The New York Times  [Printer-friendly version]
September 28, 2006


[Rachel's introduction: "Wind power may still have an image as
something of a plaything of environmentalists more concerned with
clean energy than saving money. But it is quickly emerging as a
serious alternative not just in affluent areas of the world but in
fast-growing countries like India and China that are avidly seeking
new energy sources."]

By Keith Bradsher

KHORI, India -- Dilip Pantosh Patil uses an ox-drawn wooden plow to
till the same land as his father, grandfather and great-grandfather.
But now he has a new neighbor: a shiny white wind turbine taller than
a 20-story building, generating electricity at the edge of his bean

Wind power may still have an image as something of a plaything of
environmentalists more concerned with clean energy than saving money.
But it is quickly emerging as a serious alternative not just in
affluent areas of the world but in fast-growing countries like India
and China that are avidly seeking new energy sources. And leading the
charge here in west-central India and elsewhere is an unlikely
champion, Suzlon Energy, a homegrown Indian company.

Suzlon already dominates the Indian market and is now expanding
rapidly abroad, having erected factories in locations as far away as
Pipestone, Minn., and Tianjin, China. Four-fifths of the orders in
Suzlon's packed book now come from outside India.

Not even on the list of the world's top 10 wind-turbine manufacturers
as recently as 2002, Suzlon passed Siemens of Germany last year to
become the fifth-largest producer by installed megawatts of capacity.
It still trails the market leader, Vestas Wind Systems of Denmark, as
well as General Electric, Enercon of Germany and Gamesa Tecnologica of

Suzlon's past shows how a company can prosper by tackling the special
needs of a developing country. Its present suggests a way of serving
expanding energy needs without relying quite so much on coal, the
fastest-growth fossil fuel now but also the most polluting.

And Suzlon's future is likely to be a case study of how a manufacturer
copes with China, both in capturing sales there and in confronting
competition from Chinese companies.

Suzlon is an outgrowth in many ways of India's dysfunctional power-
distribution system. Electricity boards owned by state governments
charge industrial users more than twice as much for each kilowatt-hour
as such customers pay in the United States -- and they still suffer
blackouts almost every day, especially in northern India.

Subject to political pressures, the boards are often slow to collect
payments from residential consumers and well-connected businesses,
especially before elections. As a result, they often lack the money to
invest in new equipment.

To stay open and prevent crucial industrial or computer processes from
stopping, a wide range of businesses -- including auto parts factories
and outsourcing giants -- rely on still more costly diesel generators.

With natural gas prices climbing as well, wind turbines have become
attractive to Indian business. The Essar Group of Mumbai, a big
industrial conglomerate active in shipping, steel and construction, is
now working on plans for a wind farm near Chennai, formerly Madras,
after concluding that regulatory changes in India have made it
financially attractive.

"The mechanisms didn't used to be there; now they are," said Jose
Numpeli, vice president for operations at Essar Power. The electricity
boards "know how to cost it, they know how to pay for it."

Roughly 70 percent of the demand for wind turbines in India comes from
industrial users seeking alternatives to relying on the grid, said
Tulsi R. Tanti, Suzlon's managing director. The rest of the purchases
are made by a small group of wealthy families in India, for whom the
tax breaks for wind turbines are attractive.

Wind will remain competitive as long as the price of crude oil remains
above $40 a barrel, Mr. Tanti estimated. To remain cost-effective
below $40 a barrel, wind energy may require subsidies, or possibly
carbon-based taxes on oil and other fossil fuels.

Mr. Tanti and his three younger brothers were running a textile
business in Gujarat, in northwestern India, when they purchased a
German wind turbine -- only to find that they could not keep it
running. So they decided to build and maintain turbines themselves,
starting Suzlon in 1995 and later leaving the textile business.

To minimize land costs, wind farms are typically in rural areas,
chosen for the strength of the wind there as well as low prices for
land. But that can mean culture shock.

"There were no big changes until the turbines came," Mr. Patil said,
pausing from plowing here with his father in this remote, hilly,
tribal area 200 miles northeast of Mumbai, where oxen remain at the
center of farm life and motorized vehicles are uncommon.

Doing business in rural areas of the developing world carries special
challenges. The new Suzlon Energy wind farm in Khori is a subject of
national pride. More than 300 giant wind turbines, with 110-foot
blades, snatch electricity from the air. But it has also struggled
with the sporadic lawlessness that bedevils India.

