CLEANTECH
HANDBOOK – INDIA
CLEANTECH
FINLAND
Content
1	

INTRODUCTION	

4

	

1.1	 Preface	

5	

	

1.2	 Executive summary	

5

	

1.3	 Purpose of the report	

5	

	

...
Introduction

CLEANTECH HANDBOOK – INDIA

1.1	 Preface
Climate change has become a formidable
challenge that needs to be a...
Introduction

CLEANTECH HANDBOOK – INDIA

of several growth opportunities. The analysis
across growth sectors, combined wi...
Illustration of the Administrative Set Up

CLEANTECH HANDBOOK – INDIA

India is highly fragmented and complex. Home
to man...
Illustration of the Administrative Set Up

CLEANTECH HANDBOOK – INDIA

Cleantech – Key ministries in India

Ministry

Mini...
Illustration of the Administrative Set Up

CLEANTECH HANDBOOK – INDIA

Cleantech – Governmental programmes in India

Progr...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

3.1	 Renewable energy
Rene...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

Solar PV
Energy storage
Im...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

Waste to Energy

Groups an...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

Table 3: Institutional Fra...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

Table 5: Opportunity Snaps...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

structures to encourage th...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

Conclusions

Wind Energy
F...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

Drivers and challenges

Bi...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

3.1.4

Waste to energy

Ba...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

Conclusion

Waste to Energ...
Emerging Cleantech Sectors and Opportunities for Finnish Companies

CLEANTECH HANDBOOK – INDIA

India‘s unique proposition...
Energy Efficiency

CLEANTECH HANDBOOK – INDIA

3.2

Background

The gap between supply and demand of energy
is continuousl...
Energy Efficiency

CLEANTECH HANDBOOK – INDIA

India‘s unique proposition
•	

Demand Management: Demand-side
management ha...
Energy Efficiency

CLEANTECH HANDBOOK – INDIA

Table 1: Opportunity Snapshot for Finnish Companies
Description

India’s en...
Water and Waste Water

CLEANTECH HANDBOOK – INDIA

3.3

Background

India has about 3 per cent of water resources and 16
p...
Water and Waste Water

CLEANTECH HANDBOOK – INDIA

•	

National Action Plan on Climate Change –
National Water Mission
»» ...
Water and Waste Water

CLEANTECH HANDBOOK – INDIA

Table 2: List of Key Organisations in India
Research Institute/NGO

Mai...
Urban Design and Smart Cities

CLEANTECH HANDBOOK – INDIA

3.4

Background

Indian urban agglomeration needs an efficient
...
Urban Design and Smart Cities

CLEANTECH HANDBOOK – INDIA

Drivers and challenges

Urban Design

Drivers

Challenges

Huge...
Waste Management

CLEANTECH HANDBOOK – INDIA

3.5

Background

Rapid economic growth is leading to urbanisation
and indust...
Waste Management

CLEANTECH HANDBOOK – INDIA

»» Duty-free import of renewable energy
equipment

»» Exemptions from electr...
Green Buildings

CLEANTECH HANDBOOK – INDIA

3.6

Background

There is a burgeoning need of housing in
the urban areas and...
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
Cleantech_Handbook_India_Team_Finland_13_jan 2014
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Urbanization, climate change and diminishing natural resources drive the need for cleantech investments in India. Cleantech industries are, therefore, key to the future growth generated in the country, which provides a great opportunity for Finnish companies.

With this in mind, Team Finland released Cleantech Handbook – India that uncovers the cleantech growth areas and explains how the key industries will develop in India in the coming years. From the handbook companies get vital information on not only where they should focus and how to maximize the value from emerging cleantech industries but also guidance on technology deployment. The handbook is compiled by Shriya Ramachandran, Cleantech Finland’s Marketing Communications Manager for India, with the help of Ashish Koltewar, Country Representative Finpro Mumbai, and Team Finland advisor Ulf Österberg.

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Cleantech_Handbook_India_Team_Finland_13_jan 2014

