vibrant gujarat - renewable energy sector profile

Renewable Energy and Technologies

SECTOR PROFILE

1. India – Preferred Investment Destination

2. Gujarat – Preferred Investment Destination in India

3. Renewable Energy and Technologies

3.1. Global scenario

3.2. Indian scenario

3.3. Gujarat scenario

3.4. Success stories

3.5. Scenario in Gujarat by 2020 and investment opportunities

4. Advantage Gujarat

5. Doing Business in Gujarat

6. Key Government Agencies

Table of Contents

INDIA - PREFERRED INVESTMENT DESTINATION

101

INDIA - PREFERRED INVESTMENT DESTINATION

9th largest economy in the world by nominal GDP and 3rd largest by purchasing

power parity (PPP)

Recorded the highest growth rates in the mid-2000s

One of the fastest growing economies in the world (GDP growth rate – 8.6% in 2011)

GDP growth rate

Sectors’ contribution to GDP

India is one of themajor G-20 economies:

ththe 17 largest exporter andth11 largest importer in the world

Main Export Partners

ndThe 2 preferred global investment destination

(World Investment Prospects Survey 2010-2012 by UNCTAD)

USD 254 billion of FDI inflows between April 2000 and

March 2012

Main Import Partners

US 13%

UAE 12%

China 8%

Hong Kong4%

China12%

UAE 7%

Saudi Arabia6%

US6%

Australia5%

FDI Confidence Index, 2012A.T. Kearney Survey

FDI - Top Sectors

9.5% 9.6% 9.3%6.8% 8.0% 8.6%

0.0%

5.0%

10.0%

15.0%

2006 2007 2008 2009 2010 2011

1.52

1.52

1.6

1.73

1.87

0 0.5 1 1.5 2

Germany

US

Brazil

India

China

Services30%

Telecommunications12%

Computer softwareand hardware

11%

Real estate11%

Constructionactivities

10%

Power7%

Automobile industry

6%

Metallurgical industries

5%

Pharmaceuticals5%

Petroleum and natural

gas3%

No Change

Decline

Growth

- 200 400 600 800 1,000 1,200

Agriculture Industry ServicesUSD, billion

16%

17%

17%

18%

19%

20%

25%

26%

26%

26%

25%

26%

59%

58%

57%

56%

56%

54% 2006-07

2007-08

2008-09

2009-10

2010-11

2011-12(A)

(Q)

Trade Scenario, USD billion

0

50

100

150

200

250

300

350

400

1990-91 1994-95 2000-01 2004-05 2010-11

Export Import

CAGRExports

14%

CAGRImports

14%

02

World's largest democracy with1.2 billion people

Land of abundant natural resources and diverse climatic conditions

Enabling business environment with greater global participation

Strong Market Fundamentals

Access to technology as a result of the IT revolution

Impetus on Infrastructure Development

Progressive simplification and rationalization of direct and indirect tax structures

Competitivelypriced skilledlabour

ADVANTAGE INDIA

03

GUJARAT - PREFERRED INVESTMENT DESTINATION IN INDIA

204

Gujarat’s Degree of Openness (ratio of exports from state to Gross State Domestic Product)

53%

A highly industrialized state - Gross State Domestic Product contribution from manufacturing sector

28%

Growth in agricultural output in the state over the last 10 years 11%

Double digit growth rate with Gross State Domestic Product of USD 75 billion(2010-11) growing at a five year average of

10%

26%A state with one of the highest share in investments under implemented projects in India

A state with a high and growing literacy rate 79%

Increase in seat availability in technical institutions over last 3 years 100%

A state with a population of 60 million and one of the highest urbanization levels 43%

GUJARAT HAS BEEN RANKED 1ST AS PER THE “ECONOMIC FREEDOM RANKINGS FOR THE STATES OF INDIA, 2012” REPORT

05

RENEWABLE ENERGY AND TECHNOLOGIES

306

RENEWABLE ENERGY AND TECHNOLOGIES GLOBAL SCENARIO

3.1India

07

GLOBAL RENEWABLES

Solar (Continents)WindBiomassGeothermalOcean & WaveHydro

CoalGasOilNuclearPrimary EnergyConsumption

Global AnnualEnergy Consumption

Annual SolarIrradiationto the Earth

Established global resourcesvs renewable resources

• Enough renewable energy resources available to satisfy World’s energy demand

• Solar energy alone could meet existing global energy needs 10,000 times over

• International Energy Outlook 2011 forecasts energy consumption growth by 53% between 2008 and 2035.

• It is expected to reach 770 quadrillion Btu

World Energy Consumption 1990-2035, (quadrillion Btu)

0

100

200

300

400

500

1990 2000 2008 2015 2020 2025 2030 2035

OECD Non-OECD

• Total renewable power capacity in the world (excluding hydro) amounts to 312 GW

