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Atul Shah Atmay Advisors. atulshah48@gmail.com +919970396160

IRED 2014 Kyoto

Overview of India renewable energy policies And

R & D programs.

Contents

• Indian energy at Glance and Demand Growth

• Energy Resource map and RE potential

• Current Tariffs, RPO & New Policies

• Expected RE projects and Future energy mix

• Plans to mitigate effects of Variability & Intermittency of increased RE penetration

• R & D efforts

• Acknowledgements & Abbreviations

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Population 1.25 Billion

Total Generation

253 GW

Conventional 221 GW

Renewables 32 GW

Per capita KWh 941 kWh

% of Population without electricity

33% Rural & 6% Urban

Peak Demand* 148 GW

Shortage 4.5% peak & 4.2% energy

Projected Growth Rate

9% Annum

T & D losses 24%

As on 30th Sept2014

Source: PGCIL India 3

Source: PGCIL India 4

• There is a direct correlation of energy

consumption and economic growth of a

society / country. • New Elected Govt announces Power 24 x 7 for all by 2019 and per Capita consumptions to go up to 1100 kWh. Energy is the prime mover in development process

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THE CHALLENGE

• India is facing formidable challenges in meetings

its energy needs and providing adequate energy of

desired quality in a sustainable manner and at

reasonable & affordable costs.

• Govt is addressing all forms of energy

– conventional,

– wind ( including off shore)

– Solar ( both Grid connected & off Grid )

– Bio mass

– Nuclear

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THE CHALLENGE

• In view of the urgency the easiest option is RE, in

particular wind and solar due to

– its abundant availability

– short gestation period,

– creating employment opportunities

– can help a lot in reducing T & D losses

• The peculiarities of RE viz, variability,

intermittency & location specificity are well known

and will be dealt with but plans are in place too

but we have still not reached those levels of

penetration.

Installed capacity –Sept 2014

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GW %

Thermal 174.9 69.3

Hydro 40.8 16.2

Nuclear 4.8 1.9

RE 32.1 12.7

Total 252.6 100

GW %

Wind 21.99 68.5

Solar 2.6 8.1

Bio mass 3.7 11.5

Samll Hydro 3.8 11.8

Total 32.09 100

21.99 2.6

3.7 3.8

MW

Wind

Solar

Bio mass

Samll Hydro

GW

Thermal

Hydro

Nuclear

RE

Off Grid installations

• 2 million decentralized solar applications & over 8.1 mil sq mts of solar WH systems, solar pumps, Solar lanterns, Street lights & almost 1 mil home lights amounting to 200 MWs.

• 4.74 million bio gas plants.

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Indian Power Grid

Frequency deviation now permitted within 49.90 Hz to 50.05 Hz

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Source: PGCIL India 10

Indian Power System - A Glance

• The Installed capacity is required to be doubled in next Decade & quadrupled in next 2 decades if we have to reach reasonable level of Per Capita Consumption • Electricity for all by 2019

Source: PGCIL India

Future Demand Projections

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Source: PGCIL India 12

We have Wind on western coast starting from South, TN, Kar, AP, MH, MP, Guj and Raj. Solar In Gujarat, Rajasthan, MP and Leh-Ladakh with highest potential Small Hydro in Uttaranchal & Himachal

Source: PGCIL India 13

• Wind potential is concentrated in southern, western and north-western regions

• CWET/ NIWE has assessed the total wind energy potential in the country is 102 GW @ 80 mt hub height.

• Now further reassessment @ 100 mt hub height is under way which will open up further potential in wind

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Wind Resource Map

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Current wind tariff

17 * Area specific

** Wind zone specific

States

Tariff / kWh

Period STOA / kWh

LTOA / MW/ mth

Losses Power Evacuation costs

¥ /cents USD Years ¥ /cents USD ¥ '000/ USD %

AP 8.8/7.7 25 0 0 3

To be borne by Investors

GUJ 7.8/6.8 25 0.06/4.9 166.7/1452 4.1

KAR 7.9 10 /20 0.37/32.6 178.5/1556 3.94

RJ 10.5/11.1- 9.2/9.7*

25 0.09/7.9 274.2/2390 4.2

TN 6.6/5.7 20 0.19/16.3 131.6/1147 4.5 Partially Reimbursed

by STU MH 7.3/10.7- 6.4/9.3**

13 0.67/58.7 470.1/4096 4.85

MP 11.1/9.6 25 0.13/11.4 206.5/1800 3.5 done at MV

Punjab 10.9/9.5 25 0.36/31.0 110.2/961 2.5

Current Solar tariff

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However now the competitive bidding has brought down the current prices to approx. ¥ 10.3/ 9.0 USD cents/ kWh

