Winds of change leave tower manufacturers gasping for business

The situation has apparently arisen as major players have started grabbing a large chunk of the orders due to policy changes effected by the government allegedly benefiting bigger organisations.

With the emergence of such players, medium and small units, which used to manufacture windmill components in Thuvakudi, the industrial hub of Tiruchy, have been lying idle with many facing closures over lack of orders.

Tiruchy had supplied major windmill components across the country until about two years back. “But, the government modified the policy and sought bulk orders in a single go. This resulted in the medium and small units losing orders and facing closure,” an official from one of the manufacturing units here told DT Next.

On a larger scale, Tamil Nadu is fast losing business to Gujarat, Maharashtra and Rajasthan on the windmill front. With installed capacity of 7,854 MW as on May 30, 2016, the State, however, still stands first accounting for 40 per cent of the windmill power generated, according to the Tamil Nadu Energy Development Agency.

The annual installation proposal was 3,472 MW in 2015-16 and it was increased to 5,400 MW in 2017. It peaked in 2018 at 6,000 MW with the involvement of bigger companies which began investing heavily causing smaller players to face heavy losses.

The State is in a position to generate between 4,000 and 5,100 MW from May to September as the wind pattern is strong during these months. The generation could be increased by an additional 2,000 MW if the ageing equipment in windmills is replaced, thereby helping the units in Tiruchy do decent business. 

However, the involvement of bigger players in these activities too had given these smaller units a harrowing time, claim manufacturers of windmill towers. The government has been giving bulk orders ranging between 500 MW and 1,000 MW to a single firm, affecting smaller players. The manufacturers are reluctant to reveal the names of the bigger players fearing the impact on their business.

Meanwhile, the new players seem to prefer northern states compared to Tamil Nadu which has a high potential in the renewable energy sector. “This is due to proximity and some payment issues with Tamil Nadu. Thus, the already existing units have been abandoned as the new players focus on new installation rather than renovation work,” said a manufacturer.

However, the suppliers of windmill components in Tiruchy are not prepared to undertake risks, fearing that the bidding quote would be very high. “Our business is near stagnant. Only 10 per cent of our capacity is utilised,” said a manufacturer in Thuvakudi. 

Earlier, the Thuvakudi industrial area had around 40 units, each employing between 300 and 800 people. But now, only seven are operational and among them, just three have some decent orders, he said. This particular manufacturer had made at least 40 towers a month earlier.

“But, presently, it is very hard to get even one order a month. We employed 800 people until about two years ago. But now only 200 work for us,” he added.