Green Technology in India, Emerging areas and Opportunities

1. April 2010
Mansoor Khan

2. Global warming and the solution
Every decade since the 70’s has been progressively warmer. The solution is to switch to green, non polluting sources of energy
This is primarily caused by burning of fossil fuels and improper And provide greater focus on Pollution control technology, Water
disposal of wastes Provisioning, and Agribusiness
The government is providing incentives in the form of accelerated depreciation,
India’s electricity demand will triple between 2008 and 2038 fixed‐rate contracts, generation based incentives, subsidized land and low
interest rates for debt financing.
Indian government wants 20% of energy from renewable sources by 2020
24-Aug-11 2

3. Role of the Financial Sector
The Financial Sector does not have a direct impact on the environment, but in
its role as intermediary in the economy, it can BOOST the development of
clean and sustainable technologies
It can WEIGH and attach environmental risks, in a similar manner as it does
the financial risks to assess the overall sustainability of a project
In renewable energy, 70% of the cost is externally financed via debt
PE and VC players also contribute on equity side
According to the International Finance Corporation (IFC) ‐“Sustainability is
about ensuring long term business success while contributing towards
economic and social development, a healthy environment and a stable
society.”
24-Aug-11 3

4. Green Cluster – the global scenario
Investments in Renewable
Energy CAGR : 30.8
World energy demand is expected to rise
60% by 2030
Between 2010 and 2020 the world's supply Billion USD
of oil and gas will fall below the level
required to meet international demand
Oil prices will escalate, leading to huge oil
import bill
73 countries (including India) have targets
to obtain at least some percentage of energy
from renewables World
CAGR : 57.63
Equity Offerings
19.95%
Billion USD
Developing Countries
Renewable Energy Investment Opportunities in Emerging Economies'
http://www.renewableenergymagazine.com/paginas/Contenidosecciones.asp?ID=14&Cod=5264&Tipo=&Nombre=Latest%20news
http://www.commodityonline.com/news/Renewable-energy-boom-in-emerging-economies-25863-3-1.html GBI Research
24-Aug-11 4

5. Indian Power Scenario : Should we go green ?
Union Budget of India for 2010-2011 includes a 61 percent
 India generated 724 bn KWh in 2008‐09, the budget increase (US$223.5 million) directed to the MNRE as
fifth largest in the world part of National Action Plan on Climate Change
 Our per capita consumption is low
 We have enough coal
But there is still a power shortage of around 10% with
demand slated to triple by 2030
But Overall, we have 17% of the world’s population and
only 0.8% of oil and gas
Actually, India was forced increase coal imports to16.7 %
from April to December of 2009, up from 9.7 % a year ago
In 2009-10, India added 2.33 GW of Investments in Renewable energy –India (Million USD)
renewable power of which 1.57 GW was
contributed by wind ,0.31 GW by small
hydro and 0.45 by Biomass ,more than Required by Law
100% increase from 2008-09 State
Andhra Pradesh
Renewable Purchase Obligation
5%
Gujarat 2%
Haryana 3‐10%
Karnataka Min 10%
MNRE’s 2020 target for electricity Kerala 5%
generation from renewables is 20% of Madhya Pradesh 10%
total capacity including 20,000 MW of Maharashtra 3% (annual increase of 1% )
Solar Power and 40,000 MW for Wind Orissa
Rajasthan
450 MU
7.50%
Energy Tamil Nadu 10%
Uttar Pradesh 7.50%
West Bengal 3.80%
http://www.2point6billion.com/news/2010/04/16/india-china-clean-tech-comparison-5350.html MNRE http://www.commodityonline.com/news/Renewable-energy-boom-in-emerging-economies-25863-3-1.html DNA June 12010
24-Aug-11 5

6. PEST analysis : Green Clusters in India
Political / Legal Economic Social Technological
First country to form a ministry of -Economy on the upswing People more willing to set up - Government committed to
renewable energy (MNRE) -11th Plan (2007-2012) Target – off grid installations spending on research on RE
14000 MW from Renewable energy technologies
Electricity Act, 2003
National Electricity Policy, 2005
National Clean Energy Fund for
Integrated Energy Policy, 2006 clean energy technologies
Rural Electrification Policy, 2006 #
-Rs 50 per tonne cess imposed on -Accelerated Depreciation in 1st - Due to increasing awareness -Global competition is forcing
Coal, leading to an increase in coal year on Capex and population more people industry players to improve
based power -Low rate loans available (at 5% for demanding access to clean technology
Solar 9-12 % for others) water and clean power
On domestic and imported, as -generation-based subsidy
per budget 2010
- Kyoto Protocol and other - Fixed Rate Contracts of up to 20 - Cheap rate labor available - Price of Solar PV , Wind turbines,
international agreements put an years with an escalation clause, for making RE equipment Bio Gas systems falling every
emphasis on reducing the carbon electricity produced using RE manufacturing and installation year
footprint; System of Carbon credits cheaper
trade further sweetens the deal for
clean energy
- Huge tracts of land set aside by state 100% equity investment allowed with - More and more people - Indian companies collaborating
governments for set up of Solar grids, permission from FIPB becoming environmentally with foreign companies across all
wind farms Foreign Investors cam set up conscious RE technologies
Gujarat and Rajasthan Financial/Technical JV , Can operate
on BOOT basis
# Promoted generation of Emphasized full development Renewables to reduce RE energy sources can be
electricity from renewable of feasible hydro projects dependence on energy imports utilized for power to all
http://www.assocham.org/3rdasia/presentations/p24-04-08/Planery_Session/kuljit.pdf http://www.merinews.com/article/renewable-energy-act-to-meet-indias-future-needs/126343.shtml http://www.mnre.gov.in/press-releases/press-release-28042008-4.pdf
24-Aug-11 6

