This document summarizes the potential and opportunities in Indian renewable energy. It outlines why India and renewable energy in India present opportunities, including fast economic growth, rising energy needs, and supportive government policies. It provides an overview of the status and growth potential of various renewable technologies in India like solar, wind, biomass, and waste-to-energy. Finally, it discusses attractive opportunities for foreign companies across the renewable energy value chain, particularly for European companies in equipment, manufacturing, and developing renewable energy projects in India.

1. Potential and Opportunities in Indian Renewable EnergyPresentation at AGICI Seminar, Milano, ItalyJul 7, 2011NarasimhanSanthanamEnergy Alternatives India – EAIwww.eai.in

2. About EAIDedicated focus on renewable energy and cleantech for IndiaDiversification, feasibility studies, market entry strategy, business intelligenceWork with corporates on making their factories use more renewablesFounded by professionals from IITs and IIMsBased out of ChennaiMore from www.eai.in – see also our club, forum, mailing list…www.eai.in

3. ContentsWHY…India and Indian renewable energy?WHAT…is the status of and opportunities in Indian renewable energy?WHO…from abroad is already present in the Indian renewable energy sector?HOW…can you enter this exciting segment?AND…a few other takeaways

4. WHY?Why India?Why Indian Renewable Energy?India’s Energy NeedsInvestments in Indian renewable energy

5. Why India?One of the world’s fastest growing economiesWill be in the top 5 countries GDP-wise by 2020 ($1.5 trillion and growing at approx 9%)Large and growing middle classLow wage economy, optimal manufacturing base100 Indian companies have market cap of US$ 1bn 1,000 Indian companies have received foreign institutional investment125 Fortune 500 companies have R&D bases in Indiawww.eai.in

6. Why Indian Renewable Energy?Critical drivers that propel the growth of renewable energy sources in India:Fast economic growthPeak power deficitThousands of villages without access to gridCountry has rich natural resources - esp solar, wind and biomass…and waste.Government (center and state) extremely proactive to the growth of renewable energy sourceswww.eai.in

7. Why Indian Renewable Energy Now?Get an early mover advantage in one of the fastest-growing renewable energy marketsTake advantage of a number of attractive government incentives.Obtain business partnerships and JVs with prominent Indian companies that might not be available laterEnter early and go up the learning curve to benefit most when the market starts growing at exponential rate (look at the mobile industry, for instance)

8. India’s Fuel NeedsIndia uses annually (2010 data)800 billion kWh of electricity138 million T of petroleum2.26 trillion cu ft of natural gasElectricityIn 2010, peak power shortage was 12 %. Electricity demand expected to rise by 7.4% a year during the next quarter of a century.Installed capacity – 171 GWExpect to install 100 GW during 2012-17Expected installed capacity 2020 – 350-400 GW15% contribution from RE by 2020; expect to add 17 GW from renewables during 2012-17; wind (60%), solar (20%), biomass and small hydro (10% each)

9. Power SourcesOf the 171 GW (Feb 2011), 18.3 GW is renewable energy.Wind represents about 13 GW, small hydro represents 2.8 GW, and about 2.2 GW of biomass.Source: CEA

10. RE Investments in Indiawww.eai.in

11. Foreign Direct Investment in Renewable Energy

12. WHAT?Needs and DriversStatus of Renewable Energy in IndiaRegional potential for renewable energy in IndiaAttractive Opportunities for European Companies

13. Needs and DriversIncreasing electricity needsOver 60,000 villages without electricity - Dire need for distributed energy generationPeak deficit over 10%Significant industrial productivity loss due to power cuts – 7% decrease in turnovers of Indian companies, acc to Goldman SachsSignificant reliance on diesel as a standby source, increasing the import bill, and resulting in higher pollutionIncreasing needs of transport and liquid fuelswww.eai.in

14. Renewable Energy StatusSolarWindBiomassBiofuelsSmall Hydrowww.eai.in

15. National Solar Mission20 GW by 2022; state targets in additionKPMG estimates put total installed capacity 68 GW by 2022; EAI estimates put it at 75 GW (solar PV+CSP+offgrid).Focus on both PV and CSP, and thermalMidway through the first phase (total 1000 MW)200 MW of PV and 500 MW of CSP awardedState-specific Solar Missions – Rajasthan, Gujarat, MaharashtraPV expected to have race ahead in the near term, CSP higher prospects post 2015 and long termEmphasis on developing the entire ecosystemSolar Focus - Overall

