Green Techlology

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Green Technology in India, Emerging areas and Opportunities

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Green Techlology

  1. 1. April 2010 Mansoor Khan
  2. 2. Global warming and the solution Every decade since the 70’s has been progressively warmer. The solution is to switch to green, non polluting sources of energy  This is primarily caused by burning of fossil fuels and improper  And provide greater focus on Pollution control technology, Water  disposal of wastes Provisioning, and Agribusiness The government is providing incentives in the form of accelerated depreciation,  India’s electricity demand will triple between 2008 and 2038 fixed‐rate contracts, generation based incentives, subsidized land and low  interest rates for debt financing. Indian government wants 20% of energy from renewable sources by 2020 24-Aug-11 2
  3. 3. Role of the Financial Sector The Financial Sector does not have a direct impact on the environment, but in  its role as intermediary  in the economy, it can BOOST the development of  clean and sustainable technologies It can WEIGH and attach environmental risks, in a similar manner as it does  the financial risks to assess the overall sustainability of a project In renewable energy, 70% of the cost is externally financed via debt PE and VC players also contribute on equity side According to the International Finance Corporation (IFC) ‐“Sustainability is  about ensuring long term business success while contributing towards  economic and social development, a healthy environment and a stable  society.”24-Aug-11 3
  4. 4. Green Cluster – the global scenario  Investments in Renewable Energy CAGR : 30.8World energy demand is expected to rise 60% by 2030 Between 2010 and 2020 the worlds supply  Billion USD of oil and gas will fall below the level  required to meet international demand  Oil prices will escalate, leading to huge oil  import bill 73 countries (including India) have targets   to obtain at least some percentage of energy  from renewables World CAGR : 57.63 Equity Offerings 19.95% Billion USD Developing Countries Renewable Energy Investment Opportunities in Emerging Economies http://www.renewableenergymagazine.com/paginas/Contenidosecciones.asp?ID=14&Cod=5264&Tipo=&Nombre=Latest%20news http://www.commodityonline.com/news/Renewable-energy-boom-in-emerging-economies-25863-3-1.html GBI Research24-Aug-11 4
  5. 5. Indian Power Scenario : Should we go green ? Union Budget of India for 2010-2011 includes a 61 percent  India generated 724 bn KWh in 2008‐09, the  budget increase (US$223.5 million) directed to the MNRE as fifth largest in the world  part of National Action Plan on Climate Change  Our per capita consumption is low  We have enough coal But there is still a power shortage of around 10% with demand slated to triple by 2030 But Overall, we have 17% of the world’s population and only 0.8% of oil and gas Actually, India was forced increase coal imports to16.7 % from April to December of 2009, up from 9.7 % a year ago In 2009-10, India added 2.33 GW of Investments in Renewable energy –India (Million USD) renewable power of which 1.57 GW was contributed by wind ,0.31 GW by small hydro and 0.45 by Biomass ,more than Required by Law 100% increase from 2008-09 State  Andhra Pradesh  Renewable Purchase Obligation 5% Gujarat  2% Haryana  3‐10%  Karnataka  Min 10%  MNRE’s 2020 target for electricity Kerala  5% generation from renewables is 20% of Madhya Pradesh  10% total capacity including 20,000 MW of Maharashtra  3% (annual increase of 1% )  Solar Power and 40,000 MW for Wind Orissa  Rajasthan  450 MU  7.50% Energy Tamil Nadu  10% Uttar Pradesh  7.50% West Bengal  3.80% http://www.2point6billion.com/news/2010/04/16/india-china-clean-tech-comparison-5350.html MNRE http://www.commodityonline.com/news/Renewable-energy-boom-in-emerging-economies-25863-3-1.html DNA June 1201024-Aug-11 5