7. Green Finance in India
Some of the financial institutions that fund renewable energy projects in India :
Institution Equity Debt CDM Product Details Partners
SBI MITCON Consultancy Services Ltd,
Advisory services, securitization of carbon credit receivables, Ecosecurities India Private Ltd and
Y Y delivery guarantees and escrow mechanism for carbon credits Cantor CO2E India Private Ltd
IREDA Y Y more than 1775 Projects, involving loan of Rs. 74.47 Billion. Supported by WB and ADB
PFC Y Power Projects – Wind, Small Hydro, Biomass
IL&FS Conventional and Renewable power
Y Municipal solid waste treatment Enercon
PNB Have a product for Solar – heating systems, solar cells and appliances
Y Y CDM advisory
RaboBank Renewable energy finance, Carbon Credits, Green banking, Clean Suzlon, Enercon, BILT Power,
Y Y Tech Fund Super Wind
ADB Y Asia Solar Energy Initiative (ASEI) ‐ to provide $2.25bn
IFC Y renewable energy, $720m
Yes Bank 20% of total Infrastructure target is to come from Renewable energy
Y Finance
ICICI Bank reduction of carbon footprint. Energy Efficiency, Cleaner Fuels,
Bioenergy, Small hydropower, FuelCells
Concessional Loans upto a maximum of 50% of the project cost;
Repayment is structured as per project and programme
Y Y requirements
Proparco Y environment‐focused projects
IDFC Y Y Small Hydro, Biomass, Waste to energy, water treatment ADB and World Bank
Energy Alternatives India Report http://www.rabobank.com/content/images/GreenBanking_FactSheet_tcm43-79091.pdf http://www.rabobank.com/content/images/Few%20Important%20Deals_tcm43-78649.pdf
http://www.ilfsindia.com/overview.asp?section_id=3&child_id=12#a
http://www.azurepower.com/main/index.php/press_room/ http://www.financialexpress.com/news/now-banks-eye-green-financing/213967/
24-Aug-11 7

8. 1. Clean Energy

9. rd
Overview of Indian Power Sector
Renewable Energy is the 3 largest
source of power in India, thrice as big as
Nuclear Power
Series1,
Private
Others, 8.6,
Sector Series1,
8%
Series1,
22628, Agricultural, Domestic,
15% Series1, Hydro, 22.9, 23% 24.8, 25%
Series1, 36877.76, 25%
State Sector Series1,
Thermal,
76115, Nuclear ,
Central 93,398.84, 63% Series1,
52% 4,120.00, 3%
Sector Industrial,
48970, Series1, 35.6, 36%
33% Commercial,
Series1, 8.1, 8%
Renewable ,
13,242.41, 9%
Total Installed Capacity (by Sector) Total Installed Capacity (by Source) Electricity Use
Wind Power is the clear choice when it comes to
developing capacity, followed by small hydro , this is
For a total market of around 310 MW, there is some Series1, further strengthened by the low capital and generating
scope in Off grid power plants using Bio Mass Aerogenerator cost of both
/hybrid, 0.89,
Series1, Waste
0%
to energy,
31.06, 9% Small
Biomass gasifier, Hydro, Series1,
2344.67 Cogeneration
160.31
Bagasse, 1033.73,
8%
Series1, Series1, Other,
Other, Series1, Wind, 1778.06, 13%
9755.85, 70% Series1, BioMass
Series1, 3.89, 1% (argoresidues),
Biomass 683.3, 5%
power/coge Series1, Solar
n, 150.92, PV, 3, 1% Series1, Solar PV,
2.12, 0%
44% Series1, Waste to
Energy, 58.91, 0%
Off Grid Renewable Energy On Grid Renewable Energy
There is major scope only in on-
grid systems in Renewable Energy (All Figures in MW)
24‐Aug‐11 9 Ministry Of Power Govt. of India Feb 2009 http://jrse.aip.org/jrsebh/v1/i4/p042701_s1?view=fulltext

10. 1.1 Wind Power

11. Wind Power Worldwide
 Wind is the world’s fastest‐growing source of power generation with an average annual growth of 29%
over the last ten years
 World’s wind power capacity grew by 31% in 2009. (In China it grew100%). Total Installed Capacity at the
end of 2009 :157.9 GW
http://www.gwec.net/index.php?id=30&tx_ttnews[tt_news]=247
 In future the global wind industry is estimated to grow at a CAGR of 19.75% between 2008 and 2015 to
reach 425GW by 2015
Global Wind Power Report 2009
 The main players of this industry are Enercon, Gamesa, GE, Nordex AG, Siemens, Suzlon and Vestas

