A Report on Renewable Energy Conference    (Explore and Discover Opportunities in India’s Renewable Sector)           Taj ...
Acknowledgement       With a sense of gratitude, I would like toacknowledge the support of Mr. Shrikar Dole,Regional Manag...
RENEWABLE ENERGY: DRIVING CONCERNSTo shift to renewable energy resources is need of hour. Global warming is no longer a to...
Main Concerns while setting up a plant in India are shown below:                                  India-Set up a Clean Ene...
1. Inception of idea:       India has huge potential of renewable energy sources. As per Ministry of New        and Renew...
3. Finance:          Investors and lenders always look for strong balance sheet and cash flow           statements seekin...
 Through “Corporate Social Responsibility” known as CSR, activities can be           done so as to help landowners unders...
Conclusion:           Indian government has taken a lot of steps to promote green energy on push based           mechanism...
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Report on renewable energy resources

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With the roaring conventional fuel scarcity and environmental problems all over the world, a shift towards clean resources is need of hour now.

This report summarizes, present opportunities and challenges, for a new company entering the renewable market in India.

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Transcript of "Report on renewable energy resources"

  1. 1. A Report on Renewable Energy Conference (Explore and Discover Opportunities in India’s Renewable Sector) Taj Mahal Palace, Mumbai, India, 25-26 September 2012 PAWAN SHARMA (pgcim12.pawans@spjimr.org) MBA INTERNATIONAL MANAGEMENT SP JAIN INSTITUTE OF MANAGEMENT AND RESEARCH
  2. 2. Acknowledgement With a sense of gratitude, I would like toacknowledge the support of Mr. Shrikar Dole,Regional Manager, European Business andTechnology Centre Mumbai who gave me thisopportunity to be the part of the knowledgeableconference. I would also like to thank Mr. RajeshParab for his valuable support.
  3. 3. RENEWABLE ENERGY: DRIVING CONCERNSTo shift to renewable energy resources is need of hour. Global warming is no longer a topicunder discussion in fact it has become the most debatable environmental issue of 21stcentury. The concept of depletion and exhaustion of fossil fuel resources is a fundamentalquestion for the future extraction of coal and oil. To retain these resources, is also veryimportant.Although still there are challenges before the whole world like efficient, reliable and low costtechnologies to utilise tidal, geothermal resources. On the same ground, German solar powerplants produced a world record 22 GWs1 of electricity per hour - equal to 20 nuclear powerstations at full capacity - through the midday hours. In the similar way whole world is ready to set andbreak records in the sector. So, on the basis of feasibility study to choose the most suitablealternative fuels according to energy resources in each country, new projects are coming up.Considering the potential of India in this field, there exist huge opportunity to invest.EBTC, an organisation protecting the interest of European companies and guiding Europeanbusiness in India, organised this conference on Renewable energy sector including policy,regulation, and technology and finance structure in India. This was valuable effort to givebusiness market insight to European delegates to enter in India. A few concerns and positiveopportunities, European business leaders may meet while entering in India are as follows. 1 http://www.reuters.com/article/2012/05/26/us-climate-germany-solar-idUSBRE84P0FI20120526
  4. 4. Main Concerns while setting up a plant in India are shown below: India-Set up a Clean Energy plant Inception of idea (Driving Parameters: Why to Invest??) Huge potential Huge Demand-Generation gap Need of hour: Shift to Renewable Energy Resources Environmental Issues: Global Warming Retain Coal and Oil Reserves Technology selection Life of plant: Sustainable Technology Technology: Promoters to convince Investors Technology: Efficient and Innovative Finance Debt: Strong Balance sheet and Cash flow Statement Technology: Sustainable for life of the Plant Power Purchase agreements Evacuation Infrastructure Erection and Commissioning Legal Activities: Clearances and Permits Practical Issues on ground Land Acquisition Health, Safety and Environmental Issues:Safe Erection practices Commercial Operation Certain power demand and payments Skilled Man-power for plant operation Debt Service structure: Payment
  5. 5. 1. Inception of idea:  India has huge potential of renewable energy sources. As per Ministry of New and Renewable Energy2 potential and installed capacity of India is as follows: CAPACITY IN MW TYPE POTENTIAL INSTALLED WIND 49130 17876 SOLAR 20000 1137 BIO 18000 4021 SMALL HYDRO 15380 3421 GEOTHERMAL 10000 There is focus on Wind and Solar power practices, but plant load factor for these technologies is 20-30 percent only. So focus should shift towards Geo- thermal energy resources also, as PLF will be very high in this case. The GSI (Geological Survey of India) has identified 350 geothermal energy locations in the country. Hybrid technologies like solar-biomass, wind-solar should also be promoted to achieve a high plant load factor. Technologies are available, just insight and investment is suggested.  The production and consumption gap in India is very high. Total production in India has reached to 206,526 MW. In December 2011, over 300 million Indian citizens had no access to electricity. Over one third of Indias rural population lacked electricity, as did 6% of the urban population. So there is huge Demand-supply gap. One of the reasons is the transmission loss incurred.  Conventional technologies come up with a lot of environmental wastes and to retain our coal and oil reserves is the need of hour. So this is the right time to click the renewable energy sector.  Government should harmonize policies across all states so that all potential sites in different states are utilized.2. Technology Selection:  New technologies like floating solar panels are introduced in the market; so, much of land is not required.  Rooftop solar panels can be utilised in well planned cities like Chandigarh, to set up an example and then thrive through all cities and villages.  Gujarat government has planned for rooftop panels for Gandhinagar.  These Technologies must sustain for full life of the plants.  These technologies should be selected considering environmental issues. After 25 years when the panels will be disposed, electronic waste like crystalline silicon should not harm marine life when used as floating solar panels and land.  Promoters should back the technology to convince investors and lenders. 2 http://www.mnre.gov.in/