  6. 6. PEST analysis : Green Clusters in India Political / Legal Economic Social Technological First country to form a ministry of -Economy on the upswing People more willing to set up - Government committed to renewable energy (MNRE) -11th Plan (2007-2012) Target – off grid installations spending on research on RE 14000 MW from Renewable energy technologies Electricity Act, 2003 National Electricity Policy, 2005 National Clean Energy Fund for Integrated Energy Policy, 2006 clean energy technologies Rural Electrification Policy, 2006 # -Rs 50 per tonne cess imposed on -Accelerated Depreciation in 1st - Due to increasing awareness -Global competition is forcing Coal, leading to an increase in coal year on Capex and population more people industry players to improve based power -Low rate loans available (at 5% for demanding access to clean technology Solar 9-12 % for others) water and clean power On domestic and imported, as -generation-based subsidy per budget 2010 - Kyoto Protocol and other - Fixed Rate Contracts of up to 20 - Cheap rate labor available - Price of Solar PV , Wind turbines, international agreements put an years with an escalation clause, for making RE equipment Bio Gas systems falling every emphasis on reducing the carbon electricity produced using RE manufacturing and installation year footprint; System of Carbon credits cheaper trade further sweetens the deal for clean energy - Huge tracts of land set aside by state 100% equity investment allowed with - More and more people - Indian companies collaborating governments for set up of Solar grids, permission from FIPB becoming environmentally with foreign companies across all wind farms Foreign Investors cam set up conscious RE technologies Gujarat and Rajasthan Financial/Technical JV , Can operate on BOOT basis # Promoted generation of Emphasized full development Renewables to reduce RE energy sources can be electricity from renewable of feasible hydro projects dependence on energy imports utilized for power to all http://www.assocham.org/3rdasia/presentations/p24-04-08/Planery_Session/kuljit.pdf http://www.merinews.com/article/renewable-energy-act-to-meet-indias-future-needs/126343.shtml http://www.mnre.gov.in/press-releases/press-release-28042008-4.pdf24-Aug-11 6
  7. 7. Green Finance in India  Some of the financial institutions that fund renewable energy projects in India : Institution Equity Debt CDM Product Details Partners SBI MITCON Consultancy Services Ltd,  Advisory services, securitization of carbon credit receivables,  Ecosecurities India Private Ltd and  Y Y delivery guarantees and escrow mechanism for carbon credits Cantor CO2E India Private Ltd IREDA Y Y more  than 1775 Projects, involving loan of Rs. 74.47 Billion. Supported by WB and ADB PFC Y Power Projects  – Wind, Small Hydro, Biomass IL&FS  Conventional and Renewable power Y Municipal solid waste treatment   Enercon  PNB Have a product for Solar – heating systems, solar cells and appliances Y Y CDM advisory RaboBank Renewable energy finance, Carbon Credits, Green banking, Clean  Suzlon, Enercon, BILT Power,  Y Y Tech Fund Super Wind ADB Y Asia Solar Energy Initiative (ASEI) ‐ to provide $2.25bn IFC Y renewable energy,  $720m Yes Bank 20% of total Infrastructure target is to come from Renewable energy  Y Finance ICICI Bank reduction of carbon footprint. Energy Efficiency, Cleaner Fuels,  Bioenergy, Small hydropower, FuelCells Concessional Loans upto a maximum of 50% of the project cost;  Repayment is structured as per project and programme Y Y requirements Proparco Y environment‐focused projects IDFC Y Y Small Hydro, Biomass, Waste to energy, water treatment ADB and World Bank Energy Alternatives India Report http://www.rabobank.com/content/images/GreenBanking_FactSheet_tcm43-79091.pdf http://www.rabobank.com/content/images/Few%20Important%20Deals_tcm43-78649.pdf http://www.ilfsindia.com/overview.asp?section_id=3&child_id=12#a http://www.azurepower.com/main/index.php/press_room/ http://www.financialexpress.com/news/now-banks-eye-green-financing/213967/24-Aug-11 7
  8. 8. 1. Clean Energy
  9. 9. rdOverview of Indian Power Sector Renewable Energy is the 3 largest source of power in India, thrice as big as Nuclear Power Series1,  Private  Others, 8.6,  Sector Series1,  8% Series1,  22628, Agricultural,  Domestic,  15% Series1, Hydro,  22.9, 23% 24.8, 25% Series1,  36877.76, 25% State Sector Series1,  Thermal,  76115, Nuclear ,  Central  93,398.84, 63% Series1,  52% 4,120.00, 3% Sector Industrial,  48970, Series1,  35.6, 36% 33% Commercial,  Series1,  8.1, 8% Renewable ,  13,242.41, 9% Total Installed Capacity (by Sector) Total Installed Capacity (by Source) Electricity Use Wind Power is the clear choice when it comes to developing capacity, followed by small hydro , this is For a total market of around 310 MW, there is some Series1,  further strengthened by the low capital and generating scope in Off grid power plants using Bio Mass Aerogenerator cost of both /hybrid, 0.89,  Series1, Waste  0% to energy,  31.06, 9% Small  Biomass gasifier,  Hydro,  Series1,  2344.67 Cogeneration  160.31 Bagasse, 1033.73,  8% Series1,  Series1, Other,  Other,  Series1, Wind,  1778.06, 13% 9755.85, 70% Series1, BioMass  Series1,  3.89, 1% (argoresidues),  Biomass  683.3, 5% power/coge Series1, Solar  n, 150.92,  PV, 3, 1% Series1, Solar PV,  2.12, 0% 44% Series1, Waste to  Energy, 58.91, 0% Off Grid Renewable Energy On Grid Renewable Energy There is major scope only in on- grid systems in Renewable Energy (All Figures in MW) 24‐Aug‐11 9 Ministry Of Power Govt. of India Feb 2009 http://jrse.aip.org/jrsebh/v1/i4/p042701_s1?view=fulltext