  1. 1. CLEANTECH HANDBOOK – INDIA CLEANTECH FINLAND
  2. 2. Content 1 INTRODUCTION 4 1.1 Preface 5 1.2 Executive summary 5 1.3 Purpose of the report 5 1.4 Background 6 1.5 Emerging trends and growth drivers 6 8 2 ILLUSTRATION OF THE ADMINISTRATIVE SET UP 2.1 Institutional set up 2.2 Cleantech – Key Ministries in India 2.3 Cleantech – Governmental programmes in India 12 3 EMERGING CLEANTECH SECTORS AND OPPORTUNITIES FOR FINNISH COMPANIES 14 3.1 RENEWABLE ENERGY 15 9 10 20 3.1.2 Wind 23 3.1.3 Bioenergy 27 CLEANTECH HANDBOOK – INDIA 3.1.1 Solar 3.1.4 Waste to energy 30 3.1.5 33 Small hydro 3.2 ENERGY EFFICIENCY 36 3.3 WATER AND WASTE WATER 42 3.4 URBAN DESIGN AND SMART CITIES 48 3.5 WASTE MANAGEMENT 52 3.6 GREEN BUILDINGS 56 4 FINANCIAL POSSIBILITIES 60 4.1 International funding 61 4.2 India 64 4.3 Finland 69 5 MAPPING THE CHANNEL OF SETTING UP BUSINESS IN INDIA 84 5.1 Cultural, social and geographical trends apart from market trends 85 5.2 Doing business in India 85 5.3 Things to keep in mind 85 5.4 Different avenues for market entry 85 6 ROLE OF COMMUNICATION FOR CLEANTECH IN INDIA 86 7 TEAM FINLAND IN INDIA 90 7.1 Introduction 91 7.2 Indo-Finnish Joint Working Group on Clean Technologies and Waste Management under the Bilateral Joint Commission 92 8 KEY CLEANTECH INDUSTRY CONSORTIUMS AND ORGANISATIONS 94 9 OTHER CLEANTECH ORGANISATIONS IN INDIA 98 REFERENCES 100 ABBREVIATIONS 104 All figure are in Euros (1 USD = 0.73 Euro)
  3. 3. Introduction CLEANTECH HANDBOOK – INDIA 1.1 Preface Climate change has become a formidable challenge that needs to be addressed immediately and effectively. The responsibility lies heavily on the shoulders of the governments, making every policy in this area necessary and crucial. Many governments however dither to take significant actions due to the huge costs and complexity related to solving these issues. INTRODUCTION Finland has been a frontrunner in developing technologies within the cleantech sector for over a decade now. Finland’s positive image on environmental issues and as a high-tech hotspot helps in promoting exports of environmental expertise and the growth of the sector. “Finnish cleantech expertise is in high demand internationally, and Finnish companies have been quick to utilise the market potential. There has also been strong governmental support to boost cleantech growth,” says Mari Pantsar-Kallio, Strategy Director for the Cleantech strategy programme at the Finnish Ministry of Employment and the Economy. In recent years, cleantech has been one of the fastest-growing business sectors in Finland with an annual growth of 15 per cent in 2012. Combined turnover for cleantech business was EUR 24.6 billion and annual growth 15 per cent, according to a survey by Cleantech Finland. Ministry of Employment and the Economy, Government of Finland has devised a strategic programme to increase turnover in the cleantech sector to EUR 50 billion and to create 50,000 new jobs by 2020. Finland is home to some of the world’s leading companies and research institutions within the area of onshore and offshore wind, green buildings, water sector, bio-energy and maritime cleantech. Finland also has strong competencies in some niche areas of the smart grid and waste management industries. Consequently, Finland has actually managed to decouple the otherwise strong linkage between growth and energy consumption. The latest targets from the Finnish Government build on the long history of green ambitions in Finland. The Government adopted the Foresight Report on Long-term Climate and Energy Policy in October 2009. Setting a target to 4 Cleantech Handbook – India reduce Finland’s greenhouse gas emissions by at least 80 per cent from the 1990 level by 2050 as a part of an international effort, the report marks out the road to a low-carbon Finland in 2050. For these reasons it is not very surprising that Finland has initiated the first market analysis of the cleantech sector in emerging India. By making this report, the ambition is to help communicate concrete opportunities to companies of all sizes, which can benefit their plans of expansion and further strengthen their business strategies in the Indian market. Additionally, this report shows that if Finnish organisations are to take full advantage of the potentials in the cleantech sector in India, they not only require knowledge on these opportunities but also require greater collaboration with Indian counterparts. 1.2 Executive summary The future of cleantech is changing in India. Macro developments such as urbanisation, rapid growth, climate change, and depletion of resources continues to drive the need for investments in clean technologies. At the same time, promising industries are suddenly diminishing and new clean industries are coming onboard to drive the future growth for clean technologies. This report will endeavour to uncover the areas for cleantech growth in the near future in India. It will explain how the key cleantech industries will develop over the coming years. This would help not only to understand where companies should focus and how they should react in order to maximise the value from the industries, but also guide decisions related to new technology deployment. 1.3 Purpose of the report The report endeavours to capture the Indian cleantech market as a whole. The focus is to understand developments in the market, where companies should concentrate their efforts, key underlying drivers in the industries and mapping financial tools available to boost businesses. Additionally, gathering of knowledge in each industry and market has enabled the creation Cleantech Handbook – India 5
  4. 4. Introduction CLEANTECH HANDBOOK – INDIA of several growth opportunities. The analysis across growth sectors, combined with macro developments, has given unique insights into how the dynamics of the markets evolve and what mechanisms and traits are necessary from a general perspective to capture the future growth. 1.4 Background India represents a key market for clean technology companies as it is investing billions in this sector. The objective of the Indian Government is to foster a second Green Revolution. The Indian environment market is estimated to be growing at 9 per cent per annum. The US and Western European countries are the leading source of imports of environmental technologies into India. Foreign Direct Investment (FDI) in environment equipment and services is allowed under the automatic route with up to 100 per cent foreign equity holding. Thus, the Indian market offers strong business prospects for foreign investors. India’s growing economy and surging demand for clean power to strengthen energy security and reduce pollution, as well as ongoing sector reforms, is making India one of the most attractive destinations in the world for environmentallyfriendly investments, as per an ADB report. adopting a pro-environment stance in all its development strategies. Depletion of Natural Resources: With coal reserves depleting or more available in dense forest locations where current environmental laws forbid mining, and with the depleting availability of water for man’s use, there is immense pressure on natural resources as the human population and urbanisation increases. There is an urgent need to protect the available resources. Adopting Newer & Cleaner Technologies: The adoption of newer and cleaner technologies will help India in leapfrogging into the sustainable growth pathway as the Indian economy grows at an unprecedented rate. Man-Environment Conflict: There is an increasing importance given to the voice of the local communities that reside on or near the natural resources. The development of industry in these regions has led to conflict between the need for development to meet the power, water and other needs of a growing urban population, versus the need to protect the environmental resources that rightfully belong to these local communities. 1.5 Emerging trends and growth drivers Fourth largest economy in the world when adjusted for purchasing power parity • Projected GDP growth (2013-2014): 5.5 per cent (RBI) • Euro 0.72 trillion projected infrastructure investment in next five years • Large domestic market: »» 560 million consumers in 20-49 age group expected by 2015 »» Fifth largest consumer market by 2025 »» Increased disposable incomes & changing lifestyles • Human capital: »» Third largest pool of scientific & technical manpower »» 2,00,000 engineering graduates annually »» Huge manpower base (1.2 billion people) »» Over 500 universities (20,000 colleges) »» Large English speaking population Strong Economic Growth: The Indian economy is growing strongly at 4-5 per cent plus annually and is one of the fastest growing economies in the developing world today. Governmental Regulations: India is becoming more active today with an emphasis on implementation of regulations. With a more active media and awareness of people towards environment, India is driven towards Strong fundamentals driving India’s economy • Global Climate Negotiations: The current global negotiations on climate change have put pressure on rapidly developing economies like India to adopt green technologies and not repeat the unsustainable mistakes of the past. 6 Cleantech Handbook – India Cleantech Handbook – India 7
  5. 5. Illustration of the Administrative Set Up CLEANTECH HANDBOOK – INDIA India is highly fragmented and complex. Home to many distinct cultures and 22 languages recognised by the country’s constitution, it is made up of 28 states and seven union territories marked by economic diversity. Regulatory environments and governance standards differ across states and territories, and power is increasingly being devolved to the state level. The following section will briefly introduce the administrative set up of the Indian Government and the roles of different ministries to develop the cleantech sector. Institutional set up ILLUSTRATION OF THE ADMINISTRATIVE SET UP 8 Cleantech Handbook – India Cleantech Handbook – India 9
  6. 6. Illustration of the Administrative Set Up CLEANTECH HANDBOOK – INDIA Cleantech – Key ministries in India Ministry Ministry Industry Sector About Responsibilities Programmes Web Address New and Renewable Energy Renewable energy Develops and spreads out new and renewable energy solutions to supplement the energy requirements of the country Facilitate research, design, development, manufacture and deployment of new and renewable energy systems/ devices for transportation, portable and stationary applications in rural, urban, industrial and commercial sectors 1.Gridinteractive renewable power projects Responsible for development, conservation and management of water as a national resource and overall national perspective of water planning and coordination National Water Framework Law Plays a role in organising, coordinating and promoting S&T activities in the country Promoting and supporting new areas of technology integration including cleantech Climate Change Programme, Water Technology and Solar Energy Research Initiative Programme Formulating policies, supporting programmes, monitoring programmes so far as they relate to urban development concerning all the issues in the country JNNURM, National Mission of Sustainable Habitat moud.gov. in/ Responsibilities Programmes Web Address Environment and Forests Environment, climate change and forestry Planning, promotion, coordination and overseeing the implementation of India’s environmental and forestry policies and programmes Implementation of policies and programmes relating to conservation of the country’s natural resources The Sustainable Land and Ecosystem Management (SLEM) Programme; envfor.nic. in/ www.dst. gov.in/ Formulation and administration of the rules and regulations and laws relating to the housing and urban development About www.mnre. gov.in/ All matters both general and technical relating to the development and management of water resources in the country including water use efficiency, com Industry Sector Water Resources Science and Technology Urban Development 10 Water management Science and Technology (S&T) Urban design, sustainable urban frastructure Cleantech Handbook – India 2. Programme on Battery Operated Vehicles, MNRE Climate Change Programme Fund Petroleum & Natural Gas Petroleum industry Exploration and production of oil and natural gas, their refining, distribution and marketing, import, export, and conservation of petroleum products and Liquified Natural Gas Oil refineries, including Lube plants, exploration and exploitation of petroleum resources, including natural gas Strategic Crude Oil Storage; Ethanol Blended Petrol Programme petroleum. nic.in/ Power Energy efficiency Perspective planning, policy formulation in regards to thermal, hydro power generation, transmission and distribution Administration of the Electricity Act, 2003, the Energy Conservation Act, 2001 1. National Mission for Enhanced Energy Efficiency – NMEEE www. powermin. nic.in/ wrmin.nic. in/ National Water Policy 2. Energy Savings Certificate Trading 3. Carbon Finance – Energy Efficiency Earth Sciences Environmental protection and climate change Provide services in forecasting the monsoons and other climate parameters, ocean state, earthquakes, tsunamis and other phenomena related to earth systems The main responsibility is to look after Atmospheric Sciences, Ocean Science and Technology and Seismology in an integrated manner 1. Marine Living Resource dod.nic.in/ 2. Coastal Zone and Island 3. Ocean Observation and Infromation Services Cleantech Handbook – India 11