• Renewable energy share (non-hydro) of global electricity production is 3.3%

• India accounts for 5% of the global renewable electric power capacity

Renewable Electric Power Capacity, GW, 2010

Wind power Biomass powerSolar PV Geothermal powerSolar thermal power Tidal power

0

100

200

300

400

World USChina

GermanySpain India

Others

1. United States 2 China 3 Germany 4 Spain 5 India

Top 5 countriesRE capacity, 2010-11

08

Source: REN21., 12th PwC Annual Global Power & Utilities Survey

DRIVERS OF GLOBAL RE MARKET DEVELOPMENT

Source: REN21., 12th PwC Annual Global Power & Utilities Survey

Focus onsustainabilityand lowering

environmentalimpact

Continuedgrowth in

energydemand

Technologicalprogress

driving downcapital cost

Energydependenceand energy

security

Stakeholderpressure for

environmentalaction

Forces driving development ofrenewable energy market

12th PwC Annual Global Power & Utilities Survey – Cleaner energy perspectives

• A major ramping-up of non-hydro renewables by 2030

• 43% is the forecast share of non-fossil fuel in generation by 2030

• Energy Security, energy from clean and sustainable sources, market competition and energy infrastructure are the main issues of the power market

• Commitment to a 20:20:20 a m b i t i o n ( E U ) o f 2 0 % emissions reduction, 20% renewable energy and 20% improvement in energy efficiency by 2020

Select indicators of RE development

Global new investment in renewable energy (annual) USD 130 211

Solar PV cell production (annual) GW 6.9 24

Ethanol production (annual) billion litres 67 86

Biodiesel production (annual) billion litres 12 19

Countries with policy targets # 79 98

Countries with feed-in policies # 71 87

market Unit 2008 2010

billion

09

INDIAN SCENARIO


3.210

RENEWABLE ENERGY – GROWING SHARE IN FUEL MIX

Source: MoP, MNRE

Pressure on availability and cost of primary fuels due to growth and

climate change actions are the key drivers

RE market is now seeing a slow but definite

convergence

Renewable sector is dominated by private sector

and moving towards IPP scale producers

70%

14%

5% 9%

0.3% 2%

Renewable capacity, MW

Wind PowerSmall Hydro PowerBiomass PowerBagasse CogenerationWaste to PowerSolar Power (SPV)

131,603 , 66%

4,780 , 2%

38,990 , 20%

24,503 , 12%

India installed capacity mix, MW

ThermalNuclearHydroRES

• India has an installed renewable capacity of 24,500 MW (excluding large hydro) as on March 2012

• Renewable energy is 12% in total capacity and 4% of energy generation.

• By 2050 69% of energy generation will be from renewable energy (Greenpeace vision)

11

INDIA’ S RENEWABLE ENERGY OPTIONS

India possesses a large, untapped renewable

energy potential

The resource potential is large even with

current assessments

Renewable EnergyOpportunity, MW

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Tapped Potential

Wind Power Small Hydro PowerBiomass Power Bagasse CogenerationWaste to Power Solar Power

Wind Power

Most established renewable energy source in India• India possesses significant untapped potential• Strong domestic manufacturing base• Regulatory support

• • Seasonality- peaks in monsoon• Higher capital cost per unit of generation- relatively lower returns due to maturity of markets and strong discipline of wind turbine manufacturers

Small Hydro Power

(up to 25 MW)

time to commissioning• Fewer environmental or CERC clearances• Viable option for base load for perennial rivers• Regulatory support

• Require significantly lower PLFs contract sharply after the monsoon months• Relatively capital intensive and longer construction period compared to other renewable options

• Seasonality- for rain-fed rivers,

(agricultural and forestry residues)• Viable option for base load• Relatively short time to commissioning • Regulatory support

• Abundance of biomass round the year- can be a challenge, particularly for single fuel/ bagasse based plants

• Availability of quality feedstock Bio-Power (Agro

residues and plantation)

Bagasse based generation

Energy from Waste generated in India

• Large amount of waste adaptability• Fuel availability and seasonality poses challenges

• Foreign technology - requires

Solar Photovoltaic in India

• Large untapped potential compared to other sources• Expensive technology as

Geothermal• ability to manage scheduling

Long term solution and at commercial scale• Technology is yet to pick up

Grid Interactive Strengths Challenges

12

POLICIES AND REGULATIONS

• Renewable power is expected to constitute a significant part of India’s incremental capacity addition.

• A robust regulatory framework has been put in place to realize India’s wind, hydel, solar and biomass potential.

Electricity Act 2003

• Mandated State Electricity Regulatory Commissions (SERCs) to

• Promote generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person

• Fix certain minimum percentages for purchase of renewable power

National Electricity

Policy 2005

• Further provided for progressive increase in generation of electricity from renewable sources and supported purchases by distribution companies through competitive bidding process

Tariff Policy 2006

• Provided for fixation by SERCs of a minimum percentage of Renewable Purchase Obligation (RPO) from RE sources taking into account availability of such resources in the region and its impact on retail tariffs and procurement by distribution companies at preferential tariffs determined by the SERCs

National Action Plan on Climate

Change 2008

• Outlined existing and future policies and programs addressing climate mitigation and adaptation

• NAPCC has advised that starting 2009-10, RPOs be set at 5% of total grid purchase, and be increased by 1% each year for 10 years.