12. Indian Scenario
 India has low to medium wind speeds and first established wind energy farms in the 1990s
 In 2009, India added 1,270 MW of Wind Power. It now ranks fifth in total installed capacity with 10,950
MW (January 2010)
 95 per cent of the investments in the wind power come from the private sector
 India has a strong domestic manufacturing base helping the growth of the wind energy market.
Amongst these manufacturers is Suzlon, now a player on the global market
 There is an estimated potential capacity of 48,561 MW, which is considered a conservative estimate,
some other estimates are as high as 100,000 MW
 To develop all of this opportunity (48 GW) investment needed is around 2,44,472 cr
http://www.indianwindpower.com/installed_wind_capacity.php Indian Ministry of New and Renewable Energy (MNRE)
24-Aug-11 12

13. Series1, Installed
Wind Power Capacity, 10242,
21%
Capital Costs Rs. 6.5cr per MW
Generation Cost Rs. 0.6 per KWh (O&M and Insurance) Remaining
Industry growth rate 34% pa since 2004 Capacity, 38319
Industry Worth Rs 11,100 cr
Carbon Credits Can earn 26.95 mn
Euros (INR 159 cr) for existing wind power projects (according to IWTMA)
http://www.cwet.tn.nic.in/html/information_gi.html http://www.indianwindpower.com/why_invest_wenergy.php
Gross Potential vs. developed Capacity
States Gross Potential States Developed Capacity
Gujarat 9675 Tamil Nadu 3873.4
Andhra Pradesh 8275 Maharashtra 1755.9
Maharashtra, Gujarat,
Tamil Nadu, and Karnataka 6620 Gujarat 1252.9
Andhra Pradesh Madhya Pradesh 5500 Karnataka 1011.4
account for 60% of the Rajasthan 5400 Rajasthan 538.8
total potential—and Tamil Nadu 5200 Madhya Pradesh 187.7
have 90% of the total Maharashtra 3650 Andhra Pradesh 122.5
installed wind
Orissa 1700 Others 3.2
generation capacity
Kerala 875 Kerala 2
West Bengal 450 West Bengal 1.1
Total 45195 Total 8748.7
http://www.indianwindpower.com/pdf/Gross%20Potential%20Wind%20Energy.pdf
24-Aug-11 13

14. Untapped Potential
Incentives from the maximum potential states
Gujarat ‐ Wind Power Policy ‐ 2007
 Incentives for Wind Turbine Generators for a
period of 20 years;
 provision for wheeling electricity at 4 per cent
charge;
 provision to sell power to any entity at higher
prices i.e. third party sale;
MW
 exemption from electricity duty and demand cut
to the extent of 30 per cent;
 raising the rate of sale of power to Gujarat Urja
Vikas Nigam Limited (GUVNL) to Rs 3.37 per
unit www.airvoicegroup.in/gujarat4.htm
 Andhra Pradesh
 The capital subsidy to the extent of 20 % of the
project cost
 Government lands shall be given on long lease
for 20 years, free of rent for the first five years.
 APSEB shall deduct 2% of the generated energy
fed to the grid by the wind mills towards
wheeling charges during the initial period of 5
years
 Banking charges : banking of energy only for a
period of 8 months in a year
 Additional two per cent of energy banking Installed
charges. http://www.dcmsme.gov.in/policies/statelaw/andhra.htm
Remaining
http://www.indianwindpower.com/pdf/Gross%20Potential%20Wind%20Energy.pdf
24-Aug-11 14

15. State Incentives
Item States
AP Gujrat Karnataka Kerela MP Maharash Rajasthan Tamil Nadu West Bengal
tra
Captive Use Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allowed
Wheeling At par with 4% of energy 5% of energy + To be 2% of energy + 2% of Below 132 5% of energy 7% of energy
conventional Rs.1.15/kWh decided transmission Energy as kV, 50% of + open
as cross subsidy by SERC charges as per wheeling + normal access charge
for 3rd party sale. ERC 5% as T&D charges
loss. applicable
to 33 kV
decelared
by
commissio
n +
Surcharge
+ Losses *
Banking Not Allowed Allowed @2% of Not Allowed 12 Months Six 5% (12
energy input Months months
Financial
year April to
March)
Buy Back rate Rs.3.50per kWh Rs.3.55 per kWh Rs. 3.70 per kWh Rs. 3.14 Year wise Rs.3.50/k Levelised Rs.2.90 per Rs.4 per kWh
by SEB without any (without any escalation without any per kWh rates Wh (First Tariff For kWh
escalation for 10 for 20 yrs.) escalation for 10 without 1st Yr – 4.03 year of Jaisalmer, For WEG
years as per AP Govt. yrs of commercial any 2ND Yr – 3.86 commissio Jodhpur commissione
Policy amendment operation escalation 3RD Yr – 3.69 ning). and d on after :‐
Date 09.09.2008 for 20 yrs. 4TH Yr – 3.52 Escalation Barmer 19.09.08 –
subject to approval of 5TH Yr – To of 15% fro district 20.03.09 =
APERC 20THYr – 3.36 1st 13 yrs Rs.4.28 per 2.90 per kWh
unit 20.03.09 ‐
Levelised 31.03.09 =
Tariff For 3.24 per kWh
other 01.04.09 =
district 3.39 per kWh
Rs.4.50 per
unit

