India Wind Energy Outlook 2012

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1

The Wind energy OuTlOOk ScenariOS 1

india Wind energy OuTlOOk | 2012

November 01

IndIa WInd EnErgy

OutlOOk|2012


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COntEnts

1 Stts f wid rg i Idi 6Wind ngy in India 7

Wind pw suc assssnt 6

Wind pw installatins y stat 8

osh wind pw dlpnt 8

rpwing ptntial 10

bais t achiing high gwth 10

2 Pi irmt fr wid 12Natinal plicy asus suppting nwals 13

rgulaty and plicy incntis wind pw: 14

Assssnt gaps in th plicy awk 19

3 Grid itgrti isss 20Gid tansissin planning pcss 21

Iping wind casting and schduling 23

4 Dmsti wid trimftrig idstr 24

India: Intnatinal anuactuing hu 25

5 Wid pwr istmt i Idi 26Wind nancing ynd 01 27

6 Grwt sris fr tIdi wid mrkt 30Glal wind pw scnais 00 and 030 31

India gwth scnais 00 and 030 31

graphs & tablEs

India: cuulati wind installatin (mW) 7

Statwis installd wind pw capacity 8

Wind pw dnsity ap at 80 ts 9

Cunt gulaty and plicy incntis 14

Statwis cpaisn d-in-tai plicy wind pw 16

rnwal gulaty und chanis 18

manuactus ing class II and class III wind tuins 25

optins nancing a wind pw pjct 28

Sall wind and hyid systs in India 29

Glal wind ngy utlk scnais 31

Suppting ngy accss in India 33

Glal cuulati wind pw capacity y 030 34

India: cuulati wind pw capacity y 030 34

ann Ex

Stat wis cpaisn wind pw dlpnt 35

Aag capacity acts in ky stats 35

Statwis gulatins rPS & reC as n 31-08-01 36

Typ incntis aailal und SerCs 38

Gid intcnnctin, ting pactics and chags 38


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(Faq Adullah)

I a dlightd t lan that th Glal Wind engy Cuncil, Wld Institut Sustainal engy and Indian

Wind Tuin manuactuing Assciatin a inging ut th 3d editin th India Wind engy outlk 01

duing Wind Pw India 01 - an intnatinal wind ngy cnnc & xhiitin ing hld at Chnnai duing

N 8-30, 01.

Wind engy has n th astst gwing nwal ngy sct in th cunty. With a cuulati installd

capacity 18,000 mW, wind pw cuntly accunts alst 70 pcnt th ttal installd capacity in th

nwal ngy sct. Aut 3,00 mW nw wind pw capacity has n addd duing th last nancial ya

(011- 01) aln which is th highst in a ya, s a. Th 1th Fi Ya Plan ppsals nisag aund 15,000 mW

gid-intacti nwal pw capacity additin wind ngy aln.

ou ministy has n at th nt piding th ncssay plicy suppt and a acilitati gulaty c-

syst th ast and dly gwth th sct. W a qually cnscius th challngs and dicultis ing

acd y th sct. W a, hw, cndnt that th ptntial th sct is nus. Th tagt 15 pcnt

ttal pw capacity thugh nwal India y 00 nisagd und th Natinal Actin Plan n Cliat

Chang cannt achid withut a sustantial cntiutin wind ngy.

I hp that th wind industy and th wind a dlps a wking siusly t achi ths tagts. I a tld

that th cunt cpndiu is a chnicl u succss in wind ngy s a. I a su that it will s as a

guidk and tiat all th stakhlds in th sct. I cplint th pulishs thi ts and wish thi

ndaus all succss.