S. Mohammed Farook, the installation's manager, was far from happy one
recent afternoon. At least 63 new turbines, worth $1.3 million apiece
and each capable of lighting several thousand homes when the wind
blows, could not be put into service because thieves had stolen their
copper power cables and aluminum service ladders for sale as scrap.

The copper or aluminum fetches as little as $1 from black-market scrap
dealers. But each repair costs thousands of dollars in parts and staff
time, in a country that is desperately short of electricity and

"I am crying inside," Mr. Farook said.

Despite such problems, Suzlon has expanded rapidly as global demand
for wind energy has taken off. Its sales and earnings tripled in the
quarter ended June 30, as the company earned the equivalent of $41.6
million on sales of $202.4 million.

The demand for wind turbines has particularly accelerated in India,
where installations rose nearly 48 percent last year, and in China,
where they rose 65 percent, although from a lower base. Wind farms are
starting to dot the coastline of east-central China and the southern
tip of India, as well as scattered mesas and hills across central
India and even Inner Mongolia.

Coal is the main alternative in the two countries, and is causing acid
rain and respiratory ailments while contributing to global warming.
China accounted for 79 percent of the world's growth in coal
consumption last year and India used 7 percent more, according to
statistics from BP.

Worried by its reliance on coal, China has imposed a requirement that
power companies generate a fifth of their electricity from renewable
sources by 2020. This target calls for expanding wind power almost as
much as nuclear energy over the next 15 years. India already leads
China in wind power and is quickly building more wind turbines.

Chinese and Indian officials are optimistic about relying much more
heavily on wind.

"I believe we may break through these targets -- if not, we should at
least have no problem reaching them," said Zhang Yuan, vice general
manager of the China Longyuan Electric Power Group, the renewable-
energy arm of one of China's five state-owned electric utilities,
China Guodian.

Kamal Nath, India's minister of commerce and industry, was even more
enthusiastic. "India is ideally suited for wind energy," he said. "The
cost of it works well and we have the manufacturing capability."

International experts are more skeptical that wind will displace coal
to a considerable extent, saying that while electricity production
from wind is likely to increase rapidly, the sheer scale of energy
demands suggests that coal burning will expand even more.

Suzlon still sees plenty of opportunity in China and has decided to
build some of its latest designs in China for the market there,
despite the risk of having them copied by Chinese manufacturers.

"Being an Asian leader," Mr. Tanti said, "we cannot afford to ignore

A dozen Chinese manufacturers have jumped into wind-turbine
manufacturing as well. They have struggled with quality problems and
have limited production capacity so far, resulting in long delivery

But the Chinese producers already have an edge on price over imported
equipment, according to Meiya Power of Hong Kong, which owns and
operates power plants in China and across Asia, and is considering a
wind farm in windswept Inner Mongolia.

Mr. Tanti said that rapid innovation and design changes would allow
Suzlon to stay ahead of copycats. "It's a time-consuming process," he
said, estimating that it would take two to three years for rivals to
clone Suzlon turbines because they use unique or proprietary parts.

Suzlon manufactures its turbines at two factories in India, but has
begun test production at a just-completed turbine-blade factory in
Minnesota, where it already supplies turbines for a wind farm operated
by the Edison Mission Group and Deere & Company. It has also begun
test production at a Chinese factory that will make both turbines and

To reach the Suzlon wind farm here, the huge rotors travel by night on
special trucks for a 300-mile journey from northwestern India on a
succession of paved and dirt roads.

Squatter huts have had to be removed along the way to allow the long
trucks to turn; Suzlon is not required to pay compensation but often
makes donations in these cases, Mr. Farook said.

The truck crews also carry wooden poles to prop up electricity wires
across the road and pass underneath. The trucks sometimes attract
gawkers, and live wires occasionally burn bystanders.

"With human error, it may touch human flesh," Mr. Farook said. "In
that case, we have to pay compensation."

Villagers in Khori said that thievery and even robberies by rock-
throwing gangs were nothing new, and were a problem long before Suzlon
began setting up wind turbines. The company's response -- stepping up
patrols by security guards -- has reduced everyday crime. That has
made villagers more willing to rent land at the edge of their fields
for the turbines.

At first, "we were really confused about what was going on," Mr. Patil
said. "But now we're O.K. on it."