16. State Incentives (contd.)
AP Gujrat Karnataka Kerela MP Maharashtra Rajasthan Tamil West Bengal
Nadu
Third Party Allowed under Allowed under Allowed under Allowed under Allowed under Allowed under Allowed Allowed Allowed
Sale Electricity Act Electricity Act 2003 Electricity Act Electricity Act Electricity Act Electricity Act under under under
2003 subject to subject to 2003 subject to 2003 subject to 2003 subject to 2003 subject to Electricity Electricity Electricity
regulation regulation framed regulation framed regulation framed regulation regulation Act 2003 Act 2003 Act 2003
framed by by respective SERCs by respective by respective framed by framed by subject to subject to subject to
respective SERCs SERCs respective respective regulation regulation regulation
SERCs SERCs SERCs framed by framed by framed by
respective respective respective
SERCs SERCs SERCs
Other Industry Status E.D. Exempted, No electricity No electricity Power Excemptio
Incentives Demand cut 30% of Duty for 5 yrs Duty for 5 yrs evacuation n from
windfarm installed arrangement, elecricity
capacity Approach Road, duty @ 50
Electricity Duty, paise for 1st
Loan to 7 years
cooperative
societies
Penalty on 10 paise per 10 paise per kVArh Rs. 0.40 Per 27 paise 25 paise 5 paise per 25 paise 25 paise per
KVArh kVArh upto up to 10% and 20 kVArh uear w.e.f. per kVArh kVArh if the
Consumotion 10% & 25 paise paise per KVArh 01/04/2006 if the ration of
per kVArh above 10% with ration of kVArh drawn
above 10% escalation kVArh to KWh
of 5% per drawn to exported is
year KWh upto 10% and
exported 50 paise per
is upto KVArh for
10% and more than
50 paise 10%.
per KVArh
for more
than 10%
24-Aug-11 16

17. Wind Power– Central Government Incentives
Indirect Taxes
Description of Goods Rates
Wind operated electricity generators and battery chargers up to 30 KWh 5%
Parts of wind operated electricity generators for manufacture of wind operated electricity 5%
generators –
Special bearing, gear box, yaw components, wind turbine controllers, rotor blades
Raw material for manufacture 5%
Sensor, brake hydraulics, brake calipers, flexible coupling 25%
Devices exempted from excise duty
Wind operated electricity generator and its components
Water pumping wind mills, water aero generator and battery chargers
Sales tax
Exception/ reduction in CST and GST are available on sale of renewable energy equipment in various
states
Direct Tax
80% Accelerated depreciation on RE systems in the 1st year of installation of projects
Tax Holiday on power projects
24-Aug-11 17

18. Wind Turbines – Major Manufacturers
Company Market Share 2008 (of 1250 MW added) CAGR Models Order Book 2010
Suzlon Energy Ltd 69% 52% S64/1000 KW 2400‐2600 MW
S 64/1250 KW USD 4,335 million.
S 66/1250 kW
S88/2100 kW
Sulzon 600 KW
S 70/1250 KW
S82 600 KW
RRB India Ltd 13% Pawan Shakthi—600 kW
(previously Vestas‐RRB) V39–500 kw
V27—225 kW
Vestas Wind Technology India Pvt. 9.6% V82‐1.65 MW
Limited NM48‐750 kW
Others 8%
GE Wind Energy India GE 1.5 sle 50 H 1500 KW
Enercon (India) Ltd E‐33 330 KW
E‐30 230 KW
E‐40 600 KW
NEG Micon NM 48/750,
NM 54/950,
NM 82/V 82 1650
Elecon T600–48 600 KW
Pioneer Asia G52–850 kW
Shriram E.P.C. Ltd. SEPC 250 T 250 KW
http://www.vestas.com/en/media/win%5Bd%5D/article-display.aspx?action=3&NewsID=1904 http://www.moneycontrol.com/news/business/fy10-orderbook-at-2400-2600-mw-suzlon-energy_409481.html http://jrse.aip.org/jrsebh/v1/i4/p042701_s1?view=fulltext#c43
http://www.rrfinance.com/PDF_Files/Research_pdf/research_reports/sprcial_report/SUZLON%20-SWOT%20ANALYSIS.pdf
24-Aug-11 18

19. Private Wind Farm Owners
Private Wind Farm owners in India
(10 MW & above Capacity)
(As on 31.03.2009)
Total(MW)
Sl. No Name of Owner
1 Madras Cement Ltd. 181.585
2 DLF Limited 161.200
3 Tata Power Company Limited 159.250
4 Enercon Windfarms Hindustan P. Ltd. 128.800
5 HZL 123.200
6 MSPL Limited 121.950
7 BP Energy India Pvt Ltd 99.400
8 Gujarat NRE Coke Limited 87.500
9 Essel Mining & Industries Ltd. 75.000
10 DLF Home Developers Ltd 67.500
http://www.windpowerindia.com/statpriv.html
24-Aug-11 19

20. Wind Power – Consultants
Consultant Seminars , Publications
BTM Consult ApS, Denmark World Market Update Report
Centre for Wind Energy Technology (C‐ http://www.cwet.tn.nic.in
WET)
Consolidated Energy Consultants Ltd www.windpowerindia.com
(CECL) CECL has published journal on orders
issued by Electricity Regulatory
Commissions.
Directory on Indian Wind Power
IT Power India Business Development meet on Energy
Efficiency & Renewable Energy
http://www.itpi.co.in
Indian Wind Energy Association Biggest Wind Power Consultants
(InWEA) www.inwea.org
24-Aug-11 20