  7. 7. Illustration of the Administrative Set Up CLEANTECH HANDBOOK – INDIA Cleantech – Governmental programmes in India Programmes Programmes Key Stakeholder/s Key Objectives Technology Focus National Action Plan on Climate Change (NAPCC) Prime Minister’s Council on Climate Change National Solar Mission Renewable energy technology development Ministry of Environment and Forests National Mission for Enhanced Energy Efficiency National Mission on Sustainable Habitat National Water Mission Energy efficiency technology integration in industries, buildings, urban planning National Mission for Sustaining the Himalayan Ecosystem Waste and water management and recycling National Mission for a “Green India” Electric vehicles National Mission on Strategic Knowledge for Climate Change National Bio-energy Mission Prime Minister’s Council on Climate Change Promote renewable sources of energy with a high focus on solar energy Ministry of Environment and Forests Promote energy efficiency and efficient use of natural resources including water Afforestation across Himalayan region and other parts of India Access to funds for private sector for developing environmentalfriendly technologies Energy Conservation Act Bureau of Energy Efficiency, Ministry of Power Reduce energy consumption in different sectors of the economy Promote energy efficient equipment Increase energy awareness Renewable Energy Policy Ministry of New and Renewable Energy Increase share of new and renewable energy in the fuel mix Increase per capita energy consumption to global average Provide electricity to rural and remote areas through renewable sources Reduce dependence on energy imports and promote energy security through a diverse and sustainable fuel mix 12 Cleantech Handbook – India Key Objectives Technology Focus Biodiesel Purchase Policy Ministry of Rural Development Reduce environmental impact of the transportation sector Biodiesel technology Ethanol Blending of Gasoline Ministry of Petroleum and Natural Gas Reduce oil imports and promote energy security Encourage production of Jatropha Pollution control National Mission for Sustainable Agriculture Rural Electrification Policy (Renewable Energy) Key Stakeholder/s Creating affordable solar power systems Reduce environmental impact of the transportation sector Automotive fuel economy Reduce oil imports and promote energy security Encourage indigenous energy sources Energy Conservation Building Code Bureau of Energy Efficiency Bachat Lamp Yojana Ministry of Power Reduce energy consumption in buildings sector Green construction technologies Promote energy efficiency in building construction and management Direct reduction of Co2 emissions through efficient equipment Energy efficient CFLs and lighting devices Reduction in energy demand Producing power from waste Geospatial technology for precision agriculture Improve automotive fuel economy Energy saving technologies in appliances, household electricals and other industrial machinery Energy efficient building construction Indigenous design, development and manufacture of renewable energy systems Focus on solar, wind, hydel, biomass, waste, fuel cells, hydrogen, fuel cells, geothermal and tidal Cleantech Handbook – India 13
  8. 8. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA 3.1 Renewable energy Renewable energy has enormous potential and is becoming an increasingly significant part of India’s energy mix. With vast potential, renewable energy is no longer seen merely as an alternate energy source to conventional energy, but as a critical element in the pursuit of key policy objectives. It enhances India’s energy security by diversifying the country’s energy mix and reducing dependence on imported fossil fuels. Renewable power represents about 12 per cent of the total installed electricity generation capacity in India. Investment in renewable energy was Euro 4.96 billion in 2012. EMERGING CLEANTECH SECTORS AND OPPORTUNITIES FOR FINNISH COMPANIES 14 Cleantech Handbook – India Government incentives Some of the other key incentives provided by the Government of India for the renewable energy industry are: • Feed-in-tariffs for both wind and solar energy • Up to 80 per cent accelerated depreciation for renewable energy investments • Preferential tax rate of 15 per cent, instead of the standard 30 per cent • Exemption from central sales tax and customs duty concessions on soft loans for the import of material, components, and equipment used in renewable energy projects • Establishment of the National Solar Mission (NSM) which aims to deploy 20 GW of solar energy by 2020 • Soft loans for setting up renewable energy enterprises • Tax holiday for 10 years for biomass power projects Investments The recent announcement of the Prime Minister of India during the Clean Energy Ministerial meeting in April 2013 in New Delhi to double the renewable energy in the next five years would attract an investment of over 4,000 MW per annum. Foreign Direct Investment (FDI) The Indian Government allows 100 per cent FDI in the renewable energy sector and has put in place favourable policies to attract foreign companies into the sector. Cleantech Handbook – India 15
  9. 9. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA Solar PV Energy storage Improvements in module technology, including higher density and lighter weight modules Solar Thermal Increased R&D Hybrid power systems Non-grid solar thermal applications Solar building technology applications Solar cooling and solar steam generation systems for industrial process steam applications are emerging opportunities where Finnish technologies can play an important role Outlook Developing renewable energy can help India increase its energy security, reduce adverse impacts on the local environment, lower its carbon intensity, contribute to a more balanced regional development, and realise its aspirations for leadership in high-technology industries. High temperature solar thermal applications Wind Importing the latest technologies with higher capacities (over 1-2 MW systems) Wind machines for low wind regimes Better designed rotor blades, gear boxes, and control systems Small wind machines for decentralised power generation, wind PV hybrid systems, and wind mills for water-pumping applications are also largely untapped markets Small Hydro Power Low head power generation systems High efficiency systems Portable micro-hydro systems Bioenergy R&D Table 1: List of Opportunities for Finnish Companies in RE High pressure boilers High power gas turbines Solar PV Combined cycle, process systems and equipment Thin film technologies Advanced biomass gasification and combustion technologies Improvements in conversion efficiencies High pressure cogeneration systems, cofiring and blending technologies, and cost-effective handling Grid interactive projects Storage and drying of biomass Joint ventures with global PV manufacturers 16 Cleantech Handbook – India There is a need for small biomass (1-3 MW) in rural areas and larger capacities in cogeneration in sugar mills (bagasse) and pulp and paper factories Cleantech Handbook – India 17
  10. 10. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA Waste to Energy Groups and Individuals Incineration and sanitary landfills Waste collection and segregation Financing build own transfer and build own operate systems Table 2: Renewable Energy Stakeholder Matrix Groups and Individuals How can they help us? How can they block us? What would they want from us? What do we want from them? Research and Development (R&D)/Technical institutions Engage in technology development/ indigenisation efforts Manpower development Misuse of assistance/subsidy Skill development Financial support Product marketing partners Misuse of assistance/subsidy Financial support Providing high quality products How can they block us? What would they want from us? What do we want from them? Concessional financing for RE projects By not financing the RE projects due to high cost Financial support through for instance guarantees Large scale financing RE projects through concessional funds International Financial Institutions Source of low-cost funds Lack of support Developers/ investors (Including foreign) Implementing RE projects and Programmes Availing financial support from the ministry but not implementing projects Supporting particularly offgrid initiatives, and rural electrification efforts by providing debt funds at low-cost Incubating new technologies Equipment manufacturers and technology providers How can they help us? Indian Renewable Energy Development Agency (IREDA) and other financial institutions/ partner bank High rate biomethanation systems State government Regulators (CERC, SERC) Different ministries of Government of India 18 Innovation in business model for inclusive growth Technology innovation Awareness creation among users Promotion of renewable energy programme at the state level through conclusive policies Lack of adequate support for RETs Financial support Lack of appropriate fund allocation Timely release Formulating condusive regulation that will support the RE policy initiative by the ministry Through regulations that have inadequate enforcement measures Cooperation Promotion of renewable energy programme in complementary programmes Lack of adequate support for RETs Convergence of inclusive growth Cleantech Handbook – India Inefficiency in delivery Sectoral interest can block/hamper growth Skill development Facilitating effective implementation of RE projects and initiatives Working together at the time of formulation of policies and regulations Facilitating large scale off-grid applications such as SWH, solar cooking, solar lighting, solar airconditioning, kitchen waste processing, green building and campuses in their establishments Financial support Implementation of projects Conducive policy & regulatory framework Co-creating diligent sustainable business model f Factious NGOs spreading of misinformation Financial support Awareness generation Non-cooperation towards usage of RE devices on account of: Awareness creation Unfair practices Sub-optimal monitoring of project NGOs End Users Spreading awareness Large scale use of RETs and services Lack of awareness High-cost Utility factor Lobbying with government agencies Cost of such devices being made available at the same cost or lower cost than conventional system Increased usage and promotion of RE systems and devices Cleantech Handbook – India 19
  11. 11. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA Table 3: Institutional Framework for Renewable Energy Table 4: JNNSM-Phase-wise Targets and Objectives (Source: Ministry of New and Renewable Energy, RRECL, GEDA) Level Central Government MNRE CERC Centre • Develop national electricity tariff policies which also covers renewable energy • Develops national renewable energy laws • Sets guidelines for feed-in-tariff design for different renewable energy technologies Parameters • Regulates the regional electricity cooperation mechanism • Level • Provide fiscal incentives for promoting renewable energy • Sets technical standards for renewable energy • Conducts resource assessment and support R&D for renewable energy • Promotes effective use of information technology for renewable energy, manages database Phase 3 (2017-22) Scaling up Rapid scaling up • Driving down cost • Scaling up various • Promoting off-grid application • Validated application • Validating social and economic viability • Rolling out business models • Reducing solar power cost to achieve grid tariff parity by 2022 Utility, grid power, including roof top (MW) 1,100 4,000-10,000 20,000 Off-grid installation (MW) 200 1,000 2,000 Solar collections (million sq mt.) 7 15 20 • Regulates interstate open access and third party sales Level State Government State Nodal Agency T A R G E T SERC State • Develop state level renewable energy policies • Conducts resource assessment for various renewable energy sources • Develops feed-in-tariff methodologies • Provides facilitation service to project developers Phase 2 ( 2013-17) Solar deployment • Reviews the programmes to understand their effectiveness and efficiency • Allocates renewable energy projects and progress monitors Phase 1 ( 2010-13) • Determines Renewable Purchase Obligation (RPOs) and enforcement mechanisms Drivers and challenges Drivers Challenges • Creates awareness and promotes renewable energy adoption 3.1.1 Solar Background India is a country that has tremendous solar energy potential. The country has close to 300 sunny days per year and receives an average hourly radiation of 200 MW/sq.km. This translates to a potential of more than 100 GW of solar energy. India’s current installed capacity of 1,044 MW accounts for only 0.5 per cent of its total power generation capacity. 20 Cleantech Handbook – India • Sets regulations on interstate wheeling, open access and third-party sale Government initiatives to develop the sector A major initiative of the Government of India and state governments, the Jawaharlal Nehru National Solar Mission (JNNSM) was launched in January 2010 with the objective of leveraging on the country’s vast solar energy potential by creating a policy and regulatory environment that enables rapid and large-scale capital investment in solar energy. Solar mission incentivises developers by offering them preferential tariffs and making it mandatory for utilities to meet Renewable Purchase Obligations (RPOs). Supply side growth Lowering the cost of manufacture Rising energy needs Over dependence on coal Non-uniform supply across states Falling costs Over dependence on oil imports Closer industry – government cooperation Persistent energy deficit • Facilitates clearances and land acquisitions Demand side growth Heavy subsidies for companies Collaborative goal-driven R&D Heavy government subsidies Huge rural demand Complicated financing infrastructure Inclination for clean technology Abundant sun rays Sporadic consumer awareness Lack of standards India’s unique proposition • Economic Value: The generation of solar electricity mitigates peak energy costs and brings total energy bills down • Geographical Location: India being a tropical country receives adequate solar radiation for 300 days, amounting to 3,000 hours of sunshine equivalent to over 5,000 trillion kWh • Power Shortage: Due to shortage of electricity, power cuts are common throughout India and this has adversely affected the country’s economic growth. Solar energy can fulfil the energy demand with finesse Cleantech Handbook – India 21