  10. 10. 1.1 Wind Power
  11. 11. Wind Power Worldwide Wind is the world’s fastest‐growing source of power generation with an average annual growth of 29%  over the last ten years World’s wind power capacity grew by 31% in 2009. (In China it grew100%). Total Installed Capacity at the  end of 2009 :157.9 GW http://www.gwec.net/index.php?id=30&tx_ttnews[tt_news]=247 In future the global wind industry is estimated to grow at a CAGR of 19.75% between 2008 and 2015 to  reach 425GW by 2015 Global Wind Power Report 2009 The main players of this industry are Enercon, Gamesa, GE, Nordex AG, Siemens, Suzlon and Vestas
  12. 12. Indian Scenario  India has low to medium wind speeds and first established wind energy farms in the 1990s  In 2009, India added 1,270 MW of Wind Power. It now ranks fifth in total installed capacity with 10,950  MW (January 2010)  95 per cent of the investments in the wind power come from the private sector          India has a strong domestic manufacturing base helping the growth of the wind energy market.  Amongst these manufacturers is Suzlon, now a player on the global market  There is an estimated potential capacity of 48,561 MW, which is considered a conservative estimate,  some other estimates are as high as 100,000 MW  To develop all of this opportunity (48 GW)  investment needed is around 2,44,472 cr http://www.indianwindpower.com/installed_wind_capacity.php Indian Ministry of New and Renewable Energy (MNRE)24-Aug-11 12
  13. 13. Series1, Installed  Wind Power Capacity, 10242,  21%Capital Costs Rs. 6.5cr per MWGeneration Cost Rs. 0.6 per KWh (O&M and Insurance) Remaining Industry growth rate   34% pa since 2004 Capacity, 38319Industry Worth  Rs 11,100 crCarbon Credits Can earn 26.95 mnEuros (INR 159 cr) for existing wind power projects (according to IWTMA)http://www.cwet.tn.nic.in/html/information_gi.html http://www.indianwindpower.com/why_invest_wenergy.php Gross  Potential vs. developed Capacity States  Gross Potential States  Developed Capacity Gujarat 9675 Tamil Nadu  3873.4 Andhra Pradesh 8275 Maharashtra  1755.9 Maharashtra, Gujarat,  Tamil Nadu, and  Karnataka  6620 Gujarat  1252.9 Andhra Pradesh  Madhya Pradesh  5500 Karnataka  1011.4 account for 60% of the  Rajasthan  5400 Rajasthan 538.8 total potential—and   Tamil Nadu  5200 Madhya Pradesh  187.7 have 90% of the total  Maharashtra  3650 Andhra Pradesh  122.5 installed wind  Orissa  1700 Others 3.2 generation capacity Kerala  875 Kerala  2 West Bengal  450 West Bengal  1.1 Total  45195 Total  8748.7 http://www.indianwindpower.com/pdf/Gross%20Potential%20Wind%20Energy.pdf24-Aug-11 13
  14. 14. Untapped Potential Incentives from the maximum potential states Gujarat  ‐ Wind Power Policy ‐ 2007   Incentives for Wind Turbine Generators for a  period of 20 years;  provision for wheeling electricity at 4 per cent  charge;  provision to sell power to any entity at higher  prices i.e. third party sale;  MW  exemption from electricity duty and demand cut  to the extent of 30 per cent;   raising the rate of sale of power to Gujarat Urja Vikas Nigam Limited (GUVNL) to Rs 3.37 per  unit www.airvoicegroup.in/gujarat4.htm  Andhra Pradesh  The capital subsidy to the extent of 20 % of the  project cost   Government lands shall be given on long lease  for 20 years, free of rent for the first five years.   APSEB shall deduct 2% of the generated energy  fed to the grid by the wind mills towards  wheeling charges during the initial period of 5  years  Banking charges : banking of energy only for a  period of 8 months in a year  Additional two per cent of energy banking  Installed charges. http://www.dcmsme.gov.in/policies/statelaw/andhra.htm Remaining http://www.indianwindpower.com/pdf/Gross%20Potential%20Wind%20Energy.pdf24-Aug-11 14