13

POLICIES AND REGULATIONS – NATIONAL SOLAR MISSION

• Conceived under the National Action Plan on Climate Change

• Establish India as global leader in solar power by creating favourable policy conditions

• Accelerate generation capacity addition to drive down costs and achieve grid parity by 2022

• National Tariff Policy amended (January 2011) for mandatory Solar RPOs for all power utilities

Phase 1: 2010-13

Policy framework to attract and scale-up

Grid: 1,100 MWOff-grid: 200 MW

Grid competitive solar power

Grid: 20,000 MWOff-grid: 2,000 MW

Phase 3: 2017-22

Market based on FIT mandatory solar RPO

and Grid: 4-10,000 MW Off-grid: 1,000 MW

Phase 2: 2013-17

A. 20 GW Grid based solar power projects by 2022

• Large power plants (5 MW solar PV; 5 to 100 MW CSP in NSM 1 and 5MW to 50MW solar PV in NSM 2)

100 MW rooftop and small projects

• Connected below 33 kV. Target (10 MW of up to 100kW ; and 90 MW of 0.1 to 2 MW.

B. 2000 MW off-Grid project by 2022

• Off grid solar and decentralized solar applications.

• Capital and interest subsidy; refinance by IREDA, etc.

• Other channels to supply & maintain products

C. Support projects

• Centre of excellence and incubation

• Demonstration and pilot projects

- 100 MW parabolic trough based

- 100-150 MW solar hybrid plant

- 50-100 MW CSP with storage

- BIPV projects

National Solar Mission

14

SUPPORT MECHANISM FOR RENEWABLE POWER IN INDIA

Accelerated Depreciation (AD)

• Acknowledged as the key instrument for success of

in India

• Most wind installations in India have been developed under AD.

wind industry • The sector has attained scale &

viability on its own.

commercial

Generation Based Incentives (GBI)

• Recently introduced to shift investment focus from capacity

to electricity generation – move from capital subsidies (AD) to

generation based incentive.

addition • Presents avenues for additional guaranteed

revenues for project developers

Renewable Purchase Obligation (RPO)

• RPOs are mandated by the Electricity Act 2003 and National

• RPOs adopted by 23 SERCs

Tariff Policy • Readymade market for renewable

power sources

Clean Energy Cess

• The government plans to develop these funds for

renewable energy

development of

Renewable Energy Certificates (RECs)

• MNRE and CERC have developed a REC regime which has kicked

off recently

• Serves as a mechanism to fulfill the RPO obligations thereby reducing

penalties

• Helps renewable power developers

to trade RECs and realise the value

of power

CarbonTrading

• India has largest number of registered and pipeline CDM

in the world.

• Helped to push the RE industry by making projects more financially

attractive

projects • Additional cushion for developers

to increase their project returns

and RoE

Tax Incentives - Exemptions onCapital Investmentsand Generation

• Tax exemption instruments such as exemptions or reductions on excise

and customs duty have been introduced

• Tax Incentives help improving RoE of

developer

State RE Policies

• Examples of state with policies for RE include Karnataka, Punjab, Madhya

Pradesh, Gujarat, Himachal Pradesh, Uttarakhand etc

• The number of clearances required for

renewable projects has come down

Policy Instrument Indian Experience Positives for Developer

Feed in Tariffs/ Preferential Tariffs

• Being used for all active RE technologies. introduced

except J&K, Bihar, Jharkhand, Odisha and the North Eastern states.

• Preferred by developers because it enhances project bankability

by most states • Financial as well as economic costs and

benefits of RE are not yet factored in FIT

• Technology upgradation could lead to better

returns as it is not considered in FIT

15

RENEWABLE ENERGY CERTIFICATE

• Mass market: not subject to the geographic and physical limitations

• One REC to be issued for every MWh of electricity fed to the grid and metered at the bus-bar of generator

• REC issued is valid for a period of 1 year

• Not related to Carbon Credits, both mechanisms operate independent of each other.

• Pricing of REC component:

- Sold in the exchange within a range of floor price and ceiling price as fixed by CERC from time to time

• A renewable generating entity that has:

Not entered into any PPA at a preferential tariff

- Sells its power to a local distribution licensee at a cost at or below the Average Power Purchase

Cost (excl. RE power cost)

- Sells power either to the third party or through Power Exchanges

Eligibility

Overview

REC: Operational Framework

Registration of Eligible entities (Central level agency)

Accreditation of RE power plants (State nodal agency: SNA)

Information related to accredited RE plants for registered entities sent to REC registry

Sale of electricity at par withconventional power

Discom issuing REinjection certificate

State LoadDespatch Centre

(SLDC)

RE Generator Central REC Registry (NLDC) REC exchange

Auditing Panel

SERC: Compliancebased on SNA Report

2

3

5 6

4

Informationrelated to REgeneration

Electricity Energyaccounting

Issuance of REC

Information on REC purchase/redemption

State NodalAgency (SNA)

1

16

RENEWABLE PURCHASE OBLIGATIONS

• The Government has set a target of 10% energy generation from renewable sources* by 2012

• In 2007, the Government released draft versions of a new policy which seeks to increase the target to 20% by 2020

• Several State Regulators (“SERC”) have translated this national target into Renewable Purchase Obligations (RPO)

• RPOs mandate the minimum quantum of electricity which distribution utilities in the States have to source from renewable sources (failing which, a penalty may be imposed on them)

• On a pan-Indian basis, the total RPO commitment by the 12 States that have implemented it constitutes ~5.33% of the total power consumption in 2007-08

• The RPO system passes on the onus of increasing renewable energy consumption to the State DISCOMS – effectively the cost of acquiring this renewable electricity is passed onto the consumer through higher power tariffs

* Excludes large hydro projects and nuclear power

RPO Targets* (2012)