  12. 12. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA Table 5: Opportunity Snapshot for Finnish Companies Solar Thermal Description Growth Forecast Solar PV The most common solar thermal applications in India are off-grid and include solar water heating, air heating and cooling, solar cookers, and passive architecture to heat and cool buildings Solar Thermal Some Key Facts • India averages 300 days of sunlight per year, which translates to 100 GW of solar energy The main types of solar PV applications types for India are community lighting systems, lanterns, street lights, fixed home lighting systems and water pumps • Solar PV conversion efficiency currently remains at 15 per cent • In the last decade, the cost of PV has decreased by a factor of 10 in relation to production of components; however, there are still cost barriers throughout the supply chain • The average hourly solar radiation is about 200 MW/sq. km. • For solar CSP and PV together, National Solar Mission attempts to reach an installed capacity of: »» By 2017: 4-10 GW »» • India’s current solar capacity of 1,044 MW, accounts to only 0.5 per cent of its total power generation capacity By 2013: 1-2 GW »» Solar PV By 2020: 20 GW • By coupling country’s national policies with those at the states, Jawaharlal Nehru National Solar Mission aims to install 20 GW of solar power by 2020 • Large areas of the Thar Desert have been set aside for solar power projects, sufficient to generate 700 to 2100 GW Table 6: List of Key Organisations in India • Government is expected to spend Euro 13.76 billion until 2022 • Cost of power generation - and trends in the same over years Research Institute/NGO Mainline of Activity Website • urrent cost of production (after bidding) – Euro 0.14/kWh. This includes OM, C amortised/depreciated capital costs, loan repayment costs, and other expenses such as insurance Solar Energy Centre (SEC) Solar energy technologies www.mnre.gov.in/sec/sec-objective.htm Solar Energy Society of India (SESI) Renewable energy www.sesi.in/ Solar Energy Corporation of India (SECI) Solar energy technology www.mnre.gov.in/centers/seci/ • Costs of production expected of solar PV power plants in the near future: »» »» Financing By 2015 – Euro 0.11/kWh »» Policy Measures By 2012 – Euro 0.14/kWh 2020 – Euro 0.07/KWh Several support schemes are available in the form of generation based incentives capital subsidies, financial support for detailed project report, subsidies for solar thermal technology adoption to increase energy efficiency in buildings. Some states offer rebates on electricity rates for households with solar water heating systems 80 per cent accelerated depreciation, exemption from excise duties, low import tariffs on raw materials and components, soft loans from IREDA and other nationalised banks, capital subsidies and training programmes • The three main financing options for implementing solar PV captive power plants are debt financing, asset financing and corporate financing • IREDA, PFC, commercial banks and financial institutions also offer soft loans, loans with interest rates lower than market interest rates Opportunities • Increased RD • Hybrid power systems • Off-grid solar thermal applications • Thin film technologies, including process technologies, low-cost substrates, large size cell/modules • Solar building technologies • Solar cooling and steam generation systems for industrial processes • Grid-interactive technologies • High temperature solar thermal applications 22 • Technologies to improve conversion efficiency • Energy storage Cleantech Handbook – India Conclusion Solar energy possesses tremendous potential in bridging India’s energy demand-supply gap in the future. Some of the immediate actions to enable growth are efficient implementation of renewable energy certificates, usage of carbon trading as a source of revenue, development of off-grid usage in various applications such as cellular towers and encouraging localised mini grids in areas that lack connectivity today. 3.1.2 Wind Background • Improved solar PV technologies • Improved module technologies including light weight and higher density modules India has long started its journey to become one of the largest wind power producers in the world. India is expected to have 89 gigawatts (GW) of installed wind power capacity by 2020 and attract Euro 11.95 billion annual investment according to India’s Wind Energy Outlook 2012. According to official estimates made by the Ministry of New and Renewable Energy (MNRE), India’s wind power capacity stands at 102,000 MW. India’s total installed capacity today is close to 18,000 MW which is the fifth largest in the world. Government initiatives to promote the sector The growth in the renewable energy market is very crucial for the Indian economic growth. In its 12th Five Year Plan (2012-17), the Indian Government has set a target of adding 18.5GW of renewable energy sources to the generation mix out of which 11GW is the wind estimation and rest from renewable sources like solar 4GW and others 3.5GW. Due to all these considerations, the government has come up with many incentives and subsidy Cleantech Handbook – India 23
  13. 13. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA structures to encourage the growth of wind energy sector in India. • From April 1, 2012, the accelerated depreciation of 35 per cent in the first year has been allowed. Here the allowed normal depreciation is 15 per cent, and additional 20 per cent deposition is allowed for projects in the power sector E xcise duty is exempted in the wind sector • C entre of Wind Energy Technology has been established for institutionalising training, RD, resources assessment and testing, and also for awarding certification to various wind energy products 100 per cent FDI investment is allowed in the field of renewable energy sector • • • U nder the Income Tax Act, Section 80IA, companies are exempted of income tax for the sale of power during the first 10 years • F orest lands are allotted or leased out for developing wind power projects • • • • E xemptions are being offered by the state governments on duty for electricity • 1 3 states allow privileged feed-in tariff on wind energy production • • Discounted customs duty of only 5 per cent is given on some of the wind power machinery components P rovisions have been made for favourable banking, wheeling, and for sales of wind power by the third parties R PS or the Renewable Purchase Specification have already been implemented in six states, which is in accordance to the Electricity Act of 2003 I ndian renewable energy development agency is actively working towards institutionalising the financing in this sector • R EC or the renewable energy certificate has been set up for the purpose of interstate trading Heavy reduction of VAT or value-added tax is being offered by many states, i.e. From 12.5 per cent, it has been reduced to 5.5 per cent • Drivers and challenges Drivers Challenges Aggressive wind energy capacity addition plans for the 12th Five Year Plan (2012-17) Variable output of aggregated wind capacity Re-powering wind farms The challenge of integration Offshore wind installation opportunity The challenge of new grid infrastructure Collaborative goal-driven RD Withdrawal of the AD and GBI schemes Rising energy needs Non-payment to wind energy developers/ generators Inclination for clean technology Non-remunerative increase in tariff Over dependence on oil imports Increase in cross-subsidy charges India‘s unique proposition • Concessional surcharges on cross subsidy are levied for the wind power sales by the third parties • Geographic Location and Wind Potential: India is blessed with 7,517km of coastline and its territorial waters extend up to 12 nautical miles into the sea. It is estimated that with the current level of technology, the ‘onshore’ potential for utilisation of wind energy for electricity generation is of the order of 65,000 MW World Market Share: In 2012, India was the fourth largest wind market in the world, with around 1,700 MW new capacity addition • Government Support and Policies: Several states such as Karnataka, Tamil Nadu and Andhra Pradesh have come up with renewable energy policies • Installed Capacity: Wind Energy holds the major portion of 70 per cent among renewable and continued as the largest supplier of clean energy. Share of wind is 19GW (March 2013) of 27.5GW of India’s RE installed capacity • Wind Energy as Job Generator: Wind energy utilisation creates many more jobs than centralised, non-renewable energy sources Table 7: Opportunity Snapshot for Finnish Companies Wind Energy Description Wind power can be used both on and off-grid to produce electricity, though the intermittent nature of wind could cause difficulty in grid stability. Wind power is one of the most RE technologies with over 74,000 MW installed capacity globally Growth Forecast • According to India wind energy Outlook 2012, wind energy generation capacity in India could more than quadruple to 89GW by 2020 • This will attract investments of over Euro 11.95 billion, create over 179K jobs and offset 131 approximately million tonnes of carbon dioxide emissions • Technology and innovation are swiftly moving wind energy towards grid parity and it won’t be long before it can directly compete with even coal-based power; perhaps even as early as 2015 24 Cleantech Handbook – India Cleantech Handbook – India 25
  14. 14. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA Conclusions Wind Energy Financing • Government incentives include a feed-in-tariff, exemptions from excise duties, and tax exemptions for infrastructure-related projects. Additionally, the states that have created RE portfolio standards have helped accelerate the wind sector. There is a burgeoning interest by investors like Goldman Sachs, Black Stone, IDFC in the private sector • IREDA, PFC, REC commercial banks and financial institutions also offer soft loans, loans with interest rates lower than market interest rates Opportunities • Importing the latest technologies with higher capacities (over 1-2 MW systems) • Wind machines for low wind regimes • Better designed rotor blades, gear boxes, and control systems • Small wind machines for decentralised power generation, wind PV hybrid systems, and wind mills for water-pumping applications are also largely untapped markets 3.1.3 Bioenergy India’s present generation capacity is about 200,000 MW and wind energy could amount to 100,000 MW by 2030 if the right resources (and more importantly, energy policies) are developed. India can develop massive commercial wind farms to harness the strong onshore coastal area and offshore wind to boost the country’s supply of clean renewable energy. But, to tap this vast resource, India must develop and implement smart business models and favourable policies as quickly as possible. Background Bioenergy is one of the most promising alternatives that can help meet all the above needs. It also holds a great potential to meet the rural energy needs of the country. India has formulated and implemented a number of innovative policies and programmes to promote bioenergy technologies. However, according to some preliminary studies, the success rate is marginal compared to the potential available. This limited success is a clear indicator of the need for a serious deployment of bioenergy technologies and expertise on a large scale. • RD for new research into wind energy Some Key Facts • India’s wind energy potential is now considered to be at least double the original estimate of 48.5GW • Wind is expected to continue to be the mainstay of renewable energy in India in the short-term • Capital cost in India is the lowest in the world and India is emerging as the fastest growing supply chain hub with many industries choosing for in-house manufacture of towers, blades, generators, convertors, etc. • GBI scheme has been reintroduced in the Union Budget 2013-14 • With increasing participation of Independent Power Producers (IPPs), the project development model is likely to shift from turnkey to a self-developed one • Delayed payment from distribution companies is impacting long-term planning and financial closure of projects • Lack of enforcement of RPOs might impact long-term growth Table 8: List of Key Organisations in India Research Institute/NGO Main-line of Activity Website Indian Wind Power Association Wind power development www.windpro.org Indian Wind Turbine Manufacturers Association Research and development www.indianwindpower.com Indian Wind Energy Association Wind energy outreach www.inwea.org Centre for Wind Energy Technology (C-WET) Wind energy research www.cwet.tn.nic.in Winrock International India Research on energy and climate change www.winrockindia.org World Institute of Sustainable Energy Knowledge management and consultancy www.wisein.org Government initiatives to develop the sector: 26 Cleantech Handbook – India 1. 2. The Ministry of New and Renewable Energy (MNRE) provides Central Financial Assistance (CFA) in the form of capital subsidy, exempted from custom and excise duty on machinery and financial incentives to the biomass energy projects in India. The government has introduced new programmes and policies to strengthen the growth of this sector like: »» National Policy on Biofuels: Introduced in 2010, the policy encourages the use of alternative fuel to supplement conventional transport fuels (gasoline and diesel for vehicles), and proposes a target of 20 per cent of bioethanol and biodiesel blending by 2017. The government has mandated a 5 per cent ethanol blending rate for domestic oil marketing companies. »» National Bioenergy Mission: Initiated by the Ministry of New and Renewable Energy in association with state governments, public private sectors and other stakeholders to promote ecologically sustainable growth while addressing India’s energy security challenge. It will also constitute a major contribution by India to the global effort to meet the challenges of climate change. Cleantech Handbook – India 27