16. National Solar Mission10 GW by 2022; state targets in addition1 GW by end of 2013; 5 GW by end of 2017; 10 GW by 2022Midway through the first phase200 MW of PV allocated (5 MW each); 300 MW to be allocated soonFeed in tariffs in the range – 20-24 Euro cents/kWhPV expected to have race ahead in the near term, CSP higher prospects post 2015 and long termLocal content requirementsEmphasis on developing the entire ecosystemOpportunities for foreign companies: EPCs, developers, component or equipment manufacturing, solar farm analytics, training and supportSolar Focus - PV

17. National Solar Mission10 GW by 2022; state targets in additionMidway through the first phase500 MW of CSP awardedMinimum capacity – 50 MWFeed-in-tariffs range – 16-22 Euro c/kWhPV expected to have race ahead in the near term, CSP higher prospects post 2015 and long termBHEL – Abengoa JV for CSP in IndiaOpportunities for foreign companies: EPCs, developers, technology transfer, R&D collaborationSolar Focus - CSP

18. Wind FocusTotal installed capacity – 14000 MWFifth largest installed capacity in the world Estimates – 50,000 MW by 2020Current annual additions of about 2500 MW, expected to increase to 4000 MWFeed-in-tariffs in range – 5.5-9 Euro cents/kWhMain companies – Suzlon, Vestas, Gamesa, GE, Siemens, Enercon, WinWindDemand supply gap in turbines wideningChennai Major hub for turbine manufacturing – Chennai hosts mfg for Vestas, Gamesa, WinWind, Pioneer Wincon…Opportunities for foreign companies: Developers, turbine component manufacturing, wind energy analytics

19. Biomass FocusIndia has more agricultural land than China (160 mill ha vs 137 mill ha)Total biomass availability in India – about 400 million T per year; agro waste availability – about 200 million T per year, which translates to about 30 GW of power capacityTotal installed capacity (including cogeneration): about 2.2 GW (1.1 GW cogen, 0.9 GW combustion, 0.1 GW gasification)Biomass power divided intoCombustion – 5 MW and above; low efficiency; 800 MW installed capacityGasification – 10 kW to 2 MW; medium efficiency; 120 MW installed capacityFeed-in-tariffs in range – 5.5-8 Euro cents/kWhEmerging – Pyrolysis and ADDrivers – rural power needs, small scale power needsBottlenecks – biomass supply chain, price of biomassOpportunities for foreign companies – Technology transfer (esp for small scale biomass), research collaboration in energy crops, developer

20. National Biofuels MissionBlending targets for both biodiesel and ethanolBiodieselIndia is a diesel country – (65 million T diesel vs 17 million T gasoline)Total installed capacity – 1.2 million TProduction – Less than 100,000 TBiodiesel facing serious pressure on both supply side and demand side (price)EthanolIndia second largest sugar producer in the world (350 million T per annum; Brazil – 645 million T)95 million gallons (0.32 million T) of fuel ethanol production – 20105% blending will require about 150 million gallons (0.5 million T)Tussle between use of ethanol for fuel vs. spirits vs. industrial useOpportunities for foreign companies: Research in oilseeds and cellulosic ethanol, research in increasing seed yield for crops such as JatrophaBiofuels Focus

21. Potential – 15000 MWStatus – 2950 MW (20% of total)Grew at about 10% CAGR between 2005-2010; expected to grow at about 13% between 2010-2015DriversPower requirements in remote locationsAvailability of small hydro resources in these locationsRequirements of baseload powerBottlenecksLong approval times (over 3 years)Very geography dependentRun of river and hydrokinetic in its nascent stagesLarge companies more interested in large hydroNumber of companies in small hydro keen on selling their licencesOpportunities for foreign companies – equipment and component supply, especially more efficient turbines and accessoriesSmall Hydro Focus

