Wind Force Newsletter Sep, Edition

NewsletterNewsletterSep 2011

Issue 01

www.windforce-management.com

Enabling High Efficiency and Reliable Wind Power Projects

From WinDForce Team

WinDForce, from its humble beginnings in 2008 has emerged as the leading wind

energy consulting firm. Co-founded by Jami Hossain, a wind energy expert of

international repute and Emergent Ventures (EVI), the company through its adherence

to sound engineering and business principles, quality and neutrality has consistently

delivered high value services to its clients and now has the status of a preferred service

provider. In a short period, WinDForce has established its foot print in highly advanced

countries like Japan as well as in developing countries and economies such as

Mauritius and Kenya.

All Stakeholders engaged with WinDForce have immensely benefitted from it's

services due to a very high level quality of services that have enabled sound investment

decisions, risk mitigation and high performance wind energy projects. The

appreciation of clients of the WinDForce services is reflected in repeat orders.

Growth and appreciation of WinDForce as the leading service provider in wind energy

sector is driven by its core values and philosophy of no compromise on business

rationality and the scientific and engineering principles.

Some of the examples of major interventions as Owner's Engineers in project

execution by WinDForce includes recommendations to carry out detailed due

diligence after a desktop study of assets, to abandon a windfarm site due to poor wind

resource assessed by us, to abandon a given site due to low soil bearing capacity, to

redesign of the foundation in keeping with soil conditions, to completely replace rotor

blades due to damaged blades having been delivered at site, to completely reconstruct

Wind Turbine Generator foundation because of consistent failure under strength tests.

Apart from some of these major decisions, WinDForce has been able to ensure high

industry standards due to the consistent and round the clock monitoring of all activities

during project execution.

The wind sector in India is on the verge of a major change as is evidenced by a slew of

important policy and regulatory changes such as Generation Based Incentive (GBI) and

enabling issue and trading of Renewable Energy Certificates (REC), to name a few.

Highest megawatts installed in 2010-2011 point to the growing interest in this sector in

India. The rate of growth is also likely to grow significantly in the current financial year.

From its very inception, WinDForce has strived to keep various stake holders informed

of the new developments in policy and technology and to educate them on potential

pitfalls and risks in wind energy investments. In this endeavor to show the way on how

to build sound wind energy assets, WinDForce is now initiating this Newsletter. We

hope the WinDForce Newsletter serves the purpose of crucial information update to

investors.

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Ÿ Wind Resource Assessment (WRA)

Ÿ Structuring of PPA/ Sale of power and

management

Ÿ Owner’s Engineer during the complete

project implementation & post

commissioning

Ÿ Detailed Project feasibility Study

Ÿ Detailed Project Report

Ÿ Contract Advisory

Ÿ Technical Due Diligence of proposed

as well as existing wind farms

Ÿ Technical Due Diligence of New

Manufacturing Facility

Ÿ Environment Impact Assessment

Ÿ Development/ Co-development of

Wind Power Projects at Identified sites

by WinDForce

Ÿ WRA for more than 2000+ Mws

Ÿ Owner’s Engineer for 150+ Mws

Ÿ Technical Due Diligence for 800+ Mws

Ÿ Integrated Development Services (IDS)

for 100+ Mws

Ÿ Own Project Development for 100+

Mws

Ÿ Detailed Project Report for more than

300+ Mws.

DPR for the Reliance Power upcoming

project (200 MW in Maharashtra) has been

prepared by WinDForce.

WinDForce has been selected as a Project

Management Consultant by KTDA for 10-

50 MW Wind Power Project in Kenya. The

assignment involves whole gamut of

services for a wind power project starting

from site identification, mast installation,

wind data collection and analysis, site

acquisition, environmental impact

assessment, tendering & contracting,

assistance in financial evaluation, owners

engineer during project implementation,

commissioning etc.