  6. 6. 3. Finance:  Investors and lenders always look for strong balance sheet and cash flow statements seeking confidence.  Seeking confidence in the project investors and lenders look for technology that is sustainable for the expected life of the plant and backed by the promoters.  Power purchase agreements are important to ensure revenue generation to pay back the debt. But in case of renewable energy resources where capacity of plant is not that high and power generation is vulnerable to weather conditions, it is not easy to follow PPA’s as they can result huge penalties.  So Government should come up with the policies to promote hybrid technology based power plants like solar-wind, solar-biomass, wind- biomass etc. This will help to improve the plant load factor to improve and PPA’s can also be followed with certain power generation capacity.  Under RPO stipulation, state distribution companies (discoms) must purchase a certain percentage of power from renewable energy resources. Government of India must enforce discoms to implement RPO stipulation.  Government should increase budget to strengthen distribution infrastructure to achieve free-wheeling of power between states and better evacuation and distribution. This will lead to build confidence in investors and lenders about the certainty of revenue generation and collection out of the power project.4. Erection and Commissioning Any foreign investor or company will look for the on ground, practical problems associated with the setting up the plant.  Legal Clearances: These clearances are must to set up a plant in any area of the world. One can always find out a particular set of regulations to follow and steps to get all the clearances. But this becomes a problem when many players in the market come in and because of the system takes time to approve. So to promote these projects government should focus to speed up the process of clearances and approvals.  Land acquisition: Landowners are always reluctant to give their land at first. But through good compensation and Rehabilitation scheme they are convinced. Sometimes help of Police and Local or State Administration is also taken to resolve these issues. So this is also not a big problem. Government should support at times to speed up the land acquisition or can create a pool of land for particular Renewable energy power projects to promote it.
  7. 7.  Through “Corporate Social Responsibility” known as CSR, activities can be done so as to help landowners understand that how these kinds of projects will help developing them in the future. Under CSR activities unskilled people can be trained to work in the plant. This way a message with positive harmony is passed among them.  Safe erection practices are most important issue. To ensure safety, health and environmental issues a particular HSE department is deployed. Any breach in safe practice may cause casualty of any manpower which may lead to riot kind of situation.5. Commercial Operation and Evacuation of Power:  To ascertain power demand a power purchased agreement is required. As discussed earlier, Power purchase agreements are important to ensure revenue generation to pay back the debt. But in case of renewable energy resources where capacity of plant is not that high and power generation is vulnerable to weather conditions, it is not easy to follow PPA’s as they can result huge penalties.  Under RPO stipulation, state distribution companies (discoms) must purchase a certain percentage of power from renewable energy resources. Government of India must enforce discoms to implement RPO stipulation.  Government should increase budget to strengthen distribution infrastructure to achieve free-wheeling of power between states and better evacuation and distribution. This will lead to build confidence in investors and lenders about the certainty of revenue generation and collection of the power project.  Government should focus to strengthen infrastructure. For example, Tamilnadu is having huge capacity and potential but no evacuation infrastructure to other states. Government should also focus on micro grids and off grid systems.  Training of skilled man-power to run the plant based on new technology is also required. So, Government better increase the budget towards clean energy projects rather subsidising crude oil. To support biomass based power generation, government should direct Municipal corporations to maintain a proper supply chain arrangement or promote algae production for sustainable supply of raw material to plants to attract investors for Biomass based energy. This model is working very well in Europe. Push based mechanism to shift towards renewable energy seems to be over, now government policies seem to be working on pull based. There are generation based incentives available in India but government should also support in plant set-up issues i.e. support in land acquisition process while setting up the plant.
  8. 8. Conclusion: Indian government has taken a lot of steps to promote green energy on push based mechanism and pull based mechanism. Achievements of Indian Government till 31/08/2012 are shown in the table3 below. A lot more private investment is invited to achieve total potential of 103,510 MW from renewable energy resources. New & Renewable Energy Cumulative deployment of various Renewable Energy Systems/ Devices in the country as on 31/08/2012Renewable Energy Programme/ Systems Target Deployment during Total Cumulative for Deployment achievement up 2012-13 to 31.08.2012 August, 2012 in 2012-13I. POWER FROM RENEWABLES: A. GRID-INTERACTIVE POWER (CAPACITIES IN MW) Wind Power 2500 92.1 614.5 17967.15Small Hydro Power 350 12.56 38.76 3434.07Biomass Power 105 17.5 59.5 1209.6Bagasse Cogeneration 350 30 124.5 2109.73Waste to Power -Urban - 4 93.68-Industrial 20 - - -Solar Power (SPV) 800 3.5 102.88 1044.16Total 4125 155.66 944.14 25858.39 B. OFF-GRID/ CAPTIVE POWER (CAPACITIES IN MWEQ)Waste to Energy -Urban 20 - 4.59. 106.34-IndustrialBiomass(non-bagasse) Cogeneration 60 2.25 15.9 398.4Biomass Gasifiers -Rural- 1.5 - 0.128 16.248Industrial 10 0.86 3.56 137.65Aero-Genrators/Hybrid systems 0.5 - 0.1 1.74SPV Systems (>1kW) 30 - 11.4 96.61Water mills/micro hydel 2.00(500 (33 nos) (68 nos) 2121 Nos. Nos.)Total 126 3.11 35.68 756.99II. REMOTE VILLAGE ELECTRIFICATION No. of Remote Village/Hamlets provided - - - - with RE SystemsIII. OTHER RENEWABLE ENERGY SYSTEMS Family Biogas Plants (No. in lakhs) 1.25 - - 45.45Solar Water Heating - Coll. Areas (Million 0.6 0.1 0.37 5.83 m2) 3 http://www.mnre.gov.in/

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