  15. 15. State IncentivesItem States AP Gujrat Karnataka Kerela MP Maharash Rajasthan Tamil Nadu West Bengal traCaptive Use Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allowed AllowedWheeling At par with  4% of energy 5% of energy +  To be  2% of energy +  2% of  Below 132  5% of energy 7% of energy  conventional Rs.1.15/kWh  decided  transmission  Energy as  kV, 50% of  + open  as  cross subsidy  by SERC charges as per  wheeling +  normal  access charge for 3rd party sale.  ERC 5% as T&D  charges  loss. applicable  to 33 kV  decelared by  commissio n +  Surcharge  + Losses *Banking Not Allowed Allowed @2% of  Not Allowed 12 Months Six  5% (12  energy input Months months  Financial  year April to  March)Buy Back rate  Rs.3.50per kWh  Rs.3.55 per kWh Rs. 3.70 per kWh  Rs. 3.14  Year wise  Rs.3.50/k Levelised Rs.2.90 per  Rs.4 per kWhby SEB without any  (without any escalation  without any  per kWh  rates Wh (First  Tariff For  kWh escalation for 10  for 20 yrs.)  escalation for 10  without  1st Yr – 4.03 year of  Jaisalmer,  For WEG  years as per AP Govt.  yrs of commercial  any  2ND Yr – 3.86 commissio Jodhpur  commissione Policy amendment  operation  escalation  3RD Yr – 3.69  ning). and  d on after :‐ Date 09.09.2008  for 20 yrs.  4TH Yr – 3.52 Escalation  Barmer 19.09.08 – subject to approval of  5TH Yr – To  of 15% fro  district  20.03.09 =  APERC  20THYr – 3.36 1st 13 yrs Rs.4.28 per  2.90 per kWh  unit  20.03.09 ‐ Levelised 31.03.09 =  Tariff For  3.24 per kWh  other  01.04.09 =  district  3.39 per kWh  Rs.4.50 per  unit 
  16. 16. State Incentives (contd.) AP Gujrat Karnataka Kerela MP Maharashtra Rajasthan Tamil  West Bengal NaduThird Party  Allowed under  Allowed under  Allowed under  Allowed under  Allowed under  Allowed under  Allowed  Allowed  Allowed Sale Electricity Act  Electricity Act 2003  Electricity Act  Electricity Act  Electricity Act  Electricity Act  under  under  under  2003 subject to  subject to  2003 subject to  2003 subject to  2003 subject to  2003 subject to  Electricity  Electricity  Electricity  regulation  regulation framed  regulation framed  regulation framed  regulation  regulation  Act 2003  Act 2003  Act 2003  framed by  by respective SERCs  by respective  by respective  framed by  framed by  subject to  subject to  subject to  respective  SERCs SERCs respective  respective  regulation  regulation  regulation  SERCs SERCs SERCs framed by  framed by  framed by  respective  respective  respective  SERCs SERCs  SERCs Other  Industry Status  E.D. Exempted, No electricity  No electricity  Power  ExcemptioIncentives Demand cut 30% of  Duty for 5 yrs Duty for 5 yrs evacuation  n from  windfarm installed  arrangement,  elecricity capacity  Approach Road,  duty @ 50  Electricity Duty,  paise for 1st Loan to  7 years cooperative  societiesPenalty on  10 paise per  10 paise per kVArh  Rs. 0.40 Per  27 paise 25 paise 5 paise per  25 paise  25 paise per KVArh  kVArh upto  up to 10% and 20  kVArh  uear w.e.f.  per kVArh  kVArh if the Consumotion 10% & 25 paise  paise per KVArh  01/04/2006  if the  ration of  per kVArh  above 10% with  ration of  kVArh drawn  above 10% escalation  kVArh  to KWh  of 5% per  drawn to  exported is  year KWh  upto 10% and  exported  50 paise per  is upto  KVArh for  10% and  more than  50 paise  10%. per KVArh  for more  than 10% 24-Aug-11 16
  17. 17. Wind Power– Central Government Incentives Indirect Taxes Description of Goods Rates Wind operated electricity generators and battery chargers up to 30 KWh 5% Parts of wind operated electricity generators for manufacture of wind operated electricity  5% generators – Special bearing, gear box, yaw components, wind turbine controllers, rotor blades Raw material for manufacture 5% Sensor, brake hydraulics, brake calipers, flexible coupling 25% Devices exempted from excise duty Wind operated electricity generator and its components Water pumping wind mills, water aero generator and battery chargers Sales tax Exception/ reduction in CST and GST are available on sale of renewable energy equipment in various  states Direct Tax 80% Accelerated depreciation on RE systems in the 1st year of installation of projects Tax Holiday on power projects24-Aug-11 17
  18. 18. Wind Turbines – Major Manufacturers Company Market Share 2008 (of 1250 MW added) CAGR  Models  Order Book 2010 Suzlon Energy Ltd 69% 52% S64/1000 KW 2400‐2600 MW S 64/1250 KW USD 4,335 million. S 66/1250 kW S88/2100 kW Sulzon 600 KW S 70/1250 KW S82 600 KW RRB India Ltd 13% Pawan Shakthi—600 kW (previously  Vestas‐RRB) V39–500 kw V27—225 kW Vestas Wind Technology India Pvt.  9.6% V82‐1.65 MW Limited  NM48‐750 kW Others 8% GE Wind Energy India GE 1.5 sle 50 H 1500 KW Enercon (India) Ltd E‐33 330 KW E‐30 230 KW E‐40 600  KW NEG Micon NM 48/750, NM 54/950,  NM 82/V 82 1650 Elecon T600–48 600 KW Pioneer Asia  G52–850 kW Shriram E.P.C. Ltd. SEPC 250 T 250 KW http://www.vestas.com/en/media/win%5Bd%5D/article-display.aspx?action=3&NewsID=1904 http://www.moneycontrol.com/news/business/fy10-orderbook-at-2400-2600-mw-suzlon-energy_409481.html http://jrse.aip.org/jrsebh/v1/i4/p042701_s1?view=fulltext#c43 http://www.rrfinance.com/PDF_Files/Research_pdf/research_reports/sprcial_report/SUZLON%20-SWOT%20ANALYSIS.pdf24-Aug-11 18