  15. 15. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA Drivers and challenges Bioenergy Opportunities • For development and import of high pressure boilers, high power gas turbines, combined cycle, process systems and equipment Drivers Challenges Improved technologies inclusion Limited capacity to assess, adopt, adapt and absorb technological options • Advanced biomass gasification and combustion technologies New innovative policies and programmes by the government Perennial availability of biomass • Co-firing and blending technologies Avoids food versus fuel debate Fragile supply chain Rising energy needs Lack of biomass storage and transportation facility GHG mitigation Lack of mechanisation in Indian agriculture sector • High pressure cogeneration system • Cost-effective handling, storage and drying of biomass • Technology for production of ethanol like azeotropic distillation technology, molecular sieve technology, membrane technology Some Key Facts • Biomass-based power can be generated on a distributed basis and short lead times can enable rapid capacity addition • Growth in the sector is likely to be driven by captive biomass and CHP application Over dependence on oil imports • Competitive use of biomass is a constraint in maintaining its assured availability with reasonable cost structure • Feedstock chain management is difficult due to the unorganised nature of the market India‘s unique proposition A biomass energy system has some unique characteristics making it the most attractive renewable option especially for rural areas: • sale of surplus biomass which is otherwise wasted and direct generation of employment in the biomass logistics management system and power plant • Utility Benefits: The key strength of the utility in the development of rural energy access is the presence of resources (manpower and infrastructure) in the rural areas Mainline of Activity Website Petroleum Conservation Research Association National Biofuel Centre Bioenergy research and development www.pcra-biofuels.org/ utt.htm International Crops Research Institute for the Semi-Arid Tropics (ICRIT-SAT) Conducts research into dryland crops, including those that can serve as feedstocks for biofuels www.icrisat.org/ Centre for Indian Bamboo Resource Technology (CIBART) www.cibart.org/ Biomass-based energy generation has significant potential to contribute to India’s growing energy needs. Technology has also significantly advanced and is being made available locally along with a host of financial incentives and policy measures being put into place to accelerate the investment in this sector. Feedstock project development and implementation, technical consultancy and turnkey services on all aspects of bamboo Biodiesel Association of India Industry association for the biodiesel industry www.bdai.org.in • More than 540 million tonnes of crop and plantation residues are produced every year in India which has potential to generate 16,000 MW of grid quality power The Energy and Resources Institute Bioenergy research www.teriin.org Indian Biogas Association Association for the Indian biogas industry www.biogas-india.org/ Table 9: Opportunity Snapshot for Finnish Companies Bioenergy Growth Forecast Table 10: List of Key Organisations in India Research Institute/NGO Generating Additional Rural Income: Farmers can derive huge benefits from biomass-based distributed power generation systems. Direct benefits would result from Description • More than 70 per cent of the country’s population depends upon biomass for its energy needs • In addition, about 5,000 MW of power can be produced, if all 550 sugar mills in the country switch over to modern techniques of cogeneration • The estimated biomass power potential is about 21,000 MW Financing • Government subsidies exemptions from customs and excise duties, income tax holiday up to 10 years, general sales tax: exemption is available in certain states • Bioenergy technologies and projects would be allowed 100 per cent FDI • IREDA, NABARD, SIDBI, REC commercial banks and financial institutions also offer soft loans, loans with interest rates lower than market interest rates • Increased investment flowing from private sector 28 Cleantech Handbook – India Conclusion India has formulated and implemented a number of innovative policies and programmes to promote bioenergy technologies. Despite the operational issues involved, biomass-based plants provide higher returns compared to wind energy. This potential is also reflected in many Independent Power Producers’ strategy to diversify their renewable energy portfolio amongst wind and bioenergy. Going forward, it is expected that modern risk management techniques like forward contracts, better assessment of biomass resources and regulatory support of SERCs by providing competitive and stable preferential tariff will help in better harnessing the bioenergy potential of the country. Cleantech Handbook – India 29
  16. 16. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA 3.1.4 Waste to energy Background financial incentives and other eligibility criteria have been proposed by the MNRE to encourage the participation in waste to energy projects. They are listed herewith: • India’s growing energy deficit is making the central and state governments keen on alternative and renewable energy sources. Waste to energy is one of these, and it is garnering increasing attention from both the central and state governments. The problems caused by solid and liquid wastes can be significantly mitigated through the adoption of environmentfriendly waste to energy technologies that will allow treatment and processing of wastes before their disposal. These measures would reduce the quantity of wastes, generate a substantial quantity of energy from them, and greatly reduce environmental pollution. Urban waste includes municipal solid waste, sewage and fecal sludge, whereas industrial waste could be classified as hazardous industrial waste and nonhazardous industrial waste. Government initiatives to promote the sector MNRE has promoted the national programme for the recovery of energy from industrial and urban wastes. Since this programme seeks to promote setting up of waste to energy plants, various Financial assistance is provided by way of interest subsidy for commercial projects • Financial assistance is provided on the capital cost for demonstration projects that are innovative in terms of generation of power from municipal/industrial wastes • Financial assistance is provided for power generation in STPs • Financial incentives are given to municipal corporations for supplying garbage free of cost at the project site and for providing land • Waste to energy taskforce has been constituted by the Planning Commission to examine the technological aspects of Waste to Energy (WTE) projects started by civic bodies. The aim is to develop a PPP framework model for waste to energy projects Government Incentives: The Government of India already provides significant incentives for waste to energy projects, in the form of capital subsidies and feed-in tariffs. Emerging Opportunities: With distributed waste management and waste to energy becoming important priorities, opportunities exist for companies to provide support services such as turnkey solutions. Financial assistance is given for carrying out studies on waste to energy projects, covering full costs of such studies. Assistance is given in terms of training courses, workshops and seminars and awareness generation • Profitability: If the right technology is employed with optimal processes and all components of waste are used to derive value coupled with government incentives, waste to energy could be a profitable business. in other waste such as sewage waste, industrial waste and hazardous waste. Depending on the technology/route used for energy recovery, products such as charcoal, compost, nutrient rich digestate (a fertilizer) or bio-oil can be obtained. These co-product opportunities will enable the enterprise to expand into these related products, demand for which are increasing all the time. Incentives are given to the state nodal agencies for promotion, coordination and monitoring of such projects • India‘s unique proposition Related Opportunities: Success in municipal solid waste management could lead to opportunities Table 11: Opportunity Snapshot for Finnish Companies Waste to Energy Description The Indian Government considers WTE to be a renewable technology, and the MNRE has developed the National Master Plan for Development of WTE in India. The MNRE lists a number of technologies for energy recovery from urban and industrial wastes that not only reduce the quantity but also improve the quality of waste to meet the required pollution control standards, besides generating a substantial quantity of energy Growth Forecast Potential of generating energy from waste by 2030 as per MNRE Government of India Drivers and Challenges Drivers Challenges Waste output per capita is growing as much as 1.33 per cent per year Waste to energy is a new concept in India 55 million tonnes of municipal solid waste and 38 billion litres of sewage every year in urban India Lack of proven indigenous technology Lucrative incentives offered by the government Cost are high as technologies are still imported Rising energy needs Lack of availability of segregated MSW near the plant site GHG mitigation Lack of financial resources Over dependence on oil imports Lack of government support for land allocation supply of garbage, and evaluation facilities 30 Cleantech Handbook – India 1500 MW from MSW 225 MW from sewage/sludge 1300 MW from industrial waste Cleantech Handbook – India 31
  17. 17. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA Conclusion Waste to Energy Financing • Government support towards concessional loans from IREDA through NCEF and Grants for waste to energy projects to municipalities • Financial incentives such as subsidies on interest rates and capital costs for demonstration projects • 100 per cent accelerated depreciation and exemption from sales and excise taxes are offered • Financial assistance to waste to energy projects are provided by MNRE, MoEF and financial institutions like IREDA, NABARD, state financial corporations and commercial banks • International agencies supporting funding of waste to energy projects include USAID, kfW, JBIC, GEF, IFC, ADB and the US EXIM Bank Opportunities While the Indian Government’s own figures would suggest that the cost of waste to energy is somewhat higher than other renewable sources, it should be kept in mind that waste to energy facilities serve a dual role of waste disposal and energy production. Although the cost per MW of capacity may be greater than other renewable sources, the benefits of waste management, energy and metals recovery, and reduction of GHG emissions need to be considered. 3.1.5 • Separation of wet organic wastes of Power (MoP) and the Central Electrical Authority (CEA), while the responsibility for execution and maintenance was with the State Electricity Boards (SEB). Today MoP is involved only in hydropower projects larger than 25 MW, while the MNRE is responsible for projects with station capacities of 25 MW or less. There are several incentives offered by the government, such as: • Financial assistance is provided by way of interest subsidy for commercial projects • In several states, various additional supporting policies are available for private small hydro projects, including wheeling and banking, buy-back of power, and allowances for third-party sale • Incentives are given to the state nodal agencies for promotion, coordination and monitoring of such projects • Direct subsidies for different project costs are available • Capital subsidies are available for Small hydro • Secondary collection and storage Background • Recycling of wastes • Transportation and logistics • Biogas-based power generation from sludge • Production of machineries and equipment for energy recovery technologies • Incineration and sanitary landfills • Decentralised technology installations • Power generation and sale of power Some Key Facts • An estimated 55 million tonnes of municipal solid waste and 4,400 million cubic metres of liquid waste are generated in urban areas of India annually with a potential of 2,600 MW of power production • The moisture content of urban MSW is 47 per cent and the average calorific value is 7.3 MJ/kg (1745 kcal/kg) • Indian Government has proposed incentives for waste to energy projects that would come up through public-private partnership mode with city municipalities in the 12th five year plan In India, small and minimal hydro potential can provide a solution for the energy problems in remote and hilly areas where extension of grid systems is comparatively uneconomical. It is one of the least expensive and most attractive forms of renewable energy. As on today, small and mini hydro (hydroelectricity) capacity aggregation to about 340 MW is in operation. With an estimated potential of about 15,000 MW in India, the government is determined to develop this sector at a faster pace. »» New plants implemented by the private sector or Non-Governmental Organisations (NGOs) »» Renovation and existing plants Government initiatives to promote the sector Until 1989, all hydropower projects were under the administrative control of the Ministry Table 12: List of Key Organisations in India »» New plants between 100 kW and 25 MW implemented by the state maintenance of »» Watermills and micro hydro projects up to 100 kW • In all cases, special category and northeastern states have a higher subsidy. Research Institute/NGO Mainline of Activity Website National Environmental Engineering Research Institute (NEERI) Energy research www.neeri.res.in Drivers Challenges Department of Science and Technology (DST) Science technology www.dst.gov.in/ scientificprogramme/ t-d-solar-energy.htm Renewable, energy security and fuel shortage Geographical surprises GHG mitigation Land acquisition Drivers and challenges Waste to Energy Research and Technology Council Waste to energy project research wtert.in/ Peaking support (as against other RE) making it cheap in the long run Rehabilitation and resettlement Centre for Ecological Sciences (CES), Indian Institute of Science Energy research wgbis.ces.iisc.ernet.in/ energy/ Development of remote areas Forest and environmental clearances The Energy and Resources Institute Energy research www.teriin.org 32 Cleantech Handbook – India Poor road infrastructure Source of revenue for states Lack of access to hydrological data Cleantech Handbook – India 33