21. Upcoming Projects
Company Technology Capacity State
Partner
Gujarat Alkali & Chemicals Suzlon 21 MW Gujarat (Rajkot District)
Ltd (GACL)
Larsen & Toubro Suzlon 8.7 MW Tamil Nadu
Infrastructure
Development Projects Ltd
CLP Power India Pvt Ltd, Suzlon 346 MW Gujarat, Maharshtra, Karnataka and
subsidiary CLP, Hong‐ Tamil Nadu
Kong
Airvoice Group, Gurgaon 200 MW (part Karnataka
in association with SJVN of 3000 MW
wind energy
plan)
Ghodawat Energy Limited 200 MW Tamil Nadu and Maharashtra
(GEL)
SBI Suzlon 15 MW (plan Tamil Nadu, Maharashtra and Gujarat
100 MW)
24-Aug-11 21

22. SWOT – Wind Power
Strength Weakness
Cause Effect Cause Effect
O&M costs are amongst the Almost at par with thermal Seasonal Fluctuations Cash flows may be affected
lowest in RE Low Wind periods Nov to
March
Monsoons-May to September Daily peak demand and peak Feeding to grid during high
offer high wind speeds generation is out of phase cost time is not possible without
batteries or other storage
Zero Emission No waste disposal costs Requires long transmission T&D losses could be high
lines
Mature manufacturing Industry
Opportunities Threats
Cause Effect Cause Effect
Government wants to develop Change in government policy – Customers may no longer be
40000 MW Wind capacity by reduction of incentives profitable
2020
Untapped offshore Market Cause slight environmental Environmental Groups may put
impact – Noise, Bird Hits pressure on new Wind Farm
sites
24-Aug-11 22

23. Geographic Spread
Clean Power
hk
The Major States where
wind power has developed
are
Tamil Nadu
Maharashtra
Gujarat
Karnataka
Rajasthan
Madhya Pradesh
Andhra Pradesh
Kerala
West Bengal
As these estimates are taken
some years ago, there is more
potential than previously
thought
24-Aug-11 23

24. Common capacity of WTGs
Small turbines have few moving parts and do not require regular maintenance. A rebuilt gearbox for a
1.5 MW turbine on an 80 meter tower will cost 3 to 4 times as much as for a rebuilt gearbox for a
660kW turbine, and most likely a lattice-boom crawler crane must be hired
Wind Turbine Reliability: Understanding and Minimizing Wind Turbine Operation and Maintenance Costs
Christopher A. Walford Global Energy Concepts, LLC
Almost Obsolete
250 KW 251 -600 KW
Manufacturer : Shriram EPC, RRB, Enercon,Pioneer Manufacturer : Suzlon,RRB, Enercon,Elecon
Customers :SME, Captive Power
Customers :Individuals, SMEs, Captive use
Price :
Price : 1.6 Crore
Return pa :
Return pa : 15 Lac
Most used at Wind Farms
601 KW-1.25 M W 1.25 MW – 2.1 M W
Manufacturer : Suzlon,Vestas,NEG Micon, Pioneer Asia Manufacturer : Suzlon, Vestas,GE,NEG Micon
Customers : Tamil Nadu Govt. Muppandal wind farm Customers : SBI
Price : Price : ~10 crore
Return pa : Return pa :
http://www.power-technology.com/projects/tamilnaduwind/
24-Aug-11 24

25. Wind Energy Business
How it works in India
The WTG manufacturer acquires suitable tracts of land
It gets ready T&D equipment, substations, lines to the grid etc . After micro siting it
decides what capacity turbines will work best
A customer comes with a requirement of power units
Based on this and the average PLF the size and no of turbines are recommended. It
makes viable owning even a single turbine
Customer needs to invest 30 % or more as margin. The subsidy and depreciation
benefits are obtained by the customer. The manufacturer may help in getting the
remaining loan and the CDM benefits
Using banking concept, power is fed into the grid at the wind farms and utilized wherever needed
24-Aug-11 25

26. Financing for Wind Power
IREDA
Financing Scheme Interest Rate Maximum Minimum Term Loan
(%) p.a Repayment Period Promoters Contribution From IREDA
(Years) (%)
Project Financing
Setting up of wind 9.0 10 30 Upto 70% of
farms total Project
on ownership/lease 8.5 8 30 Cost
basis
8.0 6 30
Others
• SBI Most Customers prefer Bank financing –market rates are around 12% with a
one year moratorium and margin amount of 30 – 35%
• IDFC IREDA is avoided as it finances after commissioning
Long term loans for about seven years is common, which can be extended or
• PFC refinanced
• ICICI
• All banks finance wind power as normal projects based on IRR and relations with the customers or
the technology partner
Market Size
• INR 11100 cr
• http://www.indianwindpower.com/why_invest_wenergy.php
• around 70% is debt financed
http://www.euindiawind.net/pdf/IREDA.pdf
24-Aug-11 26