WinDForce Services

WinDForce Achievements


Policy & Regulatory

GBI structure under evaluation by MNRE

MNRE is evaluating the current GBI scheme and mulling on the idea to extend the

same beyond 31st March 2011. It also desires to study the barriers, constraints like

capping @ Rs 62 Lacs per MW. MNRE has finalized a consultant to study the above

including the effect of GST and Direct Tax Code (DTC) on GBI. As of now, Captive

power users are not eligible for GBI; however, MNRE wishes to study inclusion of these

projects in the new GBI scheme. GBI was introduced as a parallel scheme to support

the investors (especially Indian and foreign IPPs) to invest more in Wind Sector in India.

The GBI being a generation based incentive was also envisaged to bring about

improvement in technology as against any possible remedial measures in already

existing scheme.. MNRE also intends to study the possibility to increase the current rate

per kWh (@ Rs. 0.50/ Kwh).

Karnataka DISCOMs to increase energy charges

For Wind Projects, the inter DISCOM open access charges are one of the highest in

Karnataka. Local DISCOMs have proposed to increase the energy charges by 88 paisa

per unit for both HT commercial and HT industrial consumers. With increase in the HT

tariff for Industrial and Commercial Consumers, Captive Use and/ or third party sale of

Power generated from Wind Project is likely to catch up fast in order to freeze the steep

(~ 20%) increase in cost of power bought through DISCOMs.

Beginning of a new Era in Indian Wind Energy Sector

Till now, most (>97%) of the wind projects in India have been developed by the

Original Equipment Manufacturers(OEMs) on turnkey basis - the OEM implements the

projects from concept to commissioning (including land arrangement, supply of WTG,

project implementation etc.) for any investor. In this an investor doesn’t have a choice

for WTG and usually the same WTG model is installed in different wind regimes

leading to sub-optimal throughput. Off-late the market is taking a turn towards

developer driven scenario (which is prevalent in other countries as well), where the

investor (sometimes along with regional developers) do the site development and

decides the OEM for supply of WTG and some allied work. In this, the investor have an

inherent advantage of selection of WTG best suitable (technically and commercially)

for the specific site(s) to achieve optimal throughput.

In India, most of the established OEMs are open to this model as this leads to lesser

hassle in the project implementation issues like land and power evacuation

arrangements which are taken care of by the Investor/ project developer.

One more positive, and most desirable outcome of this model, is decreased reliance on

the OEMs by the investor and hence it should lead to reduction in capital cost per kWh

to the investor(s). This benefit to investor is likely to get augmented further with the

arrival of some large Chinese WTG OEMs in India who are aggressively exploring the

Indian market. This is likely to induce a price war amongst the OEMs and is expected to

result in decrease of the capital cost per kWh.

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What’s New



Chinese Wind Turbine Manufacturer

China's largest wind turbine manufacturer Sinovel (world's second largest after

Vestas), has tied up with the Maharashtra-based Ghodawat Energy for renting

Ghodawat's manufacturing facilities to produce its 1.5 MW WTGs.

Other Chinese WTG manufacturers like Ming Yang Wind Power Company, Shanghai

Electric Company, Dong Fang etc. are also interested in entering Indian market.

R-Power to set up 200-MW wind farm

Reliance Power plans to set up a 200 MW wind power project at Vashpet in the Sangli

district of Maharashtra. R-Power plans to install 80 2.5-MW Global Wind Power

Limited’s wind turbine generators that are based on the technology of Fuhrlander,

Germany. The project is to be commissioned by September 2012. R-Power has already

entered into a long-term power purchase agreement with Reliance Infrastructure for Rs

5.37 per unit. R-Power has opted for availing GBI benefit.

Ÿ Indiabulls Power Limited has come out with an NIT inviting bids from different

bidders for development of ~ 5 MW Wind Power Project on LSTK basis

Ÿ ONGC has reopened the NIT for Construction of 102 MW Wind Power Project in

Rajasthan under International Competitive Bidding (Two bid system) through e-

procurement.

