It may be noted that 24 percent of the CDM projects rejected worldwide until November 2010 originate from India (44 CDM projects out of 180 in absolute numbers).
India is among top 5
So far, the Indian DNA approved 545 wind projects (>8540 MW). 468 projects with an installed capacity of more than 7200 MW are still in the pipeline in which 153 projects of 3130 MW were registered by CDM EB until December 2010.
*Other: more than one stateFigure does not consider rejected and withdrawn projects alongwith projected with negative validation and validation terminated.
19 solar energy based CDM projects have been approved by Indian DNA (Registered - 4, Reg. request - 1, At Validation - 11, Validation terminated – 3)
Role of carbon finance in promoting renewable energy development in India Pallav Purohit International Institute for Applied Systems Analysis (IIASA), AustriaInternational workshop on “The private sector and climate change: opportunities and challenges in emerging economies” 18th January 2011 ORF, New Delhi
Contents Why renewable energy (RE)? Overview of Indian power sector Status and potential of RE in India Clean Development Mechanism (CDM) Status of Indian RE projects under CDM The way forward
Why renewable energy?• Energy security – Limited amount of fossil-fuel resources (India imports more than 70% of its crude oil requirements• Ever increasing demand for energy – Supply regularly being over stripped by demand (≥ 10% peak power shortage between April to December 2010.• Climate change – To reduce the emission intensity of its GDP by 20-25% by 2020 through domestic mitigation actions• Increased financing options – Govt. incentives/legislations (financial/fiscal incentives, GBI, RPO, etc.), carbon finance (CDM, GEF, MDI’s, etc.)
Macro-economic development and energy use in India 800% 80 700% 70 600% 60 500% 50 Exajoules/year Relative to 2005 40 400% 30 300% 20 200% 10 100% 0 0% 1990 1995 2000 2005 2010 2015 2020 2025 2030 1990 2000 2010 2020 2030 GDP Total energy consumption Coal Oil Gas Renewables GDP/capita Population Hydro Nuclear BiomassSource: GAINS/IIASA
Overview of Indian power sector Thermal Hydro Renewable Nuclear Total 108,363 MW 37,367 MW 16,787 MW 4,560 MW 167,077 MW As on 30th November 2010Source: Ministry of Power
Installed capacity of renewables in India - until 30th June 2010 Grid-interactive renewable power Off-Grid/Distributed Renewable Power (17174 MW) (including Captive/CHP Plants) (420 MW)Source: Ministry of New and Renewable Energy (MNRE)
Status of renewables in India - until 30th June 2010 Annual global (total + diffuse) radiation varies from 1600 to 2200 kWh/m2. The equivalent energy potential is about 6,000 million GWh of energy per year.Source: Ministry of New and Renewable Energy (MNRE)
Clean Development MechanismCDM: a development tool or a market mechanism?
CDM projects by expected CER volume until 2012 • More than 5600 projects (2.7 billion CERs until 2012) in the pipeline of which 2742 were registered and 72 were requesting registration. • 22% registered projects (with 47 million annual average CERS) are located in India (2nd after China). • More than 60% RE based CDM projects contribute to 34% of CER supply. • The carbon market is forecasted to touch 408 billion by 2012 and $2.1Source: Fenhann (2011) trillion by 2020.
Investment in registered CDM projects Investment in renewable energy projects Investment in registered CDM projects - (requested registration) 70 30000 61.7 60 Investment (million Euro) 25000Investment (billion Euro) 50 20000 40 15000 30 10000 20 14.1 9.0 5000 10 5.7 3.6 2.0 0.5 0 0 2005 2006 2007 2008 2009 2010 China India Latin America Rest of Asia Africa Middle-East Europe and Central Asia Biomass energy Geothermal Hydro Solar Tidal Wind • The estimated investment in registered CDM projects is more than 96 billion until December 2010 in which China accounts for more than 63% ($61.7 billion) of the total investment and India accounts for 15% ($14 billion) in CDM projects.
