currently can do, he said.

Wind farms are already able to supply power at the same
cost or cheaper than new coal-fired plants in some Indian
states. That trend was helped by falling turbine prices, down a
quarter from their 2009 peak amid global oversupply, as well as
newer machines that produce more power at lower wind speeds.

Operational Efficiencies

“There is only so much you can do to improve existing
turbines,” Iyer said. In contrast, raising the operational
efficiency of remote wind farms by just 1 percent can lead to a
“huge” increase in revenue. Continuum Wind Chief Executive
Officer Arvind Bansal said Oct. 29 that generation losses at
Indian wind projects can be reduced from 6 percent to less than
1 percent by managing assets better.

Clean-energy utilities such as Bharat Light, backed by
Menlo Park, California-based venture capital firm Draper Fisher
Jurvetson, which bet early on such companies as Skype Inc., and
Continuum are expanding faster than traditional wind-farm
investors that are exiting the market after the expiration of a
tax break.

Most of India’s 20,000 megawatts of wind capacity was built
claiming tax breaks, leading to small holdings that owners often
allowed to rust and idle once the depreciation benefits were
claimed.

IBM’s technology will also help Bharat Light comply more
easily with a government directive on July 15 that ordered wind
farms to forecast day-ahead power output or face fines, Iyer
said. Goldman Sachs Group Inc.’s ReNew Wind Power Pvt. and Tata
Power Co. (TPWR)
say the rule would wipe out industry profits because
it’s too difficult to meet.

Asset Acquisitions?

India’s fragmented wind industry is ripe for mergers and
acquisitions as indebted companies such as property developer
DLF Ltd. and truck maker Ashok Leyland sell off wind portfolios
built for tax breaks, according to Bloomberg New Energy Finance.
Such assets can be bought for less than half the cost of
building a new wind farm, according to Mumbai-based developer
Ushdev Power Holdings Pvt.

Bharat Light owns about 200 megawatts of operating wind
farms, including 150 megawatts of capacity acquired from DLF in
July. It plans to diversify into solar, biomass and hydropower
to reach 1,000 megawatts in five years through acquisitions and
by building projects, Iyer said.

The developer is in talks with potential overseas investors
to help fund that growth, he said, declining to elaborate.

IBM is combining efforts with Bharat Light in “a sunrise
industry,” Ajoy Menon, a director at IBM in India, said by
phone. “We’re betting on renewables.”

To contact the reporter on this story:
Natalie Obiko Pearson in Mumbai at
npearson7@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

Comments are closed.