  19. 19. Private Wind Farm Owners  Private Wind Farm owners in India (10 MW & above Capacity) (As on 31.03.2009) Total(MW) Sl. No Name of Owner 1 Madras Cement Ltd. 181.585  2 DLF Limited 161.200  3 Tata Power Company Limited 159.250  4 Enercon Windfarms Hindustan P. Ltd. 128.800  5 HZL  123.200  6 MSPL Limited 121.950  7 BP Energy India Pvt Ltd 99.400  8 Gujarat NRE Coke Limited 87.500  9 Essel Mining & Industries Ltd. 75.000  10 DLF Home Developers Ltd 67.500 http://www.windpowerindia.com/statpriv.html24-Aug-11 19
  20. 20. Wind Power – Consultants  Consultant Seminars , Publications BTM Consult ApS, Denmark World Market Update Report Centre for Wind Energy Technology (C‐ http://www.cwet.tn.nic.in WET) Consolidated Energy Consultants Ltd  www.windpowerindia.com (CECL) CECL has published journal on orders  issued by Electricity Regulatory  Commissions. Directory on Indian Wind Power IT Power India Business Development meet on Energy  Efficiency & Renewable Energy http://www.itpi.co.in Indian Wind Energy Association Biggest Wind Power Consultants (InWEA) www.inwea.org24-Aug-11 20
  21. 21. Upcoming Projects Company Technology  Capacity State Partner Gujarat Alkali & Chemicals  Suzlon 21 MW Gujarat (Rajkot District) Ltd (GACL)  Larsen & Toubro  Suzlon 8.7 MW Tamil Nadu Infrastructure  Development Projects Ltd CLP Power India Pvt Ltd,  Suzlon 346 MW Gujarat, Maharshtra, Karnataka and  subsidiary  CLP, Hong‐ Tamil Nadu Kong  Airvoice Group, Gurgaon  200 MW (part  Karnataka  in association with SJVN  of 3000 MW  wind energy  plan) Ghodawat Energy Limited  200 MW  Tamil Nadu and Maharashtra (GEL) SBI Suzlon 15 MW (plan  Tamil Nadu, Maharashtra and Gujarat 100 MW)24-Aug-11 21
  22. 22. SWOT – Wind Power Strength WeaknessCause Effect Cause EffectO&M costs are amongst the Almost at par with thermal Seasonal Fluctuations Cash flows may be affectedlowest in RE Low Wind periods Nov to MarchMonsoons-May to September Daily peak demand and peak Feeding to grid during highoffer high wind speeds generation is out of phase cost time is not possible without batteries or other storageZero Emission No waste disposal costs Requires long transmission T&D losses could be high linesMature manufacturing Industry Opportunities ThreatsCause Effect Cause EffectGovernment wants to develop Change in government policy – Customers may no longer be40000 MW Wind capacity by reduction of incentives profitable2020Untapped offshore Market Cause slight environmental Environmental Groups may put impact – Noise, Bird Hits pressure on new Wind Farm sites24-Aug-11 22
  23. 23. Geographic SpreadClean Power hk The Major States where wind power has developed are Tamil Nadu Maharashtra Gujarat Karnataka Rajasthan Madhya Pradesh Andhra Pradesh Kerala West Bengal As these estimates are taken some years ago, there is more potential than previously thought24-Aug-11 23
  24. 24. Common capacity of WTGs Small turbines have few moving parts and do not require regular maintenance. A rebuilt gearbox for a 1.5 MW turbine on an 80 meter tower will cost 3 to 4 times as much as for a rebuilt gearbox for a 660kW turbine, and most likely a lattice-boom crawler crane must be hired Wind Turbine Reliability: Understanding and Minimizing Wind Turbine Operation and Maintenance Costs Christopher A. Walford Global Energy Concepts, LLC Almost Obsolete 250 KW 251 -600 KW Manufacturer : Shriram EPC, RRB, Enercon,Pioneer Manufacturer : Suzlon,RRB, Enercon,Elecon Customers :SME, Captive Power Customers :Individuals, SMEs, Captive use Price : Price : 1.6 Crore Return pa : Return pa : 15 Lac Most used at Wind Farms 601 KW-1.25 M W 1.25 MW – 2.1 M W Manufacturer : Suzlon,Vestas,NEG Micon, Pioneer Asia Manufacturer : Suzlon, Vestas,GE,NEG Micon Customers : Tamil Nadu Govt. Muppandal wind farm Customers : SBI Price : Price : ~10 crore Return pa : Return pa : http://www.power-technology.com/projects/tamilnaduwind/24-Aug-11 24