  18. 18. Emerging Cleantech Sectors and Opportunities for Finnish Companies CLEANTECH HANDBOOK – INDIA India‘s unique proposition for small hydro projects, in the form of capital subsidies. Need and Exclusivity: Realising the fact that mini hydropower projects can provide a solution for the energy problem in rural, remote and hilly areas where extension of grid system is comparatively uneconomical, promoting mini hydro projects is one of the objectives of the small hydropower programme in India Community Ownership: While small hydro projects are developed by various state agencies responsible for renewable energy, the projects are normally maintained with local community participation. Government Incentives: The Government of India already provides significant incentives Private Sector Ownership: A number of tea garden owners and other private factory owners have also set up such micro hydro projects to meet their captive requirement of power. Table 13: List of Key Organisations in India Research Institute/NGO Main line of activity Website International Association from Small Hydro (IASH) RD, planning, consulting on construction and operation cbip.org/iash/iash.html Indian National Hydro-power Association Promotion and development of projects hpaindia.org/ Alternate Hydro Energy Centre Waste to energy project research ahec.org.in/index.html National Hydroelectric Power Corporation (NHPC) Public sector enterprise which promote and organise an integrated and efficient development of hydro projects www.nhpcindia.com/ Table 14: Opportunity Snapshot for Finnish Companies Small Hydro Description Some 967 small hydro projects with an aggregate capacity of 3,632 MW have been installed in India to the end of April 2013, with 24 states announcing a policy to invite private sector bodies to set up projects. In addition, 281 small hydro projects with an aggregate capacity of 1,061 MW are also under construction in various states. Growth Forecast The Indian market for small hydropower offers good business opportunities to international companies. The market development has been very positive and constant, and the applicability and economic viability of small hydro technology in India has been proven adequately. In order to develop hydropower projects, foreign companies prefer to work with an Indian partner who has a good local network in the relevant region and can take the lead on the purchase of land and the approval processes. Recognising that small hydropower projects can play a critical role in improving the overall energy scenario of the country and in particular for remote and inaccessible areas, the ministry aims to harness at least half of the potential in the country over the next decade to bring the installed capacity of small hydro to about 7 GW by the end of 12th plan in 2017. Financing Conclusion • MNRE is providing Central Financial Assistance to set up small/micro hydro projects both in the public and private sectors • Government is also providing financial support to the state governments for the identification of new potential sites, including surveys and the preparation of detailed project reports, and renovation and modernisation of old projects • Financial assistance also provided by financial institutions like IREDA, state financial corporations and commercial banks • International agencies supporting funding including USAID, kfW, JBIC, and IFC Opportunities • Low head power generation systems • High efficiency systems • Portable micro-hydro systems Some Key Facts • Private sector participation has increased in small hydro projects because of affordable investment and strong government support • There are a number of structural issues that impact on the country’s ability to develop large capital-intensive projects like large-scale hydropower and as a result a good deal of attention has been focused on the development of small hydropower capacity (output of= 25MW) 34 Cleantech Handbook – India Cleantech Handbook – India 35
  19. 19. Energy Efficiency CLEANTECH HANDBOOK – INDIA 3.2 Background The gap between supply and demand of energy is continuously increasing despite huge outlay for energy sectors since independence. Further, the burning of fossil fuel is resulting in greenhouse gases which are detrimental to the environment. The gap between supply and demand of energy can be bridged with the help of energy conservation which may be considered as a new source of energy which is environment-friendly. The energy conservation is cost-effective with a short payback period and modest investment. There is a good scope of energy conservation in various sectors, viz industry, agriculture, transport and domestic. Government initiatives to promote the sector ENERGY EFFICIENCY The government launched the National Mission on Enhanced Energy Efficiency (NMEEE), with an outlay of Euro 0.03 billion in June 2010. This is one of the eight missions under the NAPCC. By 2015, the mission is expected to result in savings of nearly 23 million tonnesoil equivalent of fuel in coal, gas, and petroleum product. The following steps were taken by the Government of India in order to create the market demand for energy efficiency in India: • • 36 Cleantech Handbook – India Establishment of Bureau of Energy Efficiency as a statutory body under the Ministry of Power, which mandates energy efficiency standards, manages, finances, and monitors energy efficient efforts throughout the economy, including the industrial sector, through energy audits Preparation of bankable projects in various sectors like government buildings, municipalities, agriculture, SMEs • Mandating all large government buildings to undertake energy efficiency in 2013 – about 8,000 large buildings with investment potential of € 1.47 billion • Setting appliance standards and making them mandatory • Setting up norms for large energyintensive industries like thermal power, fertilizer, cement, pulp paper, chlor alkali, steel, textiles, railways and aluminum. An investment in new technologies of € 4.4 billion is expected • Massive mass media campaign to enhance awareness amongst stakeholders • National Energy Conservation Awards for best performing industries in energy efficiency • Establishment of the (autonomous) Energy Management Centre under the Ministry of Power for implementing and monitoring energy conservation programmes and to provide policy guidance and advice on energy efficiency • Removal of price and output controls to promote industrial competitiveness • Energy price reforms to guide energy efficiency initiatives and encourage international competitiveness • Formation of state energy conservation funds that enable states to encourage energy efficiency in several industries • Grant funds to encourage preparation of “Detailed Project Reports (DPRs)” for energy efficiency projects • Enabling trading of energy efficiency certifications that encourages productivity and competition among businesses Cleantech Handbook – India 37
  20. 20. Energy Efficiency CLEANTECH HANDBOOK – INDIA India‘s unique proposition • Demand Management: Demand-side management has emerged as a major business area as consumers are more and more inclined towards energy saving solutions. This is creating a lucrative market for energy efficiency in India Customised Products and Pricing: Tailor made products (such as time-of-day services) is catering to customers with varying consumption patterns. At the same time, the breadth of products offered on power exchanges is rising significantly • New Value Proposals: Retail players will strive to standout through well-crafted value propositions that attract customers. These include green power, improved quality of service, and better costs – advances already made in some developed markets Government Incentives: The Government of India already provides significant incentives for energy efficiency projects, under the NMEEE scheme • • Drivers and challenges Drivers Challenges Increasing energy requirements Lack of enforcement of standards, codes and labelling Climate change and environmental considerations Information asymmetry about investments and technologies Energy security Increasing mistrust due to weak contracts Lack of adequate supply options Difficulties in measuring energy savings Large scope for energy efficiency measures` Lack of financial resources and planning Favourable legislation and policy initiatives Lack of appropriate technologies Potential for increased role of ESCOs 38 Cleantech Handbook – India Cleantech Handbook – India 39
  21. 21. Energy Efficiency CLEANTECH HANDBOOK – INDIA Table 1: Opportunity Snapshot for Finnish Companies Description India’s energy intensity per unit of GDP is higher as compared to Japan, USA and Asia by 3.7 times, 1.55 times and 1.47 times respectively. This indicates inefficient use of energy but also substantial scope for energy savings. The increasing global trade liberalisation and growing global competition have made productivity improvement, including energy cost reduction, an important benchmark for economic success. Growth Forecast The Bureau of Energy Efficiency forecasts expenditure of Euro 107.21 billion throughout the next decade in Energy Efficiency. Financing Table 2: List of Key Organisations in India Research Institute/NGO Mainline of Activity Website Bureau of Energy Efficiency (BEE) Energy research www.bee-india.nic.in/ Renewable Energy and Energy Efficiency Partnership (REEEP) A market catalyst for clean energy in developing countries and emerging markets www.reeep.org UNIDO An UN body promoting sustainable initiatives in Industries with a focus on developing economies www.unido.org PCRA Energy research www.pcra.org The Energy and Resources Institute Energy research www.teriin.org • SIDBI and BEE are working as co-implementing agencies for preparing a World Bank funded project titled “Financing energy efficiency at MSMEs” • SIDBI Financial Scheme for energy saving projects in MSME sector under JICA (Japan International Corporation Agency) Line of Credit • Scheme for energy savings projects, energy audit subsidy, upgrading energy auditing facilities by PCRA, nationalised banks and funding agencies like UNIDO, GEF, GIZ, IFC, etc. • Credit Linked Capital Subsidy Scheme (CLCSS), incentives offered by state/central governments 80 per cent depreciation in the first year on the specified energy efficiency equipment and concessional excise and customs duty on notified energy conservation equipment to promote energy efficiency • Concessions/rebates and special provisions from IREDA Opportunities • Operations and maintenance systems • Technologies and best practices • Waste heat recovery and steam utilisation Conclusion India has limited sources of conventional energy and is highly dependent on the imports for coal and oil. A lot of the nation’s wealth goes into the import of coal and oil for energy. According to the reports of World Resources Institute (WRI) India’s energy demand will more than double in 2030. The volatile situation in oil exporting area raises concerns of energy security rather than just price volatility. For a nation like India where internal resources are limited and external resources are costly and uncertain, the future lies not just on renewable energies but also on energy efficiency. • Use of improved materials • Use of efficient lightings, heating and cooling • Use of efficient cooking • Use of improved fuels Some Key Facts • The state has made provisions for a partial risk guarantee fund to comfort private lenders, and the venture capital fund to provide the initial seed capital. They are also engaging in capacity-building of banks and financial institutions • India’s current initiatives for the promotion of energy efficiency rely heavily on market and market players for effective implementation • Though the goal is to make energy efficiency an automatic outcome of market transactions - something that will eventually be self-sustaining – there is less trust in the capacity of market institutions 40 Cleantech Handbook – India Cleantech Handbook – India 41