States PV CSP Roof Top

¥ /cents USD ¥ /cents USD

LCOE ¥ /cents USD ¥ /cents USD

AP 12.1/11

GUJ 17.4/ 15 15/13 27/14-24/13

KAR 10.3/ 9 20.4/18 17.9/16

MH 12.7/11

MP 12.1/ 11 23.7/21

Orissa 13.1/11 18/10-16/9

Punjab 13.5/12 13.0/11

RJ 12.1/11 12.4/11 21.3/18

TN 12.1/11 11.7/10 15.6/14

Status of RPO & REC in India

•The NAPCC program targets 15% share of RE by 2020 in total electrical energy. •All states have mandated

RPO, that varies from 3% to 10% & increasing every year Many obligated entities from both public and private sector have started purchasing the RECs to meet their RPO norms. • Likely introduction of

uniform RPO across country

7.30%

6.25% 6.0%

8.5%

10%

4.75%

8.95%

4.39%

5.4%

5.45%

4.0%

6.0%

4.6% 3.00%

10%

4.75%

3%

.60%

5.8%

3.37%

5%

4%

5.0%

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New Policies Introduced by New Govt.

• Accelerated depreciation Re introduced for wind (15+15 GW for W+S by 2017 or GBI of Rs.0.5/ kWh (1 / 0.9 ) with a ceiling of 10 Mil INR (1.83 mil ¥ / 16.3K USD) over 10 years for non AD investors like IPPS

• 10 yrs. tax holidays under sec 80 i (A) for installation up to Mach 2017

• REC to be more vibrant. Process has begun to change the tariff so that RPOs are met.

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• Capital Subsidy for roof top solar up to 30% of capex by SECI ( 20+ 5+5%). 125 MW of roof top solar projects have been allocated

New Policies Introduced by New Govt.

• Customs duty Reduction

– for components and raw material used in manufacture of Wtgs

– No anti Dumping duty on import of PV panels

• Reduction In Excise duty

– for machineries & equipments for manufacture of PV Panels

• > 50 GW can not happen with subsidy. So the focus is on manufacturing in India

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New Policies Introduced by New Govt.

• Debt / Equity Ratio improved to 75:25 and loan for longer duration

• NCEF to provide low cost financing

• Clean energy cess increased to Rs 100 ( USD 1.7) per ton

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• financing - Apart from balance sheet financing • pre financing to EPC contractors, • mezzanine financing with an option to convert debt in to equity at a later date through convertible bonds • Pool financing for investors in multiple projects

• Expenditure of 2% mandatory CSR under companies act 2013 in RE projects is permitted

New Policies Introduced by New Govt.

• IREDA ready for wind solar Hybrid as well as repowering old sites with higher capacity wtgs.

• Govt Of India is mandating PSU for setting RE projects with consortium of BPCL( Bharat Petroleum), HPCL ( Hindustan Petroleum), ONGC ( Oil & Natural Gas), NSCI ( national Solar Corporation, & IREDA

• Power being concurrent subjects each states are revising their own policies, to attract more investments in RE projects.

• Various Bilateral aid from Japan, USA, Germany, Australia and Korea

• MNRE has signed agreement with NEDO for Telecom towers to be powered by RE with Li-ion batteries.

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New Policies Introduced by New Govt.

• NWEM ( National Wind Energy Mission) under Govt approval

• MoEF reduction in compensatory forestation land from 50% to 33% and delinking clearance from National wildlife board.

• Delegation of power to Regional empowerment committees for faster clearance of RE projects

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New Policies Introduced by New Govt.

• MOU has been signed between MNRE, NIWE ( national institute of wind energy), NTPC, PGCIL, IREDA, PFC, & GPCL for first 100 MW off shore on coast of Gujarat up to 12 nautical miles. It is planned to be commissioned by 2020 and future plan for 10000 MW

• 4 major UMSPPs in Rajasthan( 4GW), Gujarat (4 GW) Kargil ( 2GW) & Ladakh ( 5GW) are planned and Bidding process has started in Rajasthan

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Almost 30 GW by 2017 198 GW By 2030 is planned

Source: PGCIL India

Green corridor is Planned Work has already begun.