Status of CDM projects approved by Indian DNA 978 renewable energy projects were in the pipeline until December 2010.Source: Fenhann (2011)
Wind energy in India - Potential • Current Scenario – 5th largest producer of wind energy in the world with a capacity of >11 GW – Tamil Nadu, Gujarat, Maharashtra and Karnataka are the leaders in wind capacity. Sea coast + Desert • Key Issues Areas (Av. PLF of 18-20%) – Short construction period and low O&M cost make it an attractive proposition Forest & Mountainous – Some regulatory /institutional region (Av. PLF hurdles exist for wheeling of 18-30%) • Future Potential Mountainous, Sea – 22% CAGR over the last 10 coast areas (Av. PLF of 25-30%) years – 5000 MW annual market by 2015 (WISE) – Reassessment of true wind potential of India. (C-WET: 48Source: C-WET GW, IWTMA: 65-70 GW, WISE:
Wind energy in India - Installed capacity 468 (out of 545) projects with an installed capacity of more than 7200 MW are still in the pipeline in which 153 projects of 3130 MW were registered by CDM EB until December 2010.Source: MNRE Annual Reports
Wind energy in Indian states - potential and installed capacity >88% >45% <2%Source: MNRE Annual Reports
Wind energy projects under CDM• More than 30% of Indian CDM projects belongs to the wind sector.• 153 (3129 MW) wind power projects were registered by CDM EB until Dec 2010.• 468 projects with an installed capacity of 7220 MW were in the CDM pipeline until December 2010 (discounting RE/WD/VT/VN).
Solar energy in India – Resource availability No. 1 along with US in terms of solar energy yield as per survey conducted by McKinsey & Co. (1700 to 1900 kWh/kWp/yr.) Among the top 5 in terms of • Natural availability overall country attractiveness for – Many parts of India have 300~330 RE as per E&Y’s report (Ranking based on regulatory environment, sunny days in a year fiscal support, unexploited resources, suitability to • Current potential technologies etc.) – Daily solar radiation 4 - 7 kWh per sq. m. which translates into a potential for 600 GW • Potential to meet future demand – 5000 trillion kWh solar radiation incident in a year which is a thousand times greater than the likely demand in electricity in the year 2015 • Jawaharlal Nehru National Solar Mission – Increasing solar capacity to 20GW by 2020, 100GW by 2030 and 200GW by 2050 – Solar power cost reduction to reach grid parity by 2020 – Solar power cost reduction to reach parity with coal based thermalSource: MNRE generation by 2030
Status of Indian solar energy projects under CDMStatus of solar energy projects under CDM Type of solar energy projects under CDM
Status of Indian biomass energy projects under CDM• 118 bagasse power projects with an installed capacity of 2135 MW out of 326 biomass energy projects were in the pipeline until Dec 2010.• 38 (605 MW) bagasse power projects were registered by CDM EB out of 167 registered biomass energy projects.
Status of Indian hydro power projects under CDM• 168 hydro power projects with an installed capacity of >6800 MW were in the pipeline until Dec 2010.• 72 (20 large and 52 small scale) hydro power projects with an installed capacity of >1100 MW are registered by CDM EB.• 5 states (Himachal Pradesh, Jammu and Kashmir, Karnataka, Sikkim Tamil Nadu and Uttarakhand) consists of 70% hydro power projects (6250 MW installed capacity) in the CDM pipeline.
Summary• Carbon finance through CDM can provide substantial value for RE businesses and support the development of new and renewable energy technologies.• Large share of unilateral CDM projects: CDM project developed by Indian stakeholders without the involvement (finance/technology) of Annex-I countries. – More than 75% Indian CDM projects until December 2010 in the CDM pipeline were unilateral.• Quality of Indian CDM projects: 24% of the CDM projects rejected by the CDM EB worldwide originate from India giving rise to concerns over the quality of Indian CDM projects as well as about the effectiveness or willingness of the Indian DNA to screen poor quality projects before they reach the EB.• For the large-scale acceptance of RE technologies in rural areas of the country – A more credible roadmap towards post 2012 scenario will help instill more confidence among project developers. – The provisions of the Programme of Activities (PoA) CDM or Programmatic CDM is critical for promotion of RE in rural areas (flexibility in terms of implementation schedules, sectoral spread of the individual activities, transaction costs of the CDM project cycle, etc).
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