  25. 25. Wind Energy Business  How it works in India The WTG manufacturer acquires suitable tracts of land  It gets ready T&D equipment, substations, lines to the grid etc . After micro siting it  decides what capacity turbines will work best A customer comes with a requirement of  power units Based on this and the average PLF the size and no of turbines are recommended. It  makes viable owning even a single turbine Customer needs to invest 30 % or  more as margin. The subsidy and depreciation  benefits  are obtained by the customer. The manufacturer may help in getting the  remaining loan and the CDM benefits  Using banking concept, power is fed into the grid at the wind farms and utilized wherever needed24-Aug-11 25
  26. 26. Financing for Wind Power IREDA Financing Scheme Interest Rate Maximum Minimum Term Loan (%) p.a Repayment Period Promoters Contribution From IREDA (Years) (%) Project Financing Setting up of wind  9.0 10 30 Upto 70% of farms total Project on ownership/lease  8.5 8 30 Cost basis 8.0 6 30 Others • SBI Most Customers prefer Bank financing –market rates are around 12% with a one year moratorium and margin amount of 30 – 35% • IDFC IREDA is avoided as it finances after commissioning Long term loans for about seven years is common, which can be extended or • PFC refinanced • ICICI • All banks finance wind power as normal projects based on IRR and relations with the customers or  the technology partner Market Size • INR 11100 cr • http://www.indianwindpower.com/why_invest_wenergy.php • around 70% is debt financed http://www.euindiawind.net/pdf/IREDA.pdf24-Aug-11 26
  27. 27. 1.2 Solar Power
  28. 28. Introduction Electricity can be generated  using solar energy   directly as with photovoltaic (PV)  indirectly as with concentrating solar power (CSP) Solar power has the potential to provide over 1,000 times total world energy ,it provided only  0.02%  (2008) World solar photovoltaic market installation was 7.3 GW in 2009  The Industry generated $ 38.5 billion in global revenues, growing 20% in 2009 Revenues are likely to reach US$ 100bn by 2014 Major PV Cell Manufacturers are Sharp Electronics, Q‐Cells, Suntech Power, First Solar,  SolarWorld, Sanyo and BP Solar http://en.wikipedia.org/wiki/Solar_power http://www.solarbuzz.com/Marketbuzz2009-intro.htm http://www.renewableenergyfocus.com/view/8241/worldwide-solar-pv-market-reaches-643-gw-in-2009/ http://www.edn.com/blog/1470000147/post/1040031904.html
  29. 29. Indian Scenario  India is both densely populated (favors off grid solar panels) and has high solar insolation (high conversion efficiency)  35,000 km² area of the Thar Desert has been set aside for solar power projects, sufficient to generate 700 to  2,100 GW  In the absence of the electrical grid, solar power is widely used for off grid uses like street  lighting and water pumps  The Semiconductor policy(2007) will provide 20 % (25% in non SEZ) of the capital  expenditure during the first 10 years for semiconductor industries  National Solar Mission (2009, $19 billion ) to produce 20 GW of solar power by 2020   Solar‐powered equipment and applications would be mandatory in all government buildings including  hospitals and hotels  To install 20 million square meter solar thermal collectors in the country by 2022 and save about 7,500 MW  power http://en.wikipedia.org/wiki/Solar_power_in_India#cite_note‐2 http://www.eai.in/ref/services/ime_consulting.html24-Aug-11 29
  30. 30. Series1, Installed  (off Grid), 98, 0%Solar Power Series1, Installed  (On Grid), 3.1, 0%Capital Costs      Rs. 17cr per MW  (PV)Capital Costs      Rs. 15.3cr per MW  (Thermal) Series1, Potential,  600000000, 100%Generation Cost  Rs. 15 per KWhIndustry is growth rate 48% pa Solar Power (Photovoltaic)Industry Size   48,000 crhttp://business.rediff.com/slide‐show/2009/jun/23/slide‐show‐1‐solar‐power‐and‐indias‐ambitious‐plans.htmEAI India Solar PV Report Potential 600 TW Installed (on grid) 3.10 MW Installed (off grid) 98 MW Development of Solar Power in India is at a Series1,  nascent stage, with the overwhelming Installed ,  1500000, 1% majority in off grid stand alone systems Series1,  Remaining,  138500000,  99% Solar Power (Thermal) http://en.wikipedia.org/wiki/Solar_power_in_India#cite_note-4 http://www.tn.gov.in/spc/tenthplan/CH_11_2.PDF http://www.cercind.gov.in/2010/ORDER/February2010/Order_Solar_Capital_Cost_Norm_13-2010%28Suo_muto%29.pdf24-Aug-11 30
  31. 31. Photovoltaic MNES is promoting use of PV technology to provide lighting in villages in the form of : Community lighting systems Capacity usually 1KW to 2.5 KW Portable solar lanterns Small 10Wp SPV module connected to a 12V7AH  battery lighting 7 W CFL lamp for 3 hours a day Street lights Built around a 75Wp SPV module charging a 100‐ 130AH battery to run a 11W CFL lamp for dusk to dawn  operation. Fixed home lighting systems Based on 35‐50Wp SPV module, powering two CFLs  each of 9 or 11W to work 4‐5 hours per day. Some  systems also incorporate facility to run a small TV set  or a fan from the power supply. Water Pumping Typically 1KW DC motor based pumping for shallow  pumping. Solar lanterns: 560,295 Number of solar street lighting systems: 55,795 Number of home lighting systems: 342,607 Solar photovoltaic pumps: 6,81824-Aug-11 31