  22. 22. Water and Waste Water CLEANTECH HANDBOOK – INDIA 3.3 Background India has about 3 per cent of water resources and 16 per cent of the world’s population. Water in India is a state subject, however, central government plays a pivotal role in policymaking as well as financing development expenditure in the sector. Today, drinking water investments constitute about 3 per cent of the national budget. About 85 per cent of the urban and 75 per cent of the rural population have access to public water supplies. But access is not equal to service and service delivery is fairly poor with most cities in India getting only for few hours in a day. The National Water Mission which is one of the eight missions under the National Action Plan on Climate Change, aims for 20 per cent conservation in water use. Although water deficiency is widely prevalent, industry experts are optimistic that this shortfall can be met with a strong focus on innovation, demand side management and better policy and regulatory framework. WATER AND WASTE WATER Government initiatives to promote the sector »» Reform linked investment programme across 65 cities As per the Indian Constitution, water is in the domain of the states with the central government responsible for guiding policy framework as well as financing programmes like: • National Water Policy 2002 »» Primacy of drinking water; integrated water resource management; private participation »» Expected to be revised in 2012 • 42 Cleantech Handbook – India Jawaharlal Nehru Renewal Mission National Urban »» 56 per cent of the value of approved projects in water and sewerage sector worth Euro 5.29 billion »» Achieving OM cost recovery is a key objective • Rajiv Gandhi National Mission (RGNDWM) Drinking Water »» Decentralised management of water supply by communities leading to convenient availability of potable water at affordable costs »» Focus on maintenance and incentives for reforms in management Cleantech Handbook – India 43
  23. 23. Water and Waste Water CLEANTECH HANDBOOK – INDIA • National Action Plan on Climate Change – National Water Mission »» Ensuring conservation of water; minimise wastage and ensure equitable distribution »» Promote basin level integrated water management Some of the initiatives being taken at central, state and local for promoting the water sector include: 1. Some states have formed/propose to form water regulatory authority for determining inter sector allocation and regulation of tariffs 2. Service level benchmarks proposed by MOUD are being mainstreamed 3. Increasing use of turnkey contracts (such as DBFOT, DBO), etc. by states and local government ensuring long-term involvement of private sector and larger sized contracts 4. Viability Gap Funding of up to 40 per cent under the Government of India’s initiative to promote PPP in infrastructure, including water supply 5. The JNNURM has supported water supply and sewerage projects worth Euro 72 million since its inception in 2006. Phase II of the mission may be launched in 2014 with additional funding 6. A proposal to setup a National Bureau of Water Use Efficiency, on similar lines of BEE to drive efficiency improvements in the sector Table 1: Opportunity Snapshot for Finnish Companies Water Description Water companies from across the world have established presence in India to pursue an estimated 70 projects worth several billion Euros in 20 Indian cities across the country. India’s water policies are aimed at encouraging private investment, so that new business models evolve to cater to the needs of the society in an economically efficient way. Growth Forecast • Budgetary allocation from the government and aid organisations: The Planning Commission has made an outlay of Euro 16.66 billion for Rural Water Supply Sanitation and Euro 12.31 billion for urban water supply and sanitation. • Estimated market size by 2030: 7. Many states have mandatory requirements for harvesting rainwater in urban areas 8. Proposed revision of guidelines for development of water supply projects could spur opportunities for higher end technologies »» Distribution and supply: Euro 1267.49 billion »» Financing Water collection and treatment: Euro 23.18 billion »» Water resource management : Euro 33.03 billion • Aids provided by World Bank and ADB • Soft loans are provides through nationalised banks and other financial institutions 9. Some states, especially those with large coastal regions, have prioritised desalination for meeting drinking water as well as industrial water requirements • A 10-year, 100 per cent deduction of profits and gains is available for companies operating in water supply, water treatment, and sanitation projects • 100 per cent FDI under automatic route • 100 per cent depreciation within first year of project installation • Exemptions/reduction from excise duty, central excise sales tax, customs on import of materials, components and equipment Drivers and challenges Opportunities • Technology engineering related: Availability, assessment extraction, treatment and purification, metering, quality monitoring, operation maintenance bottled water, borewells and irrigation Drivers Challenges Demand and supply side create opportuntiies Increasing water demands due to population pressure and urban sprawl • Management monitoring: Project management, remote monitoring leak detection Euro 21.73 billion is the size of Indian water sector Water requirement for industrial growth • Data collection information management Equipment market is worth € 220-367 million, and expected to have double-digit growth rates every year Increasing irrigational and agricultural demands • Developer operator related: EPC contractor, boot operator – with expertise in OM, control and leak/defect detection technologies like SCADA solutions, flow mapping systems, revenue collection and customer service Increased awareness about drinking water quality and health Water cycle imbalances and stress High potential for increasing water use efficiency across all sectors Over exploitation of water resources Reducing availability of water forcing users to go for reuse and recycling of water Poor water quality necessitating use of advanced technology for treatment Trends towards zero discharge and green buildings Political and regulatory disputes Potential for increased role of ESCOs Excessive withdrawal of ground water leading to unsustainability of source 44 Cleantech Handbook – India Some Key Facts • Estimating baseline data is critical • Addressing measurement issues should be high on agenda • Focus on costs and estimating improvement options required • Appropriate risk assessment before initiating reuse of wastewater • Local and municipal participation is essential for selection and promotion of new technology Cleantech Handbook – India 45
  24. 24. Water and Waste Water CLEANTECH HANDBOOK – INDIA Table 2: List of Key Organisations in India Research Institute/NGO Mainline of Activity Website Water and Land Management Institute Research and training www.walmi.org/ Water and Sanitation Programme Support towards water projects www.wsp.org/ NEERI Research on national/societal missions on drinking water www.neeri.res.in International Water Management Institute (IWMI) Research and programmes on water resources www.iwmi.cgiar.org Energy research www.pcra.org Centre for Environment Planning and Technology (CEPT) Research and policy advise and technology development on urban water www.cept.ac.in The Energy and Resources Institute (TERI) Research on water, water audits www.teriin.org The Central Public Health and Environmental Engineering Organisation (CPHEEO) Ministry of Urban Development, Government of India entity which deals with the matters related to urban water supply and sanitation cpheeo.nic.in National Institute of Hydrology, Rou Society under Ministry of Water Resources working in the area of hydrology and water resources www.nih.ernet.in CII-Triveni Water Institute Working on sustainable water management practices www.cii.in/CII_Triveni_ Water_Institute.aspx Conclusion India’s fragile and finite water resources are depleting while the multi-sectoral demands for water from sustained economic growth is driving the increased demand for water through coupled dynamics between increased energy 46 Cleantech Handbook – India and consumption. Exponentially increasing demand for water due to population growth and agricultural use, coupled with a high degree of variability in the availability of water resources throughout the country, will drive per capita accessibility of water to under 1,000 cubic metres by 2020 if left unchecked. Cleantech Handbook – India 47
  25. 25. Urban Design and Smart Cities CLEANTECH HANDBOOK – INDIA 3.4 Background Indian urban agglomeration needs an efficient infrastructure and smart city planning that will meet the demands of a growing population. India is booming and sustainable development has become increasingly more important. According to a United Nations report, India’s population currently encompasses about 1.2 billion people and is expected to grow by another 300 million within the next couple of decades. With cities generating two-thirds of the country’s economic output, an increasing number of Indians are leaving rural areas to seek employment in cities, relying on an efficient urban infrastructure. »» Enhance public-private partnership in infrastructural development »» Promote planned integrated development of towns/cities • Besides the ongoing JNNURM implementation in 65 Indian cities, Ministry of Urban Development has undertaken the flagship Urban Infrastructure Development Scheme for Satellite Towns (UIDSST) around seven megacities and eight satellite • Integrated Development of Small and Medium Towns scheme which aims at the development of selected regional growth centres with infrastructure and service facilities so as to enable such towns to emerge as regional centres of economic growth and employment opportunities and arrest migration from rural areas and small towns to large metropolitan cities • NERUDP – ADB funded North Eastern Region Urban Development Programme (NERUDP) to renew the urban infrastructure the northeastern states of India • Rajiv Awas Yojana – Ray for the slum dwellers and the urban poor envisages a slum free India through encouraging States/Union Territories to tackle the problem of slums in a definitive manner Government initiatives to develop the sector URBAN DESIGN AND SMART CITIES • • Launch of JNNURM – Jawaharlal Nehru National Urban Renewal Mission to improve urban infrastructure services in the identified cities to make them efficient and effective centres of growth. UIDSSMT scheme – The Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT), a component of the JNNURM to »» Improve infrastructural facilities and help create durable public assets and quality oriented services in cities and towns 48 Cleantech Handbook – India Pilot scheme for funding infrastructure in satellite towns around seven megacities Cleantech Handbook – India 49
  26. 26. Urban Design and Smart Cities CLEANTECH HANDBOOK – INDIA Drivers and challenges Urban Design Drivers Challenges Huge spend on infrastructure Challenging business environment Environmental impacts Unpredictable regulations GHG mitigation Bureaucratic delays in approving projects Government support Delays with acquiring land Financial backing Some Key Points Lower transparency India’s unique proposition • • The sector is driven by its necessity and other market dynamics, and is a genuine sector of growth in India. High market potential and consistent growth in the past few years have shown a rising trend in urban infrastructure development The Indian economy and growth in this sector is more need-based and real than speculation. The income status of people and their education level is constantly rising with the urbanisation that is happening in India. A lot of possibilities of growth are found in mega offices and Special Economic Zones (SEZs); industry parks will happen with the policy framework by Government in India given emphasis to environment and green building initiatives at the same time Table 1: Opportunity Snapshot for Finnish Companies Urban Design Description Any Indian urban agglomeration needs an efficient infrastructure and smart city planning that will meet the demands of a growing population. Providing access to healthcare and drinking water, a reliable power supply and public transportation are some of the key elements for sustainable urban development Growth Forecast By 2030, it is predicted that 68 Indian cities will each have more than one million inhabitants, and six megacities with more than 10 million inhabitants each Financing • Government support towards concessional loans from Housing Urban Development Corporation (HUDCO) through Grants • Financial incentives such as subsidies on interest rates and capital costs for demonstration projects • Financial assistance from JNNURM, Rajiv Awas Yojana, India Infrastructure Finance Company, Planning Commission, Ministry of Urban Development (MoUD), Ministry of New and Renewable Energy (MNRE), Ministry of Environment Forest (MOEF) and state financial corporations and commercial banks • GDP would have multiplied five times, 590 million people will live in cities, nearly twice the population of the United States today • 270 million people net increase in working age population, 70 per cent of net new employment will be generated in cities • 91 million urban households will be urban middle-class, up from 22 million today • 68 cities will have population of 1 million plus, up from 42 today, Europe has 35 today, Euro 0.87 trillion capital investment is necessary to meet projected demand in Indian cities • 700-900 million square metres of commercial and residential space needs to be built or a new Chicago every year • 2.5 billion square metres of roads will have to