27. 1.2 Solar Power

28. Introduction
 Electricity can be generated using solar energy
 directly as with photovoltaic (PV)
 indirectly as with concentrating solar power (CSP)
 Solar power has the potential to provide over 1,000 times total world energy ,it provided only
0.02% (2008)
 World solar photovoltaic market installation was 7.3 GW in 2009
 The Industry generated $ 38.5 billion in global revenues, growing 20% in 2009
 Revenues are likely to reach US$ 100bn by 2014
 Major PV Cell Manufacturers are Sharp Electronics, Q‐Cells, Suntech Power, First Solar,
SolarWorld, Sanyo and BP Solar
http://en.wikipedia.org/wiki/Solar_power
http://www.solarbuzz.com/Marketbuzz2009-intro.htm
http://www.renewableenergyfocus.com/view/8241/worldwide-solar-pv-market-reaches-643-gw-in-2009/
http://www.edn.com/blog/1470000147/post/1040031904.html

29. Indian Scenario
 India is both densely populated (favors off grid solar panels) and has high solar insolation
(high conversion efficiency)
 35,000 km² area of the Thar Desert has been set aside for solar power projects, sufficient to generate 700 to
2,100 GW
 In the absence of the electrical grid, solar power is widely used for off grid uses like street
lighting and water pumps
 The Semiconductor policy(2007) will provide 20 % (25% in non SEZ) of the capital
expenditure during the first 10 years for semiconductor industries
 National Solar Mission (2009, $19 billion ) to produce 20 GW of solar power by 2020
 Solar‐powered equipment and applications would be mandatory in all government buildings including
hospitals and hotels
 To install 20 million square meter solar thermal collectors in the country by 2022 and save about 7,500 MW
power
http://en.wikipedia.org/wiki/Solar_power_in_India#cite_note‐2 http://www.eai.in/ref/services/ime_consulting.html
24-Aug-11 29

30. Series1, Installed
(off Grid), 98, 0%
Solar Power Series1, Installed
(On Grid), 3.1, 0%
Capital Costs Rs. 17cr per MW (PV)
Capital Costs Rs. 15.3cr per MW (Thermal) Series1, Potential,
600000000, 100%
Generation Cost Rs. 15 per KWh
Industry is growth rate 48% pa Solar Power (Photovoltaic)
Industry Size 48,000 cr
http://business.rediff.com/slide‐show/2009/jun/23/slide‐show‐1‐solar‐power‐and‐indias‐ambitious‐plans.htm
EAI India Solar PV Report
Potential 600 TW
Installed (on grid) 3.10 MW
Installed (off grid) 98 MW
Development of Solar Power in India is at a Series1,
nascent stage, with the overwhelming Installed ,
1500000, 1%
majority in off grid stand alone systems
Series1,
Remaining,
138500000,
99%
Solar Power (Thermal)
http://en.wikipedia.org/wiki/Solar_power_in_India#cite_note-4 http://www.tn.gov.in/spc/tenthplan/CH_11_2.PDF
http://www.cercind.gov.in/2010/ORDER/February2010/Order_Solar_Capital_Cost_Norm_13-2010%28Suo_muto%29.pdf
24-Aug-11 30

31. Photovoltaic
MNES is promoting use of PV technology to provide lighting in villages in the
form of :
Community lighting systems Capacity usually 1KW to 2.5 KW
Portable solar lanterns Small 10Wp SPV module connected to a 12V7AH
battery lighting 7 W CFL lamp for 3 hours a day
Street lights Built around a 75Wp SPV module charging a 100‐
130AH battery to run a 11W CFL lamp for dusk to dawn
operation.
Fixed home lighting systems Based on 35‐50Wp SPV module, powering two CFLs
each of 9 or 11W to work 4‐5 hours per day. Some
systems also incorporate facility to run a small TV set
or a fan from the power supply.
Water Pumping Typically 1KW DC motor based pumping for shallow
pumping.
Solar lanterns: 560,295
Number of solar street lighting systems: 55,795
Number of home lighting systems: 342,607
Solar photovoltaic pumps: 6,818
24-Aug-11 31

32. Thermal
The various thermal technologies promoted by government
Solar water and space heating
Penetration only amongst the high
Solar process heating for industrial applications and middle high income group,
bought with subsidy, and direct
purchase from manufacturer
Solar drying
Solar refrigeration and air conditioning
Solar water desalination and water purification
Solar passive architecture Where land is readily available, this
technology is cheaper than PV Array
Solar cooking– Simple and concentrating cookers and has been used in many parts of
the world for MW level plants
Solar Thermal Power – Concentrating and using the sun’s heat to generate steam
and run a Rankine cycle
2
Solar water heating systems: 140 km of
collector area
Box-type solar cookers: 575,000
http://www.indiasolar.com/swhinfo.htm http://www.indiaenergyportal.org/subthemes_link.php?themeid=2&text=solar
24-Aug-11 32

