8/9/2019 2.2. Policy Evaluation and PS Perspective Wind Energy in India by V. Subramanian

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Policy Evolution & PrivatePolicy Evolution & Private

Sector PerspectiveSector Perspective

Presentation by:Presentation by:

V. SubramanianV. SubramanianCEO & Secretary GeneralCEO & Secretary General

InWEAInWEA

The views expressed in this presentation are those of the presenter and do not necessarily represent those of the Asian Development Bank.

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Policy Mechanisms

All over the world there are policysupport mechanisms for wind powerdevelopment

Production Tax Credits Renewable Portfolio Standards

Feed in Tariff Mechanism

Preferential Tariffs

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Wind Energy Development

IndiaWind Power Potential in excess ofWind Power Potential in excess of45,000 MW45,000 MW11000 MW set up by March 201011000 MW set up by March 2010Power and energy shortages, RPSPower and energy shortages, RPSregime the main drivers for windregime the main drivers for windprojectsprojectsHigh industrial tariff is anotherHigh industrial tariff is another

Freezes energy cost over a time horizon of20-30 years

Modular can be set up on scales of 1-200

MW Short gestation period - 200 MW in sixmonths

No uncertainties associated with fuel and itsprice

No fuel linkage, no fuel supply infrastructure

reasonreasonA target of 10,500 MW of capacityA target of 10,500 MW of capacityaddition from wind has beenaddition from wind has beenproposed till 2012 for the 11thproposed till 2012 for the 11thfive year plan of the Governmentfive year plan of the Governmentof India.of India.

Clean energy with no adverseenvironmental effects

Additional revenue stream from CDM

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Policy framework forRenewables in India

Started as demonstration projects in the1980s

Captive Models started in the early 1990s i i i i h i 1

Electricity Act 2003 provides legal framework ERCs to lay down RPSs ERCs to fix tariffs

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ImplementationState Percentage to be

procured fromrenewable

Year

Tamil Nadu 13%, 14% 09 -10, 10-11

Maharashtra 3% - 6% 06-07 to 09-10

Karnataka 10% 08-09 to 10-11

An ra Pra es 5 09-10 to 13-14Rajasthan 4.8 9.5% 07-08 to 11-12

Madhya Pradesh 10% till 11-12

Kerala 3% till 2009

Andhra Pradesh 5% Till 13-14West Bengal 2%- 10% 08-09 to 11-12

Gujarat 2% 08-09

Applicability on Consumption

Enforcement Mechanism

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ImplementationState Wind tariff

Rs/kWh USD/kWh

Andhra Pradesh 3.50 .078

Gujarat 3.56 .079

. .

Kerla 3.14 .069

Madhya Pradesh 4.35 .096

Mahahrashtra 3.50 .078

Rajasthan 4.28 .095Tamil Nadu 3.39 .075

Different Benchmarks and methodologies

Assumed 1 USD = 45 Rupee

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India

Ker al a

1. 0

Madhya P r adesh

16 . 2

Andhr a Pr adesh

13. 6

Kar nataka

145 . 6

Gujar at

297. 5

T ami l Nadu

602 . 5

Installed capacity Mach 2010

Source :MNRE

Ma har ashtr a139 . 1

Rajasthan

349 . 6

Andhra

Pradesh, 136.0

Rajasthan

1088.0

Kerala, 28.0

Madhya

Pradesh, 29.0

Karnataka

1473.0

Gujarat1864.0

Tamil Nadu

4907.0

Maharashtra

2078.0

Capacity Addition 2009-10

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Policy and Legal Issues

Enforcement Mechanism for RPS Perception that Renewables are more

ex ensive

Perceived burden of developingrenewables is on the renewable richstates

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Policy and Legal issues

Introduction of Renewable EnergyCertificates CERC notified the REC regulation

Two states have notified REC regulation Maharashtra and Gujarat

Others are under process

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Private Sector Role

Investment of over 95% by privatesector

16 Manufacturers of Wind Turbines now

in India Generation Based Incentive to

Encourage IPPs

Private Sector bullish then ever before

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Various Options for

Investors Wind power for captive use with only wheeling charges.

Wind power to be sold to utilities with benefit ofaccelerated depreciation at rates approved by ERCs(through PPAs).

Wind power to be sold to utilities with generation basedincentives (without accelerated depreciation) (throughPPAs).

Wind power to be sold to utilities at the averagepurchase rate of power and trading of RECs(Renewable Energy Certificates).

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Centre for Wind EnergyTechnology (C-WET)

Research & Development Wind Resource Assessment

Testing Services Certification Services

Training

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Indian Renewable Energy

Development Agency (IREDA)Incorporated on March 11, 1987 as a Public Limited Government

Company.

MissionBe a pioneering, participant friendly and competitive institutionfor financin and romotin self sustainin investment in ener

generation from renewable sources, energy efficiency andenvironment technologies for sustainable development self-

Objectives

Operate a revolving fund for promoting and developing New and

Renewable Sources of Energy (NRSE) Assist in rapid commercialisation of NRSE

Assist in upgradation of NRSE technologies

Promote energy efficiency and conservation

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Thanks !

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The Electricity Act 2003 Section 3 of EA 2003: National

Electricity Policy and Plan including optimalutilization renewable sources of energy

Section 4 of EA 2003: national policy

perm ng s an a one sys em nc u ng those based on RE sources of energy) forrural area.

Section 61 of EA 2003: The appropriatecommission while determination of tariffshall beguided by promotion of co-

generation and generation of electricityfrom RE

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The Electricity Act 2003

Section 86(1) The State Commission

shall discharge the followingfunctions, namely:(e) promote cogeneration and generation

of electricity from renewable sources ofenergy by providing suitable measuresfor connectivity with the gridand sale of

electricity to any person, and also specify,for purchase of electricity from suchsources, a percentage of the totalconsumption of electricity in the area ofa distribution licensee;

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National Electricity Policy ..there is an urgent need to promote

generation of electricity based on suchsources of energy 5.12.1

Progressively the share of electricity

rom non-conventiona sources wou neeto be increased as prescribed by StateElectricity Regulatory Commissions

5.12.2

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National Electricity Policy Such purchase by distribution companies

shall be through competitive biddingprocess. Considering the fact that it willtake some time before non-conventional

ec no og e compe e, n erm o co ,with conventional sources, the Commissionmay determine an appropriate differentialin prices to promote these technologies 5.12.3

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National Tariff Policy Section 6.4: step by step

introduction of competition Preferential tariff It will take some time before non-conventional

technolo ies can com ete with conventional

sources in terms of cost of electricity.Therefore, procurement by distributioncompanies shall be done at preferentialtariffsdetermined by the Appropriate

Commission Competition within same technology

Competition within renewables

Competition with other sources

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