Pioneer Wincon: Exercising Prudence For Wind Energy

S Annamalai,FounderThe government's ambitious initiatives to utilize renewable resources have gained attention of both foreign and domestic investors to ensure energy security and a sustainable development. Wind and solar technology has matured over the years to be cost effective and are now poised to play a dominant role in the nation's energy mix.

Pioneer Wincon, a wing of Pioneer Asia Group, has evolved in the market of wind energy with business spread across manufacturing, design, trade, and maintenance spheres of wind turbines. The company head-quartered in Chennai commenced in the field of clean energy source back in 1989 when the Pioneer Group met with the requirement of power for its other industry verticals.

How IT All Started
The founder director of Pioneer Wincon, S. Annamalai, a pioneer in wind energy industry, put forth a viable option of commercial / private investment in wind energy. He was the first individual to connect wind turbine generator owned by a private entity to the Indian grid in 1989, thereby paving the way for commercialization of wind. Prior to that wind turbines investments were made by government for non-commercial purposes.

Following this, the Pioneer Asia group spearheaded by S. Annamalai, invested in several more wind turbine projects. The investments enabled them to learn more about the turbine technology and divulged the issues faced by industry in wind farm development. The group realized the economic potential of wind and its positive impact on the environment, and thus moved the firm to lay the foundation to Pioneer Wincon in 1996 as a joint venture with Wincon West Wind A/S of Denmark. Ever since, Pioneer Wincon has been focused to design and manufacture reliable and efficient wind turbines, and develop & deliver turnkey high yield wind projects.

Along with the manufacture and trade of wind turbines, the company also orchestrates a set of functions from procuring land, EPC, commissioning the wind turbine to handing it to the customer. PW has undertaken more that 1200 renewable energy projects with a success rate of over 98 percent."We offer attractive wind projects that avail low level cost of energy for customers. Customers with money are looking for viable investments and our projects attractive ROI", says M. Pradeep Sankar, Executive Director, Pioneer Wincon.

Facilitating Open Access Renewable Energy Projects
In the present scenario, the wind energy market is subjected to a lot of turmoil in the feed-in tariff, reverse auction, and competitive bidding along with higher import tariffs. With the advent of competitive bidding of wind tariffs in February 2017, there was a significant downward revision of Feed-in Tariffs (FIT) irrespective of the policy control period. This led to the plummeting of wind installations from the 5403MW high in FY17 to 1604MW in FY18 and 1547MW in FY19. However, the disruption will pave way to recovery and growth in the market driven by the need for renewable energy and innovation.

The shift to competitive bidding was further exacerbated by a spate of measures taken by state utilities as part of UDAY (Ujwal DISCOM Assurance Yojana) to reduce costs which resulted in adverse open access policies in many wind states; for instance withdrawal of banking in Tamil Nadu.

Despite the turbulent policy conditions, open access projects are very viable due to attractive tariffs and there are several high return investment opportunities for investors.
These projects are further bolstered by benefits such as Accelerated Depreciation (AD) and in some states like Gujarat by capital and interest subsidies.

Pioneer Wincon is built around solving the challenges for two segments of customers: captive investors and power producers. A captive consumer is a business with energy consumption in the range of 10-45L units and which is eligible to source open access power. This segment benefits from wheeling power from a wind power plant to its plant and offsetting the units wheeled from their energy bill. The wheeled power would cost a consumer a fraction of what it would cost them if they brought it from a utility or a third party. The second segment, the power producers, comprises customers looking for long term investments that surpass their high hurdle rate (threshold rate of return) and have a investment budget of 4-10 Crores. These customers benefit by selling the power they generate to an off-taker at a margin. The off-taker may be a utility or other consumer eligible to purchase power through open access. Both segments may be seeking to reduce their income tax burden and reap other benefits.

Pioneer Wincon is built around solving the challenges for two segments of customers: captive investors and power producers

With the FIT (Tariffs) plummeting investments based on sale of energy to the utility are in many cases not viable. However, open-access wind projects inherently have a high rate of return. As free markets would have it, these investments pose their risks, such as project failure, resource variability, plant failure, project schedule slippage, policy changes, loss in tax benefits, etc. The value PW brings to the table is the ability to mitigate those risks significantly and give the investor the best shot possible at materializing their expected returns. "We do this by manufacturing a turbine designed to pose the lowest technical risk, place it in a high wind site and ensure that it yields energy as per specifications without failure for the next 20-25 years", explained Pradeep.

A Reputation For Performance And Reliability
In the foundational years, PW faced cut throat competition in the relatively mature wind market. Nevertheless, the firm secured its initial orders by leveraging groups' reputation and relationships. PW continued to execute projects successfully and quickly became a renowned name in the market for developing top notch projects and on-time execution of projects. The company adopted aggressive cost reduction methods to deal with the price wars by localizing the manufacturing of various components and continued to improve the product's performance by making various technological upgrades such as introducing a dual speed generator, increasing the rotor diameter hub heights, and improving the reliability of components such as gearboxes . The P250 became an icon of sturdiness and performance in its segment. This led to a period of rapid growth in P250 turbine sales in the 2000s and P250 went on to be successfully installed pan-India and in exports markets.

As an OEM, Pioneer Wincon's flagship product is the P750, a 750KW stall regulated turbine with 49m rotor diameter and hub heights of 60m and 75m. PW's products are based on proven Danish technology and have a reputation for performance and reliability. Besides, the company backs the products with end to end after sales service.

PW's flagship service is the development of turnkey wind projects with high return and low risk backed by extensive due diligence on energy yield, policy and project risks. PW's projects are reinforced by high quality EPC, superior site selection, on time project execution and superior after sales support. More so, Pioneer Wincon boasts of dedicated in-house teams for resource & energy yield assessment, EPC (Engineering, Procurement and Construction), land & legal, government liaisoning and after-sales support.

More than anything, the factor that sets PW apart from the competition, is its 20 plus years' track record of ethical business practices and the respectively high success rates in delivering projects while dealing with risks effectively.

Paving The Future For Seamless Wind Energy Power
The company has built a reputation in the industry by providing reliable turbines. To achieve new heights in the demand, the company outline plans to increase the size of the turbine for its capacity and rotor diameter. Pioneer Wincon is all set to deploy its new pitch controlled variant of its 750KW turbine called P57 and ship the first serial supplies in the second half of FY 21. FY21 is to further be the year of larger scale grid connected solar open access projects. The industry is gearing up to execute Wind-Solar hybrid projects which further increase the plant CUF and results in lower LCOE. As evident now, Pioneer Wincon has developed the in-house capability to execute Wind-Solar hybrid projects and is ready to execute hybrid projects as soon as state policy is implemented for such projects.