33. Solar Power tariffs across different states
State Conditions Solar PV Solar Thermal
Gujarat Commissioned before Rs 13 per kWh for 1st 12 years Rs 3 from 13th to Rs 10 per kWh for 1st 12 years Rs 3 from 13th to 25th
31/12/2012 25th
Rs 09 per kWh for 1st 12 years Rs 3 from 13th to 25th
Commissioned after 31/12/2012 Rs 12 per kWh for 1st 12 years Rs 3 from 13th to
25th
Haryana Commissioned before Rs 15.96 per kWh for 1st 12 years
31/12/2012
Rs 15.16 per kWh for 1st 12 years
Commissioned after 31/12/2012
Maharashtra Commissioned before Rs 15 per kWh Rs 13 per kWh
31/12/2012
Punjab ‐ Rs 10 per kWh
Rajasthan Commissioned before Rs 15.78 per kWh for 1st 12 years Rs 13.78 per kWh for 1st 12 years
31/12/2012
Rs 15.18 per kWh for 1st 12 years Rs 13.18 per kWh for 1st 12 years
Commissioned after 31/12/2012
Tamil Nadu Commissioned before Rs 15.15 per kWh Rs 13.15 per kWh
31/12/2012
West Bengal ‐ Rs 12.50 per kWh
CRISIL

34. Solar Power– Central Government Incentives
Central Electricity Regulatory Commission ‐ tariff for 2010‐11: Rates
Photo Voltaic Rs. 17.90 per unit
Solar Thermal Rs. 15.40 per unit
For Capital Expenditures
100% depreciation in the first year of installation of the systems
No excise duty for manufacturers
Low import tariff for several raw materials and components
Soft loans to users, intermediaries and manufacturers
Rooftop Power and Stand alone Small Grid‐connected Power Plant (RPSSGP) scheme will provide
Rs.4.5 lakh in subsidy, which is more than half the total estimated cost of Rs.8 lakh needed to install a
5 kilowatt solar plant in houses
Subsidy for solar cookers has been increased by 20 per cent to 60 per cent
www.cercind.gov.in http://www.indiasolar.com/SPV.htm http://www.24dunia.com/english-news/shownews/0/Solar-Mission-to-award-projects-based-on-tariff-discounts/5943833.html
24-Aug-11 34

35. Solar Cell Manufacturers *
Company Capacity in MW Order Book
2010
Velankani Industries 1500
Reliance Industries 1000
Moser Baer Photo Voltaic Ltd 580
Indosolar Ltd 360
Tata BP Solar 300 (75% of sales from exports)
XL Telecom and Energy Ltd 120
Solar Semiconductors 60
Central Electronics Ltd 10
* Most of this produce is for the export Market
24-Aug-11 35

36. Upcoming Projects
Company Technology Capacity State
Partner
Azure Power (PV) Tata BP 2 MW Karnataka
Solar, HHV
Solar
Azure Power (PV) Tata BP 10 MW Karnataka
Solar, HHV
Solar
ACME (CSP) e-Solar 10 MW (Rajasthan)
110 MW (Gujarat)
100 MW (MP)
24-Aug-11 36

37. SWOT – Solar Power
Strength Weakness
Cause Effect Cause Effect
India is densely populated and has This is especially favorable for off grid Very high Capital costs – almost 5 times This is prohibitively expensive,
high solar insolation systems that of thermal even with subsidies
SPV manufacturing base exists in As the PV industry matures, the prices of Most development in India (97%) is off The off grid systems are too small
India PV arrays may drop grid systems – like solar lights, pumps, to be attractive
rooftop systems
SPV has a lot of supporting industries Can create 100,000 jobs by 2020 Most incentives are geared towards This causes most cells to be
in the value chain (MNRE) – added incentive manufacture of cells exported out
EC predicts price of PV CSP – which turns out to be cheaper, is
electricity could drop by 80% by not well developed so far
2030
Opportunities Threats
Cause Effect Cause Effect
Semiconductor Policy 2007 This should encourage the entire SPV Cost reduction of PV arrays may occur
cluster of industries slower than expected
Mini grids - like the one in Sundarbans Saves cost that would have been New technologies like highly efficient
incurred in drawing lines over very wide fuel cells (Bloom) could achieve cost
rivers and T&D losses reduction faster than expected
National Solar Mission 2009 20 GW of solar power by 2020
solar‐powered equipment and
applications mandatory in all government
buildings
20 million square meter solar thermal
collectors in the country by 2022
24-Aug-11 37

38. Geographic Spread
The Major States where
Solar power has
developed are
1. Rajasthan
2. Gujarat
Capacity Utilization Factor (CUF)
of 19% per annum for PV and 25%
for CSP is achievable at few places
in States of Rajasthan and Gujarat
Average is 17% and 23% respectively
24-Aug-11 38

39. Grid Connectivity
 Off Grid  On Grid
 98% of all present solar installations  Policy focus is here‐ 2000 MW of Solar
 Single units Power to be added
 Rooftop heating or Solar Cells for homes  Multiple connected units
etc  CSP or PV

