I’ve gone through this thread and one on Sanghvi Movers, as well as some recent news reports on possible turnaround of Wind Energy sector.
The optimism stems from following reasons
(1) Improved regulatory regime (auction route, lower project risk etc.)
(2) Better incremental returns even at such low rates of 2.45-2.65Rs/unit (lower interest costs, better machines with higher PF etc.)
(3) Possible improvement is relative competitiveness of wind vs. solar (possibility of ADD on imported solar panels/equipment)
Its all interesting, but I still have some doubts on whether Suzlon is better placed, and would like to listen to counter views from other boarders here:
- Whether next few years would be financially very much better than last few years for IPP players- lower interest rates, better machines and low energy auction rates now Vs. moderately higher interest rates, moderately inferior machines with lower PLF than current ones and higher energy rates (~Rs5/units) under IPP. While costs were higher, so was revenue and hence whether current situation is so much different than earlier one, financially speaking?
- The next question is whether (slightly) better situation for IPP translate into better days for WTG players? I have my doubts due to various reasons, chief among them are: higher competition among WTG suppliers, WTG supply/demand scenario for next couple of years and vulnerability of financially stressed WTG players to arrange for higher working capital / project funds etc
- The silver lining though, can be players like Sanghvi movers, as they may be able to improve asset utilization, and may be able to charge little premium in case of demand outstripping supply