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Source: PGCIL India 27

Renewable Capacity Mix

• Wind which constitutes almost 72 % of RE and Solar is 8%

• This mix is likely to change to almost 45% wind and 45% solar by 2017.

Source: PGCIL India 28

Likely Energy Mix & Issues with Grid Operations

Source: PGCIL India

They are Connected at remote concentrated locations with weak transmission network provide lesser MVAR support to grid during system disturbances. Almost 65- 70 % in terms of MW wtgs does not LVRT capability & wind farms do not have DVR or STATCOM (FRT ) capability which may lead to collapse of large chunk of RE generation during the Recovery of the system from transient fault.

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Plans to more Integration of RE

• Comprehensive Plan for next 5 /10/20 years for pan India with that of STUs & CTU for Strengthening transmission lines

• pilot project, MNRE also has issued EOI for storage.

• Green energy corridor & REMC

• Incentives for Off-grid / Micro Grid

• Energy Storage - CTU is finalizing first

• Solar Wind Hybrid

• Smart Grid Projects & Smart cities

• Green Buildings & Energy Conservation

• Other RE such as Biomass, Small Hydro

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Green Energy Corridors- Estimated Investments

32 Source: PGCIL India

Work has already begun on this in North west & south where congestion is maximum & RE potential is very high

• Intra State transmission - US $ 4.12 Bn

• TN : US $ 1.03 Bn; AP : US $ 0.5 Bn.;

• Kar : US $ 0.2 Bn; Guj : US $ 0.5 Bn;

• MH : US $. 0.5 Bn.; Raj. : US $. 1.0 Bn;

• HP : US $.0.13 Bn;

• J & K : US $. 0.03 Bn

• Inter State Transmission - US $ 3.77 Bn

• Other Infrastructure - US $ 0.74 Bn

(Dynamic Reactive Compensation, Real Time

monitoring System, Energy Storage etc.)

• Establishment of REMC - US $ 0.05 Bn

Total - US $ 8.7 Bn

Renewable Energy Management Center

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Part of Green corridor and Work has already started

PUDUCHERRY • The pilot project is successful and full scale implementation is in

progress

Smart Grid/ cities Initiatives

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Smart Grid & Smart cities

• Plans to implement in : – Guwahati -Assam – Hyderabad –Telengana – Mysore – Karnataka – Raipur- Chhattisgarh – Jaipur- Rajasthan – Baramati- Maharastra – Amritsar- Punjab – Agartala –Tripura – Naroda, Deesa- Gujarat – Panipat- Haryana – Siliguri – West Bengal

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The Purpose is to have more RE & consume it as much as locally & geographically spread out. 100 Smart cities and planned

Green Buildings & energy conservation

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• India ranks third on USGBC after Canada & China out side USA. LEED has certified approx 12 Mil GSM out of total certification of 67 Mil GSM .

• Bureau of energy efficiency now has launched Design Guide lines for energy efficient multi story residential buildings

• Star ratings for DG sets and Hospital buildings.

• With rapid increase of RE use, and the convergence of IT & Building technology, the R & D efforts are on to have zero energy buildings.

Green Buildings & energy conservation

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• The new Green telecom policy mandates 50% of towers in Rural areas and 20% in Urban areas on hybrid power by 2015

• Almost 0.45 mil telecom towers consuming 3 Bil ltrs of Diesel

• Looking at saving potential of 10% in fuel costs.

R & D Plans • Rs 910 Crs in 12th plan. • C-WET – wind resources, testing, • NISE National Institute of Solar energy- Higher PV efficiency,

Auxiliary systems & losses, Solar Thermal • SSS-NIRE Sardar Swarn Singh National Institute of RE • IITs – Forecasting, PMUs, Grid modeling, Reliability studies,

– new technologies such as 1200 KV UHV AC System, +,- 800 KV DC Flexible AC transmission system,

– GIS, 765 KV equipments including transformers, reactors, Sw. grs, – High temp superconductor cables, superconducting current limiters, – large scale battery storage, – indigenous development of smart grid components

• NAL- Hybrid systems • TERI – Climate change Plans

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Thank you.