  32. 32. Thermal The various thermal technologies promoted by government Solar water and space heating Penetration only amongst the high Solar process heating for industrial applications and middle high income group, bought with subsidy, and direct purchase from manufacturer Solar drying Solar refrigeration and air conditioning Solar water desalination and water purification Solar passive architecture Where land is readily available, this technology is cheaper than PV Array Solar cooking– Simple and concentrating cookers and has been used in many parts of the world for MW level plants Solar Thermal Power – Concentrating and using the sun’s heat to generate steam  and run a Rankine cycle 2 Solar water heating systems: 140 km of collector area Box-type solar cookers: 575,000 http://www.indiasolar.com/swhinfo.htm http://www.indiaenergyportal.org/subthemes_link.php?themeid=2&text=solar24-Aug-11 32
  33. 33. Solar Power tariffs across different statesState Conditions Solar PV Solar ThermalGujarat Commissioned before  Rs 13 per kWh for 1st 12 years   Rs 3 from 13th to  Rs 10 per kWh for 1st 12 years   Rs 3 from 13th to 25th 31/12/2012 25th Rs 09 per kWh for 1st 12 years   Rs 3 from 13th to 25th Commissioned after 31/12/2012 Rs 12 per kWh for 1st 12 years   Rs 3 from 13th to  25thHaryana Commissioned before  Rs 15.96 per kWh for 1st 12 years 31/12/2012 Rs 15.16 per kWh for 1st 12 years Commissioned after 31/12/2012Maharashtra Commissioned before  Rs 15  per kWh  Rs 13 per kWh 31/12/2012Punjab ‐ Rs 10  per kWh Rajasthan Commissioned before  Rs 15.78 per kWh for 1st 12 years Rs 13.78 per kWh for 1st 12 years 31/12/2012 Rs 15.18 per kWh for 1st 12 years Rs 13.18 per kWh for 1st 12 years Commissioned after 31/12/2012Tamil Nadu Commissioned before  Rs 15.15  per kWh  Rs 13.15 per kWh 31/12/2012West Bengal ‐ Rs 12.50 per kWh CRISIL
  34. 34. Solar Power– Central Government Incentives Central Electricity Regulatory Commission ‐ tariff  for 2010‐11: Rates Photo Voltaic Rs. 17.90 per unit Solar Thermal  Rs. 15.40 per unit For Capital  Expenditures 100% depreciation in the first year of installation of the systems No excise duty for manufacturers Low import tariff for several raw materials and components Soft loans to users, intermediaries and manufacturers Rooftop Power and Stand alone Small Grid‐connected Power Plant (RPSSGP) scheme will provide  Rs.4.5 lakh in subsidy, which is more than half the total estimated cost of Rs.8 lakh needed to install a  5 kilowatt solar plant in houses Subsidy for solar cookers has been increased by 20 per cent to 60 per cent www.cercind.gov.in http://www.indiasolar.com/SPV.htm http://www.24dunia.com/english-news/shownews/0/Solar-Mission-to-award-projects-based-on-tariff-discounts/5943833.html24-Aug-11 34
  35. 35. Solar Cell Manufacturers * Company Capacity in MW Order Book  2010 Velankani Industries 1500 Reliance Industries 1000 Moser Baer Photo Voltaic Ltd 580 Indosolar Ltd 360 Tata BP Solar 300 (75% of sales from exports) XL Telecom and Energy Ltd 120 Solar Semiconductors 60 Central Electronics Ltd 10 * Most of this produce is for the export Market24-Aug-11 35
  36. 36. Upcoming Projects Company Technology  Capacity State Partner Azure Power (PV) Tata BP  2 MW Karnataka Solar, HHV  Solar Azure Power (PV) Tata BP  10 MW Karnataka Solar, HHV  Solar ACME (CSP) e-Solar 10 MW (Rajasthan) 110 MW (Gujarat) 100 MW (MP)24-Aug-11 36
  37. 37. SWOT – Solar Power Strength Weakness Cause Effect Cause Effect India is densely populated and has This is especially favorable for off grid Very high Capital costs – almost 5 times This is prohibitively expensive, high solar insolation systems that of thermal even with subsidies SPV manufacturing base exists in As the PV industry matures, the prices of Most development in India (97%) is off The off grid systems are too small India PV arrays may drop grid systems – like solar lights, pumps, to be attractive rooftop systems SPV has a lot of supporting industries Can create 100,000 jobs by 2020 Most incentives are geared towards This causes most cells to be in the value chain (MNRE) – added incentive manufacture of cells exported out EC predicts price of PV CSP – which turns out to be cheaper, is electricity could drop by 