22. Potential – 148700 MWStatus – 37400 MW installed capacityDriversNeed for large-scale baseload powerNeed for large-scale low cost powerBottlenecksLarge ecological imprintLong time for starting offLarge capital requirementsGeological surprisesCompanies in large hydro – (Govt) SJVN, NHPC, Damodar Valley Corp., (Private) Tata Power, Reliance Power, Jaiprakash PowerOpportunities for foreign companies – equipment and component supply, ability to bring in large-scale financingLarge Hydro Focus

23. 42 million T of municipal solid waste (MSW)200 million T of agricultural wasteIndian cities alone generate 32 billion liters of sewage a day.A wide variety of industrial waste, including animal waste from poultry and cattle farmsPotential – 17 MW for MSW and 29 MW for industrial wasteDriversNeed to dispose of waste in an environment friendly mannerNeed to incentivise such waste disposalBottlenecksComplex logisticsTechnology still evolvingNeed to deal with government in many cases, slowing down processesOpportunities for foreign companies – technology transfer (esp gasification related domains), innovative tech to deal with distributed energy production using waste, tech for treatment for hazardous waste Waste to Energy

24. Overall Market Potential in IndiaGrowth Potential for Renewable Energy Sources in IndiaShort term = less than 3 years; medium term = 3-8 years

25. Opportunity Matrix for Foreign Cos.

26. Summary of Attractive OpportunitiesOpportunities in all major sectors – especially solar PV, wind, biomassOpportunities across the value chain component manufacturing->equipment supplies->power plant development->financing->training and supportSpecific opportunities for European companies in equipment and OEM sectorsWaste to energy is an important pain point where technology partnerships are being sought – both MSW and industrial wastePositive Indian government policies for component manufacturing and local contentwww.eai.in

27. Regional Potential for Renewable Energy

28. WHO?European Companies in the Indian Renewable Energy Sector

29. European Companies in Solar

30. European Companies in Wind

31. European Companies in Biomass

32. European Companies in Other RE

33. HOW?Indian Govt Policies and Regulations Relevant to Foreign InvestorsNext Steps

34. Indian Govt Policies and Regulations Relevant to Foreign InvestorsNational Solar MissionForeign Direct InvestmentElectricity Act 2003 and Open Power AccessRenewable Purchase Obligations (RPO) and Renewable Energy Certificates (REC)Local content requirementswww.eai.in

35. RECs and RPOsRPO/REC (all renewables)Long term, sustainable, market drivenREC trading startedVoluntary purchase as part of corporate social responsibility (CSR) also reportedwww.eai.in

36. Next StepsDo a more market potential study for the segment of your choiceHunt for local partnersEvolve a marketing/sales planSet up a presence in IndiaGowww.eai.in

37. AND….a few other takeaways

38. Legal Inputs on Entry of Foreign Companies into Indian RERefer to the Guidewww.eai.in

39. Real Status of the Solar PV / CSP Industry in IndiaJNNSM first round of bidding over – 150 MW allotted in PV and 470 MW in Solar ThermalChallenge in terms of reverse bidding pricesNot all projects expected to achieve financial closureBanks hesitant to lend, but coming aroundEven though local content is mandatory for C-Si technology, no such guideline for thin filmsAbout 50% projects expected to use thin film technologyNo company yet in the polysilicon and wafer manufacturing in Indiawww.eai.in

40. Real Status of Solar PV / CSP industry in IndiaPolicy – GujaratAllotted about 1200 MW of projects

41. Only 100 MW expected to come online by December 2011

42. No local content requirementPolicy - OthersRajasthan has announced policy

43. Maharastra enforcing RPOswww.eai.in

44. Real Status of the Solar PV / CSP Industry in IndiaPV ManufacturingModule capacity at about 1.4GW, expected to increaseCell capacity at about 800 MW, expected to cross 1 GW soonNo inverter company in IndiaEPCMany global EPC majors like Juwi Solar, Gehrlicher Solar have set up Indian subsidiariesIndian infrastructure/EPC companies also diversifying into solar – like L&Twww.eai.in

45. Indian Power HierarchyGoIMinistry of PowerStateMinistry of New & Ren EnergyCentral Electricity AuthoritySNACERECwww.eai.in

46. Other Organizations and Apex BodiesIREDA – Indian Renewable Energy Development AgencyPower Finance CorporationRural Electrification Corp.State Renewable Energy Development Agencieswww.eai.in