Abbreviations • AD – Accelerated depreciation • RE- renewable energy • T & D – transmission & distribution • CWET - center for wind energy testing station • CSR – Corporate social responsiblity • CTU – Central transmission utility • GBI- Generation based incentive • GPCL – Gujarat Power corporation ltd • IREDA- International Renewable Energy Development Agency • LTOA – Long term open access • LCOE – Levalised cost of energy • MNRE – Ministry of New Renewable Energy • MOEF – Ministry of Environment & forest • NCEF – National Clean energy fund • NIWE - national institute of wind energy • NTPC- National Thermal Power Corporation • NAPCC – National action plan on climate change • PFC – Power finnace corporation ltd • PGCIL – Power grid corporation of India Ltd • POSOCO- Power system operation corporation ltd • RPO – Renewable purchase obligation • REC – Renewable Energy Certificate • SECI- Solar Energy corporation of India • STOA – Short term open access • STU- State transmission utility

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• Sincere Thanks to my Ex – Colleagues at Suzlon ltd Mr. NSM Rao, Chintan Shah

• Senior officers from PGCIL, MNRE POSOCO, IREDA

• The Data has been compiled from PGCIL, MNRE, IREDA and other Govt. publications

Acknowledgements

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AP Andhra

GUJ Gujarat

J & K Jammu & kashmir

Kar Karnataka

Ker Kerala

MH Maharastra

MP Madhya Pradesh

Raj Rajasthan

TN Tamilnadu

UP Uttar Pradesh

Abbreviations of states of India

Structure of Power Industry

As per Indian Constitution Power is a concurrent subject

Central Power Generating Company

• NTPC, NLC

• NHPC, NEEPCO

Central Transmission Utility

• PGCIL

• POSOCO / NLDC /RLDCs

Private Power Generators

• UMPP / IPPs

• Merchant Power Plants

State Power Generating

Company

• GENCOs

State Transmission Utility

• TRANSCOs

• SLDCs

State Power distribution company

• DISCOMs / Pvt Licensee

Independent Private Transmission company

• IPTC 42

Regulatory Structure in India

Forum

of Regulators

Regulation of Central Utilities both generating and

Transmission, UMPP and Inter state ITPC in Tariff &

Operations / Disputes

Regulation of State Utilities, GENCO,

TRANSCO, DISCOM & intrastate IPTC in Tariff &

Operations / Disputes

Appellate Authority

Central Electricity Regulatory

Commission

State Electricity Regulatory Commission

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NLDC

Jurisdiction of Load Dispatch Centers

NLDC: Apex body to ensure integrated operation of National Power System

RLDC: Apex body to ensure integrated operation of power system in the concerned region, Co ordinates, ISGS & CTU

SLDC: Apex body to ensure integrated operation of power system in a state, Coordinates GENCOs, IPPs, STU, Discoms & Transmission & distribution licensee.

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5

44

POSOCO

Source: PGCIL India

Installed capacity -As on 31st March 2014 St

ate

s

States' own resources

Share of

Central Sector

Total Conventional

Wind as on 31st Mar. '14

Other RES

Total RES

Total Capacity

% of wind in

Total capacity

% of wind in

RE capacit

y

Thermal Hydro Total

Conventional capacity

GW GW GW GW GW GW GW GW GW

AP 9.3 3.7 13.0 3.2 16.2 0.7 0.0 1.3 17.5 4.3% 58%

GJ 18.8 0.8 19.6 3.6 23.2 3.5 0.0 4.2 27.4 12.6% 82%

KN 5.0 3.6 8.6 1.7 10.3 2.3 0.0 3.7 14.0 16.6% 63%

KER 0.4 1.9 2.3 1.4 3.7 0.0 0.0 0.2 3.9 0.9% 19%

MP 6.9 1.7 8.6 4.3 12.9 0.4 0.0 0.6 13.6 3.1% 66%

MH 19.3 3.3 22.6 6.6 29.2 4.1 0.0 4.8 34.0 12.0% 86%

RJ 7.2 1.0 8.2 2.4 10.6 2.8 0.0 3.5 14.1 19.7% 80%

TN 6.8 2.2 8.9 4.2 13.1 7.3 0.0 7.9 21.1 34.5% 92%

WB 6.7 1.0 7.7 1.2 8.8 0.0 0.0 0.1 9.0 0.02% 1%

Other 34.9 11.0 45.9 39.5 85.4 0.0 3.1 3.1 88.5 0.00% 0%

Total 115.3 30.2 145.4 68.1 213.6 21.1 0.0 29.5 243.0 8.69% 72% 45