New Delhi: The flagship of Hyderabad-based Lanco Group, Lanco Infratech Ltd has shelved its plan to set up wind turbine manufacturing facilities due to the current economic slowdown, said a person close to the matter who didn’t want to be identified.
“The company has abandoned its plans even as it had tied up technology and vendors for the venture. It has re-deployed the around 40 company executives earmarked for the project,” he said.
Gone with the wind? Hyderabad-based Lanco Group chairman Lagadapati Madhusudhan Rao. Bharat Sai / Mint
Questions emailed to the Lanco spokesperson on Friday remained unanswered until Sunday.
According to the information available on the company’s website, Lanco had undertaken wind-turbine manufacturing and project development activities in India, Europe and the Americas and had plans to launch its 2MW wind turbine in April 2009.
A significant number of energy sector projects are being abandoned due to the global financial meltdown and a fall in demand for such projects.
The Indian wind turbine market has players such as Suzlon Energy Ltd, Danish manufacturer Vestas Wind Systems A/S, US company GE Energy, German manufacturer Enercon GmbH and Spain’s Gamesa SA. Had Lanco gone ahead with this venture, it would have been the second Indian company to set up wind turbine manufacturing facility in the country after Suzlon.
Lanco’s wind turbine manufacturing facility was to have an installed capacity of 500 units of 2MW turbines a year with an investment of Rs500 crore at a facility close to Mangalore in Karnataka, company chairman Lagadapati Madhusudhan Rao had earlier told Mint.
Lanco Infratech has an installed electricity generation capacity of 524MW and is involved in projects that would have installed capacity to produce another 7,880MW. The company also has a wind power generation capacity of 13MW at two separate locations in Karnataka and Tamil Nadu. Lanco Infratech registered a net profit of Rs484.5 crore in 2007-08 on revenues of Rs3,241.2 crore.
Of India’s total installed capacity of 147,000MW, wind-based power accounts for only 8,696MW, and most projects have a plant load factor, or efficiency, of only 10-15%. Some power sector analysts say the low efficiency is because the developers are interested in claiming depreciation benefits, not generating power. India, however, has a wind energy potential of 45,000MW and ministry of new and renewable energy hopes to increase wind power capacity to around 18,000MW by 2012.
A Delhi-based power sector analyst, who didn’t want to be identified due to commercial considerations, said: “The wind power generation industry is going through a slowdown worldwide. Indian companies are finding it increasingly difficult to raise resources amid such a demand slowdown.”