STATE RPO UNITS SOLD)

(% OF

Andhra Pradesh 5%

Gujarat 6%

Haryana 1.5%

Karnataka 7% &10%

Kerala 3.3%

Madhya Pradesh 10%

Maharashtra 7%

Odisha 5%

Rajasthan 6%

Himachal Pradesh 11.1%

Tamil Nadu 14%

Uttar Pradesh 5%

West Bengal 3.8%

Uttarakhand 4.525%

Chhattisgarh 5.25%

17

CLEAN ENERGY SECTOR IN INDIA-WAY FORWARD

Interplay of favorable risk-return profile at project level coupled with the emerging Indian merchant power opportunity creates a positive strategic framework for Indian renewable IPP players

Project Level• Shorter time-to-commissioning than conventional power projects• Fast-track project approval- significantly fewer environmental or CERC clearances required

compared to conventional power projects• Easier to achieve financial closure vis-à-vis larger projects, Greater predictability of project

execution• Plethora of small-to-mid size units in “locally constrained” entrepreneurial setups: ideal for

consolidation play• Bidding route not mandatory for new capacities

Financial Perspectives• Low working capital requirements, particularly for small hydro and wind projects• Ability to boost returns through emissions trading options • Regulatory support, including preferential tariffs• Fiscal incentives (subsidies, grants and tax incentives) available in some States

Sustainability• Lower fuel sourcing and pricing risk compared to conventional power projects• Opportunity to de-risk asset portfolio through geographic and technological options- exposure to

multiple markets, regulatory regimes, technologies and climatic conditions• Lower social friction concerns by promoting ‘inclusive growth’• Broadening fuel base complements efforts to decouple India’s economic growth from emissions

growth and helps to achieve energy security

Fund requirement• Consolidated fund requirement estimated by MNRE (Strategic plan for new and renewable energy

sector for the period 2011 -17 is• For grid connected renewable energy technologies – USD 2.6 billion• For off grid renewable energy programs – USD 2.7 billion

18

RENEWABLE ENERGY AND TECHNOLOGIES GUJARAT SCENARIO

3.319

GUJARAT – RENEWABLE ENERGY POWERHOUSE

20.1

79.8

100.1

30.6

67.0

97.5

40.0 80.0 120.0

T&D loss (%)

PLF (%)

Collection Efficiency

(%)

2004-05 2010-11

Thermal78%

Nuclear3% Hydro

3%

Renewabl16%

es

Break up of installed powercapacities in Gujarat, May 2012

Wind81%

SHP0.2%

BIO1%

Solar18%

Break up of installed capacityfrom RE source in

Gujarat, May 2012

• Share of renewable energy in total energy mixin Gujarat is 16%

• Gujarat’s share of energy from renewable energy sources in Western Region is 44% and all India share is 14% Gujarat was power deficient

barely a decade ago, but now has a surplus power and a

vibrant energy sector

Source: EPD

The state of Gujarat is blessed with abundant renewable energy potential

Source Total Potential potential Capacity, % of(India), MW (Gujarat), MW total potential

in Gujarat

Wind 45,000 10,000 25.8%

Solar > 100,000 69,000 0.9%

Biomass 17,000 1,900 1.6%

Total RE installed Timely tariff revisions have

made the sector viable enabling the state to set up adequate

generation capacity

Gujarat’s power sector – strong performer

Uninterrupted power supply attracts companies to set

up business in Gujarat

20

WIND POWER IN GUJARAT

Over the last 25 years more than 65 sites have been

monitored for wind speed and wind power

density, and over 50 sites have been found feasible for harnessing wind power

Source: TERI, GEDA

The Centre for Wind Energy Technology, an autonomous R&D institution under MNRE, has identified and approved 40 sites for wind energy deployment with annual

average wind power density greater than 200 W/sq. m. at a 50 m height in Gujarat.

Wind Power Density in Gujarat, W/m2

The State of Gujarat with its longest coast line in the country and inland windy sites has a potential of

over of 10,000 MW wind power.

21

WIND POWER IN GUJARAT

Source: GEDA, GERC

The state, having embarked upon an ambition plan to tap the large wind power potential, achieved commendable results: total installed capacity of wind power grew from 271 MW in 2005-06 to 2,885 MW in 2011-12 at CAGR of 48%

Cumulative wind capacity in Gujarat, MW

271

2,885

0500

10001500

2000250030003500

Up to2005-06

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

CAGR48%

In November 2008 Gujarat won the Best Wind Power Developer State (Percentage

Increase) Award 2008 for achieving themaximum capacity additions during the two consequent year FY07 and FY 08 alone the coast of Saurashtra

Wind Power Policy and GERC regulatory features

Eligible Unit: Any company/corporate body/association/body of individuals

Sale: Fixed tariff

Tariff: Rs. 3.56 / kWh for 25 years

Open Access / 3rd party sale: Allowed

Land: Revenue waste land @ 1 hectare per Wind turbine generator on long term lease of20 years to the developer at a lease rent of Rs. 10,000/ha/year

Wheeling: At 66 kV: Normal charges as applicable to open accessBelow 66 kV: Normal charges as applicable to open access + 10% of generated fed to the grid

22

SOLAR POWER IN GUJARAT

Gujarat has one of the highest solar generation potential in India (solar radiation –

5.6-6.0 kWh/m2/day for 300 days

The area with the highest solar potential is the district of Kachchh with the highest direct solar insolation 6.4 kWh/sq. m. / day throughout the year and 310 sunny days.

