The need for off-grid Power

According to the International Energy Agency, about one third of India’s

population lacks access to electricity. High cost associated with grid

extension is the primary reason for lower electrification rates in rural India.

Most of rural India is dependent on biomass for fulfilling its energy needs.

However, burning biomass comes with several hazards to personal health

and the environment.

In July this year, three of India’s regional power grids, the Northern, Eastern

and North-eastern grids, collapsed due to overdrawal by States. This has

brought additional attention to the need for reducing dependence on

conventional sources of energy. Off-grid renewable energy applications

present a viable alternative for mitigating the country’s energy risk in the face

of fuel scarcity.

HORIZONS

agneya

Off-grid Power

Off-grid renewable power projects using wind energy, biomass energy, hydro

power and hybrid systems are being established in the country to meet the

energy requirements of remote locations which are not likely to be electrified

in the near future.

29 August, 2012

Source: CIA World Factbook

Per capita electricity

generation in India has been

low compared to other

countries and has also grown

at a slower rate in the past

decade. With the economy

expected to grow faster than

the developed countries, this

disparity needs to be bridged

using a suitable mix of

conventional and renewable

technologies.

0.4 0.5 0.6

1.8 1.8 2.2

0.9 1.5 2.6

13.1 13.0 13.1

2000 2005 2011

Electricity Generation (MWh per Capita)

India Brazil China US

Volume 2 Issue 5

2

Financing

Commercials

Technology

Renewable technologies for off-grid solutions

In rural India, energy is mainly required for cooking, lighting and agricultural

activities. Biomass is the main source of energy due to easy availability. To

reduce negative impacts of biomass and to increase the production of

renewable energy, the Government has implemented several programmes.

For example, the National Programme on Improved Chullahs where more

than 3 crores high efficiency Chullahs have been distributed to replace

conventional ones. Biomass gasifier technology is being used for electricity

generation.

Off-grid RE capacity

Around 87% of the off-grid

installed capacity in the

country comes from biomass

(including Waste to Energy).

Solar PV installations have

increased rapidly from just 4

MW by 31st January last year

to 97 MW as of July 2012.

Installations of Aero-

generators and Hybrid

systems have also doubled

since. Falling prices of

photovoltaic cells in the last

two years have increased the

viability of solar energy

projects.

106

396

153

297

Installed Capacity (MW)

Waste to Energy

Biomass(non-bagasse) Cogeneration

Biomass Gasifiers

Aero-Generators/Hybrid systems

SPV Systems (>1kW)

With the advent of solar hybrid systems,

urban India too is catching up. In these

systems, solar PV modules charge the

battery during day time while during

monsoon WEGs charge the battery.

Although current installed capacity of

these systems is very low, it is expected

that these systems will grow in areas with

good wind potential.

Source: MNRE, July 2012

849

1651

2009 2012

Aero-Generators/Wind hybrid

Cumulative installed Capacity (kW)

Renewable Energy Certificates for off-grid projects

Falling cost of solar energy has stimulated many entrepreneurs who are

trying to develop scalable and replicable models for deploying solar energy

in various applications. Mera Gao Power is one such example. It operates

micro grids by installing solar PV panels and then transmits energy to

houses who pay about Rs. 40 to connect, with costs thereafter about Rs. 25

per week.

In a recent meeting of the Forum of Regulators, a new model for

incorporating RECs to encourage off-grid energy generation was endorsed.

It has been suggested to the CERC to modify existing regulations to

incorporate off-grid installations. This can give a big impetus to off-grid

installations in the country – we can expect many entrepreneurs taking

interest in setting up off-grid projects. If this happens, we can hope to see the

Gandhian model of self-reliance become a reality in the energy sector.

Source: MNRE

REC Trade August 2012

Buy Bids Sell Bids Volume Traded Clearing Price Rs. per REC

Non-Solar

IEX 248,168 568,097 248,168 1,500

PXIL 35,150 59,213 25,725 1,555

Solar

IEX 1,728 310 129 12,850

PXIL 603 250 250 12,850

25

46

96 106 112

172

206 200

71

169

236

158

274

-

500

1,000

1,500

2,000

2,500

3,000

3,500

-

50

100

150

200

250

300

Aug 2011

Sept 2011

Oct 2011 Nov 2011

Dec 2011

Jan 2012

Feb 2012

Mar 2012

April 2012

May 2012

June 2012

July 2012

August 2012

IEX and PXIL Whole Volume Trade in Thousands Price at IEX (RHS) Price at PXIL (RHS)

3

REC Market in August 2012

RE Newsletter

Traded Volume touches new High

The REC trade in August 2012 recorded the highest volume ever transacted in the

REC Markets to date. At 273,893 certificates, the volume of Non-solar RECs traded

was 14% higher than the previous high in June this year. Prices however dropped to

Rs.1500/- with supply far outstripping demand.

REC Inventory

Source: REC Registry

REC inventory reaches

record high

With highest ever RECs issued in

the month, REC closing inventory

reached a new high in August

2012.

Whereas, sell bids in this month

were almost half of the sell bids

in the entire last year, buy bids

were only about one tenth of the

total buy bids last year.

While the Government has

successfully incentivized sellers

of RECs, further effort needs to

be made to enforce compliance

of RPO.

3,97,941

5,67,220

4,43,172

2,73,893

REC Inventory Aug 2012

agneya

287

113

172

384

271

149

93

158

73

335

106

250

62

0

500

1000

1500

2000

2500

3000

3500

0

100

200

300

400

500

600Capacity Registered, MW

Cum. Registered till Date(RHS) Registered

State-wise Registered

Capacity, April 2012 to

date

State MW Tamil Nadu 310 Maharashtra 206 Gujarat 135

Karnataka 102 Madhya Pradesh 21 Uttar Pradesh 20

Rajasthan 17 Chhattisgarh 12 Himachal Pradesh 3

Punjab 0 Uttarakhand 0 Kerala 0

J&K 0 Haryana 0 Total 826

Source-wise Registered

Capacity, April 2012 to

date

Source MW Wind 664 Biomass 82 Bio-fuel cogen 58

Solar PV 18 Small Hydro 4 Total 826

4

Trade value touched Rs. 41 Crore in August 2012. In total, 61.85 MW of capacity

was registered in August, taking the cumulative capacity registered in FY2012-13

to 826 MW.

agneya

Agneya is promoted by alumni of IIM Ahmedabad and IIM Bangalore. We provide services in the following areas –

Renewable Energy – advising clients on the best possible portfolio of renewable energy (wind, solar, bio) across tariff regimes,

technology options, electricity sales structuring and availing incentives like REC and GBI.

Renewable Energy Regulations – advising clients on regulatory aspects of electricity market, options for realizing the maximum

value from their energy assets and minimizing costs related to regulatory compliance including addressing RPO.

Carbon & Energy – measuring carbon footprint, current/future energy profiling, and setting up energy management systems to

assess risks and opportunities related to energy security and climate change.

Sustainability – building robust long term foundations for business i.e. managing economic, environmental and social aspects of

business. These include establishing sustainability management framework and reporting as per GRI guidelines.

For further information on Renewable Energy Certificates or other services, please contact us at –

E-mail – rahul@agneya.in | Phone – +91-20-41203800, +91-88 06 07 07 83 | Website – www.agneya.in

Source: REC Registry