be paved, 20 times the capacity added in the past decade • 7,400 kilometers of metros and subways will need to be constructed – 20 times the capacity added in the past decade Figure 2: List of Key Organisations in India Research Institute/NGO Mainline of Activity Website Association of Metropolitan Development Authority (AMDA) Research and capacity building in sustainable urban development www.niua.org Housing and Urban Development Corporation (HUDCO) Building affordable housing and carrying out urban development www.hudco.org/ National Buildings Construction Corporation (NBCC) Project management of sectors such as real estate-both residential and commercial, power, environment, healthcare, transportation, institutions, roads, border fencing, mass housing, office complexes www.nbccindia. gov.in Town and Country Planning Organisation (TCPO) Technical advisory on urban and regional planning strategies, research, appraisal, and monitoring of central government schemes and development policies www.urbanindia. nic.in Centre for Environment Planning and Technology (CEPT) Research and policy advise and technology development on urban water www.cept.ac.in The Central Public Health and Environmental Engineering Organisation (CPHEEO) Deals with the matters related to urban water supply and sanitation cpheeo.nic.in Urban Mass Transit Company Developing, operating and maintaining sustainable mass transit infrastructure www.umtc.co.in/ • International agencies supporting funding projects Opportunities Sustainable housing, transportation, water supply and sanitation, solid waste management, pollution abatement, disaster management, urban design, green architecture, town planning, renewable energy, smart infrastructure Conclusion The country is set to build 500 new cities over the next 20 years to house 700 million more city 50 Cleantech Handbook – India dwellers by 2050, according to a study by consulting firm Booz Company. This will bring out ample developments in the Indian urban development. It is a high growth priority sector in India. Cleantech Handbook – India 51
  27. 27. Waste Management CLEANTECH HANDBOOK – INDIA 3.5 Background Rapid economic growth is leading to urbanisation and industrialisation generating waste which is adversely affecting the environment. Due to the liberalised policy, the pace of industrialisation has accelerated, which has resulted in increasing amounts of hazardous wastes every year. Waste management has become a matter of great concern to most city corporations, and there have been some instances of management collapse even in metropolitan cities in the year 2012. All this build-up took place within a single decade, which is why many corporations have awakened to the rude shock. There has been an unpredictable increase in both industrial and domestic wastes. The government and corporations have now taken cognizance of things that require immediate attention, and a lot of funds have been diverted to various waste management projects. WASTE MANAGEMENT Municipal solid waste management is quite a complex process, which clearly means a lot of investment has to be facilitated in infrastructure, technology and planning. It means efficiently handling nature, it is entrusted to the Urban Local Bodies (ULBs). The management of municipal solid waste is one of the most important obligatory functions of the urban local bodies. Some government initiatives are mentioned herewith: • Bio-medical Waste 1998 – Notified Handling Rules, • Municipal Solid Waste Management Rules, 2000 – Notified • Reforms Agenda (Fiscal, Institutional, Legal) • Technical Manual on Municipal Solid Waste Management • Technology Advisory Group on Municipal Solid Waste Management • Inter-Ministerial Task Force on Integrated Plant Nutrient Management from city compost • For initiating SWM programmes government’s JNNURM programme to fund cities for developing urban infrastructure and services • Financial assistance at a flat rate of Euro 0.2 million per MW, subject to ceiling of 20 per cent of project cost and Euro 1.2 million per project, whichever is less • Tax Free Bonds by ULBs permitted by Government of India • Institutional waste • Dead animals waste at slaughter houses • Public-Private Partnership in SWM • Demolition and construction wastes • Capacity building • Wastes which gets accumulated on the roads • Urban Reforms Incentive Fund • Waste derived from horticultural processes • Treated bio-medical waste • Guidelines for PSP and setting up of Regulatory Authority • Waste due to drains and outlets • • Sludge from industries Introduction of Commercial Accounting System in ULBs other Sector Reforms • Commercial waste from the market areas • Model Municipal By-Laws framed/circulated for the benefit of ULBs for adoption • Tax Holiday: A 10 year, 100 per cent deduction of profits and gains is available for companies operating in waste projects. Tax/Duties Relief: Government initiatives to develop the sector The Ministry of Environment and Forests (MoEF) and the pollution control boards: Central Pollution Control Board (CPCB) and State Pollution Control Boards (SPCBs) together form the regulatory and administrative core of the sector. As Solid Waste Management (SWM) is part of public health and sanitation – according to the Indian Constitution – it falls under the state list. As this activity is of local 52 Cleantech Handbook – India »» Direct taxes: 100 per cent depreciation within first year of project installation »» Exemption/reduction in excise duty »» Exemption from Central Sales Tax, and customs duty concessions on the import of material, components and equipment used in Renewable Energy RE projects Cleantech Handbook – India 53
  28. 28. Waste Management CLEANTECH HANDBOOK – INDIA »» Duty-free import of renewable energy equipment »» Exemptions from electricity taxes Waste Management Opportunities Drivers and challenges • Joint ventures with Indian firms to offer integrated solutions in waste treatment, including performing feasibility studies, designing, technical consulting and providing operation and online maintenance services • Demand for technologies and services for effective waste collection, transportation and disposal, and its treatment and recycling Drivers Challenges Stricter norms Precarious financial status of ULBs making it a high risk sector Public interest litigations and rulings of the courts for domestic wastes Institutional complexity • Engineering and consulting services on waste collection and transportation, landfill treatment, waste treatment plants, outdoor compositing, anaerobic digestion of waste and sewage sludge, biological-mechanical waste treatment and waste to energy Scarcer landfill space Few bankable and financially sustainable projects • Technologies and solutions for high polluting sectors, such as thermal power stations, chemical and pharmaceutical industries Health and environment Improper choice of technology Public apathy towards waste India’s unique proposition • Wealth from Waste: Organic fraction of municipal solid waste contains biodegradable matter ranging from 30 per cent to 55 per cent which can be profitably converted into useful products like compost (organic manure), methane gas (used for cooking, heating, lighting, production of energy), etc. • • • esign, manufacture and installation of various types of waste management systems D Some Key Facts • Estimates of the municipal1 and hazardous2 waste market is above € 1.5 billion and around € 171 million respectively Recycling of Waste (Plastics, Paper, Glass, Metal, etc.): Recyclable materials like paper, cardboards, plastics, polythene bags, pieces of metals and glass are recycled to recover useful resource Sanitary Landfilling: Rejects from compost plants, recycling and other inorganic materials like construction debris in municipal solid waste are sent to scientifically engineered landfills • Government initiatives, fast industrialisation and urbanisation in the country have benefitted the solid waste management market. • Urban local bodies and the state governments are actively working towards bringing about urban transformations • Most of the reforms are aimed at infusing highest sustainability to infrastructure developments • € 253.59 million has been approved for 44 projects Table 2: List of Key Organisations in India Research Institute/NGO Table 1: Opportunity Snapshot for Finnish Companies Waste Management Description Growth Forecast India offers excellent opportunities for international or foreign companies specialising in various waste management processes. Even the companies selling products and technology will find India as a big and lucrative marketplace. With a growing urgency for efficient waste management in many cities across India, there will be more and more projects and employment opportunities in the sector. • With the growth trend set to continue urban India will generate 160.5 million by 2041 and over the next decade some 920 million tonnes of solid waste will need to be properly managed • The solid waste management industry is likely to grow at a CAGR of approximately 7 per cent during 2011-15, thus positioning India as one of the most preferred destinations for industry investments Financing • High Grant Components for Solid Waste Management in Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Urban Infrastructure Development Scheme for Small Medium Towns (UIDSSMT) • Financial assistance by financial institutions like IREDA, NABARD, state financial corporations, commercial banks and international agencies 54 Cleantech Handbook – India Mainline of Activity Website National Environmental Engineering Research Institute (NEERI) Energy research www.neeri.res.in Department of Science and Technology (DST) Science and technology www.dst.gov.in/ scientificprogramme/ t-d-solar-energy.htm National Solid Waste Association of India (NSWAI) Solid waste management including toxic and hazardous waste and also biomedical waste in India. www.nswai.com/ The Energy and Resources Institute Research on waste management www.teriin.org Indian Society of Hospital Waste Management Facilitate/advocate/undertake research activities on issues of hospital waste management www.medwasteind.org/ Conclusion Waste management in India is in the development stage with both urban and industrial waste set to grow dramatically over the next few years. For most of the urban local bodies in India, solid waste is a major concern that has reached alarming proportions, requiring management initiatives on a war footing. There is an increasing need for new technologies and waste management systems, which makes it the right time for foreign companies to invest in India. To put it simply, waste in India is a big business. Cleantech Handbook – India 55
  29. 29. Green Buildings CLEANTECH HANDBOOK – INDIA 3.6 Background There is a burgeoning need of housing in the urban areas and many cities will be developed bigger in terms of housing and commercial building needs in the next couple of decades. Since India is an energy deficient country, it needs to employ energy efficient sustainable solutions. GREEN BUILDINGS India’s building-occupied area is projected to grow from eight billion square metres (sq.m.) in 2005 to 41 billion square metres in 2030. Incorporating energy efficiency measures in these new buildings will help India meet its energy needs and increase its energy security. India’s energy production must grow 6.5 per cent per year from 2012 to 2017. Buildings already account for more than 30 per cent of the country’s electricity consumption, and nearly 70 per cent of the buildings in India that will exist by 2030 are yet to be built. The market potential for green building products in India by 2015 is estimated to about Euro 72.43 billion as per IGBC (Indian Green Building Council). Government initiatives and policy frames for green buildings in India • Ministry of Environment and Forest (MoEF) is the main policy frame maker, issuing the building codes and guidelines for the green building development, and has the highest authority to make decisions on building and construction from environment perspective • The other recognised institutions apart from the government are the widely accepted rating agencies. The first and most widely used ratings system internationally is the American Leadership in Energy and Environmental Design (LEED) system. In India, the Indian Green Building Council (IGBC) has adapted LEED to create LEED India and is responsible for certifying buildings under this system • At present, the IGBC offers two certifications for office buildings. The first, LEED for New Construction and Major Renovations is for buildings where the design and operation is fully in the scope and control of owner or developer. LEED India for Core and Shell certifies buildings where the owners or developers do not control all aspects of design and construction. The Energy and Resources Institute (TERI) has developed its own ratings system, Green Rating for Integrated Habitat Assessment (GRIHA) • In 2007, the Bureau of Energy Efficiency (BEE) launched the voluntary Energy Conservation Building Code (ECBC) that sets minimum energy standards for new commercial buildings having a connected load of 500 KW or contract demand of 600 KVA or more Drivers and challenges Drivers Challenges Faster clearances for green building projects Mindset of the investor about higher costs Small payback time reduces operational costs Slow growth GHG mitigation High capital cost Resource efficiency Lack of clarity on policy directives Energy and water crunch Limited indigenous knowledge Greater awareness Low financial commitment Lack of technological know-how 56 Cleantech Handbook – India Cleantech Handbook – India 57

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