D . F A r o o Q A b D U L L A H

m i n i s t

N w a n d r n w a l e n g y

G n n t I n d i a

M s s g


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vstasIndia


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5IndIa WInd EnErgy OutlOOk | 2012

Ramesh KymalChairman

Indian Wind Turbine ManufacturersAssociation

G M PillaiFounder/Director General

World Institute of Sustainable Energy

Foreword

Steve SawyerSecretary General

Global Wind Energy Council

India is the 3rd largest annual wind power market in

the world, and provides great business opportunities

for both domestic and foreign investors. The Indian

wind power sector experienced record annual

growth in 2011 with the addition of more than 3 GW

of new installations. Diverse incentives supported

by a long-term policy and regulatory framework at

the central and state levels have played a crucial

role in achieving this goal. Wind power is now

increasingly accepted as a major complementary

energy source for securing a sustainable and clean

energy future for India.

It is with great pride that we announce the release o

the 3rd Edition o the India Wind Energy Outlook, a

joint publication by the Global Wind Energy Council

(GWEC), the World Institute o Sustainable Energy

(WISE), and the Indian Wind Turbine Manuacturers

Association (IWTMA), at Wind Power India 2012,

being organized rom 28-30 November 2012, in

Chennai. The India Wind Energy Outlook 2012 is

the wind industry stakeholders contribution to the

discourse on accelerating wind power development in

India. Besides providing an overview o wind energy

potential, manuacturing and investment prospects;

the report provides insights into the challenges ahead,

oering suggestions or overcoming hurdles to enable

the domestic wind power sector to advance within

a competitive, world-class and investor riendly

environment. We urther aim to enable all relevant

stakeholders including the government, policy makers,regulators and the industry, to draw upon and make use

o this publication to urther strengthen the legal and

regulatory ramework or wind power in India.

Since the 1980s the Government has taken various

initiatives or developing the countrys vast indigenous

renewable energy resources. This includes the National

Action Plan on Climate Change (NAPCC), and the

current 12th fve-year plan, which set long-term

targets, that help in evolving a better investment

environment or the wind sector. But this eort would

have been in vain, without the positive and proactive

role o the Ministry o New and Renewable Energy

and the electricity sector regulators. Their role in the

development o wind power in India is undeniable and

important. We look orward to working closely with allrelevant stakeholders and supporting the Government

towards achieving the goals set under the NAPCC and

the 12th fve-year plan. Our top priority is to support the

development o a comprehensive renewable energy

law and stable regulatory environment or wind power

in India.

We look orward to taking this dialogue a step orward,

in order to acilitate a quantum leap in the wind power

sector and a transition to a renewable energy uture.

This transition can be achieved without sacrifcing our

economic development. It is our frm belie that the

planned transition to a low-carbon economy through

accelerated deployment o renewables over the next

our decades is essential to solving the major crises

o depleting ossil uels reserves, climate change,

and energy security, while ensuring sustainable

development. This can be achieved without sacrifcing

developmental goals and wind power will play a majorrole in this transition.


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g

1 | status OF WInd EnErgy In IndIa


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status OF WInd EnErgy In IndIa 1

IndIa: CumulatIvE WInd InstallatIOn (mW)

MW

220

1,456 1,7022,125

3,000

4,430

6,270

7,845

9,655

10,926

13,065

16,084

0

5,000

10,000

15,000

20,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: GWEC,20122

WInd EnErgy In IndIa

In 01, dspit a slwing glal cny, Indias lcticity

dand cntinud t is. elcticity shtags a cn,

and 40% th ppulatin has n accss t dn

ngy sics. Indias lcticity dand is pjctd t

than tipl twn 005 and 030. In th cntly lasd

Natinal elcticity Plan (01) th Cntal elcticity Authity

pjctd th nd 350-360 GW ttal gnatincapacity y 0. Dspit aj capacity additins cnt

dcads, pw supply stuggls t kp up with dand.

India had anth cd ya nw wind ngy installatins

twn Januay and Dc 011, installing than

3 GW nw capacity th st ti t ach a ttal

16,084 mW. As mach 01, nwal ngy accuntd

1. pcnt ttal installd capacity, up pcnt

in 1995. Wind pw accunts aut 70 pcnt this

installd capacity. by th nd August 01, wind pw

installatins in India had achd 17.9 GW1.