80% by not well developed so far 2030 Opportunities Threats Cause Effect Cause Effect Semiconductor Policy 2007 This should encourage the entire SPV Cost reduction of PV arrays may occur cluster of industries slower than expected Mini grids - like the one in Sundarbans Saves cost that would have been New technologies like highly efficient incurred in drawing lines over very wide fuel cells (Bloom) could achieve cost rivers and T&D losses reduction faster than expected National Solar Mission 2009 20 GW of solar power by 2020  solar‐powered equipment and  applications mandatory in all government  buildings 20 million square meter solar thermal  collectors in the country by 202224-Aug-11 37
  38. 38. Geographic Spread The Major States where Solar power has developed are 1. Rajasthan 2. Gujarat Capacity Utilization Factor (CUF) of 19% per annum for PV and 25% for CSP is achievable at few places in States of Rajasthan and Gujarat Average is 17% and 23% respectively24-Aug-11 38
  39. 39. Grid Connectivity Off Grid  On Grid 98% of all present solar installations  Policy focus is here‐ 2000 MW of Solar  Single units Power to be added Rooftop heating or Solar Cells for homes   Multiple connected units etc  CSP or PV
  40. 40. Financing for Solar PowerIREDA Eligible categories of beneficiaries All categories of users including intermediaries and commercial organizations 7% (commercial borrowers who can claim depreciation benefits) 5% (individuals and other organizations) Financial intermediaries who borrow funds from IREDA for on – lending at 5% or 7% rate of interest will be charged an interest rate of 2.5% or 4.5% respectively by IREDA. Such intermediaries will not be able Rate of Interest to claim depreciation benefit and the on-lending arrangement will not be treated as a lease arrangement. Loan period 3 Yrs Moratorium 1 Year Amount of loan 80% of the cost of the project Upper Limits for a loan No Limit Service Charges 1% of the loan disbursed All types of SPV Systems except solar pumps. Loans will not be provided at subsidized rates for systems that are available with capital subsidy. With the exception of solar generators for which both subsidies System Covered and soft loans will be available. Only those SPV systems and power plants, which confirm to the MNES specifications & guidelines for 2001 – 02 or 2002 – 03 programmes and have obtained test certificates form SEC / Other Authorized Eligible Suppliers Test Centers will be eligible for supply and other benefits under this schemeOthers Power Finance Corp - offers a product specifically structured to the Solar Power sector 1-5 MW, MNRE approved Term Loan covering 70% of project cost http://www.pfc.gov.in/solar_pv_power_plant_policy.pdf PNB – has separate guidelines for Solar. They finance most Solar equipment, from Solar cookers to PV arrays, mostly appliances Market Size INR 4800 cr EAI Solar PV Report http://ireda.in/spv_systemsFaq.asp?value=1
  41. 41. 1.3 Bio Mass
  42. 42. Introduction Biomass energy is a generic term to describe energy in the form of heat,  electricity, liquid and gaseous fuels extracted from agricultural and forest  residues, other organic wastes, and specifically grown crops.  Biomass contributes 14% of the world energy and 38% of  the energy in developing countries Conversion of biomass waste into useable fuel 1. Gasification 2. Pyrolysis 3. Digestion 4. Fermentation 5. Solid Fuel Combustion http://www.forseo.eu/fileadmin/media/forseo/docs/Scoping_Study.pdf
  43. 43. Indian Scenario  There is potential of generating 2500 MW of power from urban,  municipal and industrial  wastes in large cities, besides metros in next 2‐3 years to partly meet energy shortages  India is expected to add 1,700 MW biomass‐based power capacity (including cogeneration  from bagasse‐fired plants) during the 11th Plan period  A National Programme on Biomass Power/Cogeneration is implemented which focuses on  biomass‐based power generation; cogeneration; research and development; and biomass  resources assessment ASSOCHAM - http://www.assocham.org/prels/shownews.php?id=1560 (Woods and Hall, 1994). http://www.projectsmonitor.com/detailnews.asp?newsid=1504924-Aug-11 43
  44. 44. Biomass Power Series1,   Installed, 50,  0%Capital Costs Rs. 7cr per MWGeneration Cost Rs. 4 per KWh Series1,  Remaining ,  16950, 100% Agri Forest Residues Sate wise distribution of Bio Mass Power -2008 Series1,  Installed ,  1000, 20% Series1,  Remaining, 4000,  80% Processing Residues BIO Mass Power (figures in MW)24-Aug-11 44

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