It covers a total area of 45,652 sq km and located on the Tropic of Cancer 23.26 N. The sites do not require sun tracing.

Source: TERI, GEDA

Districts with the highest GH/DN Irradiance, kWh/m2/year

23

GHI DNI Jamnagar 2,216 2,697 Junagadh 2,212 2,661 Navsari 2,110 2,427 Patan 1,883 2,008

Asia’s first 500 MW Solar Power Park at Charanka, district Patan


Source: TERI, GEDA

Gujarat has taken the lead over other states in renewable energy initiatives, particularly in solar power generation.

It is the first state in India to achieve RPO target

654.81 MW of solar power capacities commissioned

by 64 developers in the state of Gujarat

Solar Power Policy 1st state policy in the country

Phase Developers Capacity, (Nos.) MW

Phase I allotment 57 406.5

Phase II allotment 27 562.0

Total 84 968.5

Gujarat’s largest solar power plants, as on May 2012

District MW

Adani Enterprises Ltd. Kachchh 40

Sanland Real Estate Pvt. Ltd. Banaskantha 25

Tata Power Company Ltd. Jamnagar 25

Alex Astral Power Pvt. Ltd. Patan 25

Roha Dyechem Pvt. Ltd. Patan 25

Sun Edison Energy India Pvt. Ltd. Patan 25

Kiran Energy Solar Power Pvt. Ltd. Patan 20

PLG Photovoltaic Patan 20

Hiraco Renewable Energy Pvt. Ltd. Porbandar 20

• 76% of developers who signed PPAs under the policy have commissioned their projects

• 68% of allocated capacities have been commissioned. They help

• generating ~1,048 million kWh of electricity annually

• avoiding 0.72 million tonnes of coal annually

• reducing carbon emissions of 1.04 million tonnes annually

24


Source: GETCO, GPCL

Geographical locations of solar power projects

25


Source: GERC Order No. 1 of 2012: Determination of tariff for Procurement by the Distribution Licensees and others from Solar Energy Projects; 27 Jan. 2012

Summary of solar Tariffs, Rs./kWh(projects commissioned Jan 29, 2012 - March 31, 2015)

Period Jan 29, 2012 –Mar 31, 2012 Mar 31, 2014 Mar 31, 2015

Megawatt-scale PV projects availing accelerated depreciation

Levelized tariff for 25 years 9.28 8.63 8.03

First 12 years 9.98 9.13 8.35

Subsequent 13 years 7.00 7.00 7.00

Megawatt-scale PV projects not availing accelerated depreciation


First 12 years 11.25 10.30 9.42

Subsequent 13 years 7.50 7.50 7.50

Kilowatt-scale PV projects availing accelerated depreciation


Kilowatt-scale PV projects availing accelerated depreciation


Apr 1, 2013 – Apr 1, 2014 –

Levelized Tariff for Solar Thermal Projects

With accelerated depreciation benefit 11.55 per kWh for 25 years

Without accelerated depreciation benefit 12.91 per kWh for 25 years

26

BIOENERGY IN GUJARAT

Source: TERI, GEDA

Biomass potential in Gujarat

Crop Residue

Forest Residue

Districts with the highest biomass potential, MW

Crop

Rajkot 228

Jamnagar 203

Bhavnagar 192

Junagadh 168

Surendranagar 142

Amreli 137

Forest

Junagadh 18

The dangs 18

Sabarkantha 16

Valsad 15

Dahod 12

Banaskantha 11

The total biomass potential for Gujarat is about 1,800 MW from crop

residue and about 140 MW from forest residue

Bioenergy power generation

31.20 MW capacity biomass projects commissioned in Amreli, Junagadh and Vadodara

13.23 MW waste-to-energy power generation projects

Bioenergy programmes

Institutional biogas plants 9835 m3/day

capacity in various institutions

across the state

27

BIOENERGY IN GUJARAT

Source: GERC Order No. 5 of 2010: Determination of tariff for Procurement of Power by Distribution Licensees from Biomass based Power Generator and Other Commercial Issues, 17 May 2010GERC Order No. 4 of 2010:Determination of tariff for Procurement of Power by Distribution Licensees from Bagasse based co-generation Power Plants and Other Commercial Issues, 31 May 2010

Tariff for Bagasse based co-generation projects to be commissioned in the state of Gujarat during the control period (June 2010 – May 2013), Rs/kWh

Tariff for Biomass based power projects to be commissioned in the state of Gujarat during the control period (June 2010 – March 2013), Rs/kWh

Tariff Initial 10 years 11th year onwards

With accelerated depreciation 4.40 4.75

Without accelerated depreciation 4.45 4.80

Tariff Initial 10 years 11th year onwards

With accelerated depreciation 4.55 4.90

Without accelerated depreciation 4.61 4.96

28

NEW ENERGY IN GUJARAT

Source: TERI, GEDA

The state endeavors to become the leader in terms of capacity and introduction of new technologies in other renewable energy sources, like wind-solar

hybrid, WTE, OTEC, tidal energy, etc.

The total potential for wind solar hybrid installations is about

74,000 MW with the largest potential in Rajkot and Kachchh

Gujarat has the 1,600 km coast line and good wind velocity offshore.