40. Financing for Solar Power
IREDA
Eligible categories of
beneficiaries All categories of users including intermediaries and commercial organizations
7% (commercial borrowers who can claim depreciation benefits)
5% (individuals and other organizations)
Financial intermediaries who borrow funds from IREDA for on – lending at 5% or 7% rate of interest will
be charged an interest rate of 2.5% or 4.5% respectively by IREDA. Such intermediaries will not be able
Rate of Interest to claim depreciation benefit and the on-lending arrangement will not be treated as a lease arrangement.
Loan period 3 Yrs
Moratorium 1 Year
Amount of loan 80% of the cost of the project
Upper Limits for a loan No Limit
Service Charges 1% of the loan disbursed
All types of SPV Systems except solar pumps. Loans will not be provided at subsidized rates for systems
that are available with capital subsidy. With the exception of solar generators for which both subsidies
System Covered and soft loans will be available.
Only those SPV systems and power plants, which confirm to the MNES specifications & guidelines for
2001 – 02 or 2002 – 03 programmes and have obtained test certificates form SEC / Other Authorized
Eligible Suppliers Test Centers will be eligible for supply and other benefits under this scheme
Others
Power Finance Corp - offers a product specifically structured to the Solar Power sector
1-5 MW, MNRE approved
Term Loan covering 70% of project cost
http://www.pfc.gov.in/solar_pv_power_plant_policy.pdf
PNB – has separate guidelines for Solar. They finance most Solar equipment, from Solar cookers to PV arrays, mostly appliances
Market Size
INR 4800 cr EAI Solar PV Report
http://ireda.in/spv_systemsFaq.asp?value=1

41. 1.3 Bio Mass

42. Introduction
 Biomass energy is a generic term to describe energy in the form of heat,
electricity, liquid and gaseous fuels extracted from agricultural and forest
residues, other organic wastes, and specifically grown crops.
 Biomass contributes 14% of the world energy and 38% of
the energy in developing countries
Conversion of biomass waste into useable fuel
1. Gasification
2. Pyrolysis
3. Digestion
4. Fermentation
5. Solid Fuel Combustion
http://www.forseo.eu/fileadmin/media/forseo/docs/Scoping_Study.pdf

43. Indian Scenario
 There is potential of generating 2500 MW of power from urban, municipal and industrial
wastes in large cities, besides metros in next 2‐3 years to partly meet energy shortages
 India is expected to add 1,700 MW biomass‐based power capacity (including cogeneration
from bagasse‐fired plants) during the 11th Plan period
 A National Programme on Biomass Power/Cogeneration is implemented which focuses on
biomass‐based power generation; cogeneration; research and development; and biomass
resources assessment
ASSOCHAM - http://www.assocham.org/prels/shownews.php?id=1560
(Woods and Hall, 1994). http://www.projectsmonitor.com/detailnews.asp?newsid=15049
24-Aug-11 43

44. Biomass Power Series1,
Installed, 50,
0%
Capital Costs Rs. 7cr per MW
Generation Cost Rs. 4 per KWh
Series1,
Remaining ,
16950, 100%
Agri Forest Residues
Sate wise distribution of Bio Mass Power -2008
Series1,
Installed ,
1000, 20%
Series1,
Remaining, 4000,
80%
Processing Residues
BIO Mass Power
(figures in MW)
24-Aug-11 44

45. State Incentives for Biomass Power
State Item
Participatio Wheeling Banking Buy Back Third Party Sale Other Incentives
n
Pvt 28.4% + Allowed at 2% for 8‐ Rs.2.63 per unit, (05‐06) @1% for 5 years Not Allowed
AP Rs.0.5/kwh 12 months
Chattishgarh Pvt 6% Not allowed Rs.3.05‐.3.71 Allowed As to other industry; Electricity
Duty Exempted for 1st five year
Gujarat Pvt ~~4% of energy Allowed 12 months Rs.3.00/unit, No escalation Allowed
Haryana Pvt ~2% of energy Allowed BM‐Rs.4.00/unit, BC‐3.74/unit 2% Allowed
escalation (base year07‐08)
Karnataka Pvt 5% surcharge Allowed at 2% charge @ Rs.2.74 per unit, ‐‐ Subsidy @ Rs.25 lakhs/MW for co‐
Rs.1.13/unit on monthly basis (cogeneration)@Rs.2.85 per unit(04‐05) gen. only
2% on base tariff
Kerala Pvt 5% of energy Allowed 4 months Rs.2.80 per unit, escalated at 5% for five Not allowed 50% cost of power evacuation line
years (2000‐01) to be borne by KSEB.
Maharashtra Pvt./Coop 7% of energy Allowed Rs.3.05 per unit (Comm yr.) (Cogen) Allowed 50% cost of power evacuation line
@ Rs.3.04 ‐ 3.43 (13 yrs. ) @1% (biomass) to be borne by MSEB
M.P Pvt Yet to be Allowed Rs.3.33 to 5.14 paise for 20 yrs. With escl of Allowed
decided 3‐ 8 paise
Punjab Pvt 2% of energy Allowed 12 months Rs.3.49 per unit, (06‐07) escalated at 3% ‐ Allowed As to other industry
cogen. & for 5% ‐ BM
Rajasthan Pvt 10% of energy Allowed 12 months Rs.3.60 per unit, (07‐08)‐water cooled and Allowed
Rs.3.96‐ air cooled condenser in 1st year of
operation with escalation
Tamil Nadu Pvt 2% ‐ 10% Allowed at 2% charge Rs.3.15 per unit, fixed for 3 Years Not Allowed
U.P. Pvt 12.5%* Allowed 24 months Rs.2.86 per unit, for existing and 2.98 for Allowed
new with escalated at 4 paise/year
http://mnre.gov.in/prog-biomasspower.htm