Wind Power Snapshot - Vikram Parekh

8/8/2019 Wind Power Snapshot - Vikram Parekh

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A Snapshot

Wind Power Industry In India


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ContentsBasics Wind power & industry

Regulatory framework Indian RE power industry

Benefits General & business

Demand - Supply Power in India

Incentives Schemes Central & state governments

Wind power as a business Revenues, business model, concerns

Way forward Opportunity for Soma, contacts, tentative costs (initial budget)


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Basics

Wind Power & Industry Wind is the natural movement of air across land or sea, caused by uneven heating

and cooling of the earth's surface and by earth's rotation

Wind electric generator converts kinetic energy available in wind to electrical

energy by using rotor, gearbox and generator

Wind power is one of the fastest growing energy sources in the world

,

Global warming forcing countriesto generate clean power

Regulatory policies at central and

state level are shaping towards

promoting clean power generating Even international are being

framed towards supporting and

sustaining greenl projects


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Quick facts

Indian Wind Power Industry

Expected to deliver at least 10% of the worlds energy production by 2020

Potential of 48561 MW across India considering only 1% of land availability

Wind installed capacity, over 14000 MW till date (fifth in the world)

Only country in the world to have a dedicated Ministry of New and Renewable

Energy (MNRE)

a r y evo ve processes an po cy ramewor

Several established turbine manufacturers, consultants functioning in India.

Turn-around time of less then one year from concept to commission


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Ministry of New and Renewable Energy (MNRE) Central authority for all policies,

regulations and approvals relating to renewable energy.

Central Electricity Regulatory Commission (CERC) - deals with the national grid and

inter-state transfer/trading of power,

Regulatory Framework

Indian RE Power Industry

State Electricity Regulatory Commission (SERC) - manage regional distribution and

transmissions. They play a key role in the promotion of renewable energy as they

have the sole authority to ascertain the feed-in tariffs and other policy matters,

such as the Renewable Portfolio Standard (RPS).


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Energy Development Agencies (EDAs) - represent the MNRE at the state level. Their

main purpose is to assess and promote renewable energy frameworks for

individual states, and to advise the MNRE, state governments and SERCs.

The Indian Renewable Energy Development Agency (IREDA) promotes financial

assistance for renewable ener and ener efficienc ro ects in India.

Regulatory Framework

Indian Power Industry Cont.

C-WET center for Wind Energy Technology entrusted with carrying out Research

and development in the field of wind power


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Benefits - general

Reduces climate change and other environmental pollution

Cheapest source of electrical energy

Can be utilized as a shield against increasing power prices. Fuel source is free, abundant and inexhaustible

Creates employment, regional growth and innovation

It can be tapped from almost any where, even mostremote of locations


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Least equity participation required, as well as low cost debt is easily available to

wind energy projects.

A project with the fastest payback period.

A real fast track power project, with the lowest gestation period; and a modular

concept.

Benefits - business

(O&M) costs

No marketing risks, as the

product is electrical energy.

Promotional incentives from

central, state governments inIndia

Potential revenue from Certified

Emission Reductions (CERs)


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Demand

Power in India Per capita energy consumption in India is currently at 631 KWH per annum.

India constantly growing at over 7 to 8% annually. Power production needs to

pace up to fuel this growth

Expected to touch 1000

KWH per annum by 2012

th

add 79000 MW to currentcapacity

Power generation needs to

be more than double the

current capacity to fuel thepower needs by the year

2020


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Supply

Power inIndia (wind)


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Incentives

Central Government Under the Income Tax Act, the Govt. of India permits 80% Accelerated Depreciation

on specified Non Conventional Energy Devices / Systems (including wind power

equipment) in the first year of installation of the projects.

A ten year tax holiday has been allowed in respect of profits and gains of new

industrial undertakings set up anywhere in India for either generation or for

generation and distribution of power.

The Govt. of India has announced Generation Based Incentive (GBI) @ 50 paisa perKWH in respective of developers who are not availing accelerated depreciation

benefit as per MNRE lr no. 53/1/2008-WE dated 17/12/2009. This scheme is not

applicable for third party sale and merchant plants but is applicable for Captive

power generation

The RPS renewable portfolio standard announced by the government shall

guarantee sale of RE power generated for at-least next 10 years

Soft loans from IREDA at lower interest rates (approx 11.75 to 12.9%), along with a

moratorium of 1 year and repayment period of 10 years


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Incentives

State Government (Andhra) Each Eligible developer may be allocated available Govt. land to harness upto a

maximum of 200 MW of wind power initially. After commissioning of 100 MW

capacity Wind farms in 1st stage in the allocated Govt. land, the Government mayallocate land for another 100 MW capacity Wind Farms. The application from thedevelopers for Government land will be considered on a first-cum-first-servedbasis.

The state Government has permitted DISCOMs to offer Rs.3.50 / KWH for windpower projects for 10 years from the date of commissioning of the projects, subjectto obtaining the consent of AP Electricity Regulatory Commission. The tariff for theperiod 11th year to 20th year shall be as fixed by APERC.

The DISCOMS (distribution companies) shall have the first right of refusal on PowerPurchase if the Plant continues to operate after the 20th year of operation fromCOD. The tariff beyond 20th year shall be as mutually agreed by both the parties(company & discom).


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Incentives

State Government (All States)

State Incentives -

Wind Power


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Wind Power as a Business

Potential Revenues Tariff

Varies from state to state (generally ranges from INR 3 to 5 per KWH

Tariff regulated for at-least 10 years from date of commissioning by a Power Purchase

Agreement (PPA)

Higher tariff could be charges in case of merchant selling of generated power

Generation based incentive

It is INR 0.50 per KWH Applicable only to generating companies who do not claim the accelerated depreciation

of 80%

REC

It is approximated at INR 1.5 per KWH (not yet finalized)

It is applicable in case state tariff are not followed

CER

It is approximately EURO 8 per CER (Approximate)

One CER is awarded for 92% of each MW power sold (Approximate)


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Business Model

Cost of setting

up wind power

the range ofINR 7 to 8 Crore

per MW


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Wind Power

Generation in India

ION(MW)

YEAR

GENER

AT


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Clarity in Grid Code yet to be achieved. Leading to difficulties in integrating

wind power efficiently with the grid, resulting in low capacity utilization factor.

Many people find them loud and unsightly.

Even the most advanced turbines can extract only a maximum of 45 percent of

the winds energy.


Concerns

Ma or re a ty on unpre cta e source o power ma es t cu t to re y on

power availability and hence asks for large capacities of stand-by power

Land acquisition, costly and complicated


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VIKRAM [email protected]

Wind Power Snapshot - Vikram Parekh

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