The total offshore wind potential is about 4,000 MW

Districts with the highest hybrid potential, MW

Wind solar hybrid installation, MW

Rajkot 23,182

Kachchh 16,151

Jamnagar 8,707

Surendranagar 6,625

Amreli 3,585

Bhavnagar 2,514

Sabarkantha 2,303

Banaskantha 2,044

Junagadh 2,038

29

NEW ENERGY IN GUJARAT

Gujarat geothermal potential is concentrated in Khambhat

25 MW capacity of geothermal energy is currently utilized for direct heat in Gujarat (Khambhat)

Geothermal power pilot projects are being planned in the state

Source: TERI, GEDA, World Geothermal Congress 2010

Tidal Potential in Gujarat, MW

The following two sites were identified as potential sites for setting up tidal wave based power project in the State: • Gulf of Khambhat• Gulf of Kachchh

Potential site Tidal energy potential, MW

Gulf of Kachchh 503

Gulf of Khambhat 6,303

Total 6,806

30

RENEWABLE ENERGY AND TECHNOLOGIES SUCCESS STORIES IN GUJARAT

Source: TERI, GEDA3.4

31

MODEL SOLAR CITY PROJECT - GANDHINAGAR

Source: MNRE, GEDA

Government of India declared Gandhinagar as a Model Solar City

setting example for Solar Citiesthroughout India and other nations

Ministry of New and Renewable Energy (MNRE) has launched a program on

“Development of Solar Cities” on January 24, 2011

The program assists Urban Local Governments in:

• Preparation of a master plan for increasing energy efficiency and renewable energy supply in the city

• Setting-up institutional arrangements for the implementation of the master plan.

• Awareness generation and capacity building activities.

The program aims at minimum 10% reduction in projected demand of conventional energy at the end of five years, which can be achieved through a combination of energy efficiency measures and enhancing supply from renewable energy sources

Rajkot and Surat have received in-principle approval under this programme

Gandhinagar:The Model Solar City project

10 KW capacity wind-solar hybrid system commissioned at Udyog Bhavan, Gandhinagar

19 solar rooftop systems of 10 KW each commissioned at government buildings

in Sachivalaya, Gandhinagar

1,240 KW SPV-based grid-connected power generating rooftop systems at

government buildings

240 solar rooftop systems of 1 KW each commissioned at godowns

6 solar hybrid systems of 5 KW each commissioned on government buildings

32

5 MW GANDHINAGAR SOLAR ROOFTOP PROGRAMME

Government of Gujarat has launched the ambitious “Gandhinagar (Solar) Photovoltaic Rooftop Programme” to encourage alternative clean energy sources like solar energy as well as social participation to advance towards energy self-sustainability

To be implemented in• Surat• Rajkot• Mehsana• Bhavnagar• Vadodara

• This Programme provides an opportunity to property owners in Gandhinagar City for participation by offering their rooftop or terrace for installation of Solar Photovoltaic System (SPV) for solar power

• The owner of property will be paid a “Green Incentive,” which shall be based on the units (kWh) of electricity generated by the SPV system installed on the property

Opportunity for rooftop owners

• In this programme the developer is selected through a transparent competitive bidding process. The selected developer will finance/Install/Own/Operate and maintain PV roof systems on owners roof tops

• The energy generated from this system will be sold to Distribution Company and Distribution Company will pay duly approved tariff to developers

• Selected developers will execute the “Green Incentive and Lease Agreement” with individual property owners, whose rooftop or terrace will be utilized for the SPV system

Role of project developer

Source: GPCL

33

SOLAR PARK – FLAGSHIP PROJECT OF GUJARAT

Source: GEDA, GPCL

Solar Park Concept

Concentrated zone of development for solar power related activities

• Solar thermal/PV generation based projects

• Solar components manufacturing/ assembling

• Research and development

• Capacity Building

Single window facility for solar power project d e v e l o p e r s fo r p r o v i d i n g c o m m o n infrastructure facilities like

• Land facilities

• Water and drainage facilities

• Water treatment plant

• Electrical network with 66 kV substation for auxiliary power

• 400x220x66 kV substation – Power evacuation system

• Excellent Road (approach and internal roads)

• Green belt

• Helipad

• Fully developed office space

• Residential accommodation and medical assistance

Ensure implementation of the policies of government of Gujarat for development of the solar power sector

Key Features

Area: approx. 2,000 HaCapacity Installed: 231 MWNo. of developers: 21

Gujarat Solar Park, Charanka, Patan district

GEDA Financial Institutes

GPCLNodal Agency for Solar

Park development

GETCO

SSNNL

GERC/CERC

Governmentagencies

Transmissioninfrastructure

Wateravailability

Tariffdetermination

Tariff determination

Shared with solardeveloper,

manufacture, R&Dsetup

Solar Park Framework

Processed applications

Policy directives

Project funding

Infrastructure development

charge

34

GUJARAT SOLAR PARK – CII’S MOST INNOVATIVE ENVIRONMENT PROJECT AWARD

Source: GPCL, GEDA

The only project in Power sector of India that has won this prestigious award

Social Commitment

• All-weather road connectivity

• Water to carry out cultivation activities

• Drinking water facility to Charanka village

• Ambulance service

• State-of-the-art training facility to provide training to the villages in various fields

Award merits:

• Given a discrete definition of “solar park” in the Indian context

• World’s largest multi- developer and multi-beneficiary solar park with targeted 500 MW Solar Power Projects at single location

35

INDIA’S FIRST CANAL-TOP SOLAR POWER PROJECT

Source: GSECL

Gujarat has initiated the world’s first canal-based solar power project on Narmada

branch canal new Chandrasan village of Mehsana district

• Projected energy production: 1.5 million units/year/MW

• Irradiation: 4.6 – 6.4 kWh/m2

• Installed capacity: 1 MWp

• Technology: polycrystalline solar modules, 280 Wp

• Number of modules: 3616

• Canal length used: 750 m

• Power evacuation system: 11 KV

Cover the canal with Solar Panels to

• Save Land @ 5 acre per MW

• Minimize evaporation from canal (9 million liters water saving per MW per year)

• Produce eco-friendly power

• Shadowing effect of panel results in reduced photosynthesis and less algae growth leading to less maintenance cost

Energy generated from this pilot project will be directly fed into the local electricity grid and

utilized by nearby towns and villages

1 MW CANAL BASED SOLAR POWER PLANT

Innovative ideasTechnical details

36

BIOENERGY

Source: GEDA

0.95 MW biogas based power project at Sayaji Industries, Kathwada, 2009-10

Sayaji Industries, Kathwada is dealing with maize starch products. As a result of maize corn milling, grinding and processing, about 14000 nm3 biogas is generated. Earlier biogas was being used in the coal fired boilers. Under the MNRE programme of energy recovery from industrial & commercial wastes, the biogas based power project was taken up. The project commissioned in April 2009 and has been running successfully at about 80% PLF since commissioning

12000 nm3 biogas per day (1 MWeq.) maize starch industry liquid waste based biomethanation plant by Gujarat Ambuja Exports Ltd., at Dalpur , Dist: Sabarkantha 2009-10

12000nm3 /day capacity biomethanation plant is completed & commissioned in December 2009 under MNRE waste-to-energy (WTE) scheme. Plant has been running successfully since its commissioning date. Produced biogas gas is used in 100% biogas engines in CPP.

0.833 MWeq.(10000 nm3/day) capacity maize starch industry liquid waste based biomethanation plant at Sayaji Industries Ltd., Kathwada, 2010-11

Sayaji Industries, Kathwada increased its maize grinding capacity from 325 MT/day to 550 MT/day, the effluent also increased with higher COD value of about 16000 to 20000 KGs COD. One 10000 nm3/day capacity biomethanation plant has been installed & commissioned December 2011.The same is working with more than 80% efficiency. The produced biogas is used in its CPP.

Industrial Waste based 4800 nm3/day capacity biomethanation project at Anil Starch Products Ltd., Ahmedabad, 2000-01

An up flow anaerobic sludge blanket technology reactor (UASB) having total bio-gas generation capacity of 4800 nm3/day has been installed at M/s Anil Starch Products Ltd. under waste-to-energy project related interest subsidy scheme of MNRE for WTE projects during financial year 2000-2001

2.0 MW capacity Bio-gas based Power Generation Project, Ankleshwar, 1997-98

This project was commissioned during FY98 under MNRE capital investment subsidy scheme on WTE projects by Kanoria Chemicals Industries Ltd.

37

GUJARAT – PREFERRED DESTINATION FOR INVESTMENTS IN RENEWABLES

Source: GEDA, iNDEXTb

Renewable Energy Sector received a major boost at Vibrant Gujarat Summit in 2009 and 2011

Special Investment Packages announced for Solar and Wind Power Generation

2011Sector MoU signed Capacity Amount

(Nos) (MW) (USD billion) Generation Potential (Nos)

Solar Equipment Manufacturing 36 2,440 4.5 27,500

Wind Power Generation 28 5,071 6.7 10,142

Tidal Power Generation 1 250 1.1 2,440

Electromagnetism 1

TOTAL 66 7,761 12.3 40,082

Employment

2009• Highest number of MoUs signed in the renewable energy sector (32% of total number of MoUs)

• Total capital investment of USD 22 billion

• 70 MoUs signed for solar and wind power projects for 10,321 MWe.

• Expected employment generation is 45,000 over the next five years

38

LARGE RENEWABLE ENERGY PLAYERS IN GUJARAT

Solar power developers

Wind power developers

Wind equipment manufacturers

Solar PV manufacturers

Ritika Systems Private Limited

Sunrise Technology

Vimal Electronics

Sonki Solar India

Topsun Energy Limited

TATA BP Solar India Ltd.

Star Energy Systems

JJ PV Solar Pvt. Limited

Jain Energy

Waaree

GreenBrilliance Energy Pvt. Ltd.

Euro Solar Power Pvt. Ltd.