Ÿ NALCO has come out with an NIT for the appointment of Consulting Firm for

evaluation of bids to be received against the tender(RFP) to be floated by NALCO in

order to award EPC contract of 50 MW Wind Power Plant

WinDForce Participated in “5th Renewable Energy India 2011 Expo” held in New

Delhi as an exhibitor as well as, as a delegate and speaker.

Ÿ Mr. Vinod Kala (Chairman - WinDForce) was in a panel discussion on the topic of

Renewable Energy Certificate (RECs) and Generation Based Incentive (GBI), after

inauguration ceremony on first day.

Ÿ Mr. Jami Hossain (Chief Mentor & Co-founder of WinDForce) was one of the

panelist in a panel discussion during the last day of the conference.

Ÿ Power Trading Summit India 2011: 26th September, 2011 The Crowne Plaza, New

Delhi

Ÿ RENEWCON INDIA 2011: 27-30 September 2011 - Holiday Inn Mumbai

International Airport Mumbai, India

Ÿ RENEWTECH INDIA 2011: International Exhibition & Conference on Renewable

Energy from 10-12 November 2011 at Bombay Exhibition Centre, Goregaon,

Mumbai, India.

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Tenders

Events

Upcoming Events


rdCERC vide its Order Petition No 142/2011 (Suo Motu) dated 23 August 2011 has

notified the forbearance and Floor Price for the RECs for non solar projects which is

applicable from 1st April 2012 and shall remain valid for the control period upto

financial year 2016-17 as mentioned in the table below.

Stakeholders were expecting an order with longer control period (8-10 years,

approximately equal to the loan tenure). Still this order should be attractive to the

investors. With a certainty of a fixed REC prices for 5 years the banks, PEs and other

financial institutions are now showing more interest in REC based projects.

Graph showing trend over the last five months of REC trading

The above graph clearly indicates that the REC trading volume along with price is

increasing every month. This has started building confidence in investor as well as ndlenders for the REC based Wind Power Projects. In the recent trading held on 2

September 2011, there were buy bids for ~ 1, 83,305 RECs against sell bids for ~58,052

RECs.

During the last one year, except for the beginning, the short term market price of

electricity in bilateral deals was higher than the prices realised at the power exchanges,

as evident from the graph above. The graph depicts the prices for the inter-state

transactions only. The electricity price in bilateral arrangements in the year 2011 was

observed to be lower than that from year 2010 showing a decrease in prices. The ratio

of electricity traded on power exchanges to that of short term bilateral trades has

increased from ~22% in 2009-10 to ~36% in the year 2010-11.

Graph showing trend of Electricity Price in Short Term Market in FY 2010-11

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Renewable Energy Certificate (REC)

Parameter Current (till 31.03.2011) From 01.04.2012

Forbearance 3900 3300

Floor 1500 1500

Corporate Office

WinDForce Management Services Pvt. Ltd.th5 Floor, Universal Trade Tower

Gurgaon - Sohna Road

Gurgaon - 122001, Haryana

Tel: +91 - 124-4353100

Fax: +91-124-4102980

Web: www.windforce-management.com

Contact Us

Kindly write to us if you have any comments on this Newsletter. Your valuable

feedback on this would motivate and help us in improving the quality and

enriching the content. We are eagerly waiting for your kind response to the

articles presented in this Newsletter.

Parish Gupta

Mob: +91 98717 11445

E-mail: [email protected]

Rupesh Singh

Mob: +91 96507 58884

E-mail: [email protected]

A WinDForce Publication

Disclaimer - This Newsletter has been compiled by WinDForce Management Services Private

Limited for circulation among the stakeholders in the energy market. Though the contents of this

bulletin are correct to the best of our knowledge, WinDForce does not vouch for their accuracy.


Wind Force Newsletter Sep, Edition

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