July 8 (Bloomberg) -- General Electric Co., the world’s second-biggest maker of wind turbines, shifted production in India to the west, with the country’s most untapped potential for the alternative power, from a saturated southern market.
The company stopped assembling turbines at its facility in Chennai in the southern state of Tamil Nadu and moved production to a plant opened this year in Pune, in the west, GE said in an e-mailed response to questions.
“We plan to eventually grow the capacity to 450 megawatts yearly in line with the growth in demand,” GE said, without specifying current output.
The shift may make it easier for GE to supply projects in states including Maharashtra, where Pune is located, Gujarat, Rajasthan and Karnataka, which, according to the Global Wind Energy Council, have India’s most untapped wind potential. In India, which ranks behind Ethiopia and Indonesia in infrastructure quality, the biggest problem for wind projects is transporting turbines and components along poor roads, according to Suzlon Energy Ltd., the nation’s dominant supplier.
Tamil Nadu is struggling with congestion that is crimping investment in wind power. CLP Holdings Ltd., Hong Kong’s largest power supplier and India’s biggest wind-farm developer, passed on a chance expand a project in the state by 50 megawatts because the local electricity grid was unable to take additional capacity.
“We had to let it go because we could anticipate that for the first three years of operation we would have heavy power evacuation issues,” Mahesh Makhija, director of renewables at CLP’s local unit, said in an interview on June 23.
In contrast, the states closer to GE’s new facility can host another 22,000 megawatts of projects, 55 percent more than India’s current wind capacity, according to the government.
GE is assembling 1.5-megawatt and 1.6-megawatt turbines designed for low wind speeds at Pune, which is about 150 kilometers (93 miles) south of Mumbai, India’s financial hub.
Fairfield, Connecticut-based GE has also invested in developing a local supply chain to buy components in India, it said. Overseas turbine makers are increasingly relying on cheaper Asian suppliers to help trim costs and increase competitiveness.
Repower Systems SE, based in Hamburg, will start making turbines in India for the first time this year and expects to cut costs on average by 15 percent by buying more parts from Asia, Chief Executive Officer Andreas Nauen said in an interview last month.
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