39

SCENARIO IN GUJARAT BY 2020 AND INVESTMENT OPPORTUNITIES


Source: GEDA, iNDEXTbSource: TERI, GEDA3.5

40

RENEWABLE ENERGY IN GUJARAT BY 2020

NAPCC* goal: 1% annual increase of

RE power to the national grid, from 5% in

2009-10 to 15% of the energy mix by 2020

Expected capacity addition in RE sector by 2017

will be 4,297 MW with highest contribution

from wind – 50% and solar – 44%

Total installed capacity from RE

ources by 2017 – 7,863 MW

Source: Energy and Petrochemicals Department* National Action Plan on Climate Change

Source /Technology capacity (MW) additions

as on May 2012 FY13 FY14 FY15 FY16 FY17 12th Plan

Wind 2,885 326 377 456 498 508 2,165

SHP 6 2 3 4 3 3 15

BIO 20 35 45 55 60 44 239

Solar 655 209 331 331 441 560 1,872

WTE 0 2 2 0 2 6

Total 3,566 572 758 848 1,002 1,117 4,297

Installed 12th five year Plan period Capacity

41

INVESTMENT OPPORTUNITIES

Fund requirementNon- Conventional power

projects under private sector

Project Fund required(USD billion)

Wind 2.65

SHP 0.02

Bio Mass 0.24

Solar 3.82

WTE 0.01

Total 6.74

Source: Energy and Petrochemicals Department, Government of Gujarat

Development of distributed gas

based power combined with non

conventional sources

Tidal and geothermal projects first at a pilot

scale, and then at a commercial scales

Development of wind-solar hybrid installations and biomass projects

Development of large scale solar parks and

canal-top solar projects

Offshore wind projects

development

Development of solar manufacturing

capacities

Development of projects under solar rooftop programme (Bhavnagar, Surat, Rajkot, Mehsana)

42

ADVANTAGE GUJARAT

Source: TERI, GEDA4

43

GUJARAT – THE STATE WITH STRATEGIC LOCATION

44

GUJARAT – INDIA’S ECONOMIC POWERHOUSE

45

GUJARAT – ROBUST INFRASTRUCTURE

46

GUJARAT – STRONG URBAN, SOCIAL AND EDUCATIONAL INFRASTRUCTURE

47

GUJARAT – LAND OF INNOVATIVE HUMAN CAPITAL

48

GUJARAT – NEW PARADIGM FOR INDUSTRIAL GROWTH

The current phase – involving Integrated development of large areas like SIRs,

PCPIR and DMIC – is poised to transform the industrial scenario in the state

Phase of industrial development

Leve

l of I

nteg

ratio

n

83 productclusters

202 IndustrialEstates

SEZs• Multi product• Chemical• Textile• Pharma• IT / ITeS• Electronics• Engineering• Biotech• Gems & Jewellery

Integrated large areadevelopments

• Special Investment Regions (>100 sq. km.) and Industrial Areas (50-100 sq. km.)

• CorridorDelhi Mumbai Industrial

• GIDC Industrial Estates• Petroleum, Chemicals and Petrochemicals Investment Region• Knowledge corridor• Logistics parks• Theme towns

Phase I Phase II Phase III Phase IV

49

GUJARAT - PROACTIVE GOVERNANCE

Source: Socio-Economic Review Gujarat, 2011-12, Department of Economic affairs, March 2009

50

OPPORTUNITIES TO INVEST IN GUJARAT

51

Source: TERI, GEDA5

DOING BUSINESS IN GUJARAT

52

OVERALL FRAMEWORK FOR DOING BUSINESS

53

TAX FRAMEWORK

54

EXCHANGE CONTROL REGIME

55

FRAMEWORK FOR SETTING UP INDUSTRY IN GUJARAT

56

Source: TERI, GEDA6

KEY GOVERNMENT AGENCIES

57

INDUSTRIAL PROMOTION FACILITATORS

58

KEY CONTACT PERSONS

Mr. Maheshwar Sahu, IASPrincipal Secretary (Industries & Mines)

Industries & Mines DepartmentPhone: +91 79 23250703

[email protected]

Mr. D.J. Pandian, IAS Principal Secretary (Energy & Petrochemicals)

Energy & Petrochemicals DepartmentPhone: +91 79 23250771

[email protected]. guj-epd.gov.in

Mr. B.B. Swain, IASVice Chairman & Managing Director

Gujarat Industrial Development CorporationPhone: +91 79 23250583, Fax: +91 79 23250587

[email protected]

Mr. Kamal Dayani, IASIndustries Commissioner

Industries CommissioneratePhone: +91 79 23252683, Fax : 91(79)232 52683

[email protected]

Mr. Mukesh Kumar, IASManaging Director

Industrial Extension BureauPhone: +91 79 232 50492, Fax: +91 79 232 50490

[email protected]

Mr. A.K. Sharma, IASChief Executive Officer

Gujarat Infrastructure Development BoardPhone: +91 79 23232701, Fax: +91 79 23222481

[email protected]

Dr. K.U. MistryChairman

Gujarat Pollution Control BoardPhone: +91 79 23232152, Fax: +91 79 23232156

[email protected]

Mr. D.P. JoshiDirector

Gujarat Energy Development AgencyPhone: +91 79 23257251

[email protected]. http://geda.gujarat.gov.in

59

ndHead Office: Block No. 18, 2 Floor, Udyog Bhavan, GH-4, Sector 11, Gandhinagar 382 010 Gujarat, INDIA Phone: +91-79-23250492/93 Fax: +91-79-23250490

www.indextb.com, www.ic.gujarat.gov.in E-mail: [email protected] Regional Office: A-6, State Emporia Building, Baba Kharak Singh Marg, New Delhi 110 001, INDIA

Telefax: 011-23747002, 23360049 E-mail: [email protected]

For more details and online registration, log on to www.vibrantgujarat.com

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