Und th Nw Plicis Scnai th Wld engy outlk

(011), ttal pw capacity in India wuld ach 779 GW

in 035. T ach 779 GW in 035, capacity ust gw at

a CAGr 5.9 pcnt, 0 GW p ya 009

thugh 035. Th lagst additin p ya up t nw was

naly 18 GW duing scal ya 011-013; this scal

xpansin culd ps a challng th gnnt [IeA,

014] withut a signicant l nwals. Duing

scal ya 011-01 wind ngy aln dlid 3GW

t Indias nw installd capacity, accunting 16.5

pcnt ttal nw installd capacity.

ReneWable eneRGy In The 12Th FIve-yeaR Plan

[2012-2017]

Histically, wind ngy has t and tn xcdd th

tagts st it und th th 10th Plan (00-007) and

11th Plan (007-01) pids. Duing th 10th Plan pid th

tagt st was 1,500 mW whas th actual installatinsw 5,47 mW. Siilaly duing th 11th Plan pid th

isd tagt was 9,000 mW and th actual installatins

w uch high at 10,60 mW.

Th pt th su-gup wind pw dlpnt

appintd y th ministy Nw and rnwal engy t

dlp th appach pap th 1th Plan pid (Apil 01

t mach 017) xd a nc tagt 15,000 mW in nw

capacity additins, and an aspiatinal tagt 5,000 mW.

Iptantly th pt cnds th cntinuatin

th Gnatin basd Incnti sch duing th 1 th Plan

pid. Th pt als piitizd th issu tansissin,which was a wak link in th alu chain until nw. A jint

wking gup th mNre, th ministy Pw, th

Cntal elcticity Authity and th Pw Gid Cpatin

India is lking at this issu.

Hw, India t ach its ptntial and t st th

ncssay instnt in nwal ngy it will ssntial

t intduc cphnsi, stal and lng-t suppt

plicis, caully dsignd t nsu that thy pat in

hany with xisting stat ll chaniss s as t aid

ducing thi ctinss.

3 Indias economic policy is based on its Five Year Plans, and Indias Fiscal Year runs rom April1st to March 31st o the ollowing year.

4 Understanding Energy Challenges in India: Policies, Players and Issues Published by OECD/IEA in September 2012 under the Partner Country Series.

1 Website accessed on 20-10-12 www.mnre.gov.in.2 GWEC Annual Market Update 2012, the installations are between January and December o

each year. The MNRE publishes data or Indian fscal year that runs rom 1st April to 31stMarch o the ollowing calendar year.


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8 IndIa WInd EnErgy OutlOOk | 2012

1 status OF WInd EnErgy In IndIa

WInd pOWEr rEsOurCE assEssmEnt

Psntly, India has an installd pw gnatin capacity a littl 07.8 GW5, which nwals accunt aut

5 GW, and wind aks up a ajity this installd capacity.

In 011 th stat-un Cnt Wind engy Tchnlgy

assssd Indias wind pw ptntial as 10,778 mW at

80 ts hight at % land aailaility6, up th ali

stiat appxiat 49,130 mW at 50 ts, als at %

land aailaility7. I th stiatd ptntial 10 GW w

ully dlpd, wind wuld pid nly aut 8 pcnt

th pjctd lcticity dand in 0 and 5 pcnt in

03 [LbNL 01]8.

o th past ya th sach ganizatins ha

stiatd wind ptntial using diing dls apping

th wind suc9. In n such study cnductd y th

Lawnc bkly Natinal Laaty, assuing a tuin

dnsity 9 mW/k, th ttal wind ptntial in India

with a iniu capacity act 0 pcnt angs ,006 GW at 80-t hu-hight t 3,11 GW at 10-t

hu-hight10 [LbNL 01].

Ths sach studis nd gund ll alidatin thugh

lng-t wind asunts at 80 and 10-t hu

hight. Nthlss thi ndings ay ha a signicant

ipact n Indias nwal ngy statgy as it attpts

t cp with a sustantial and chnic shtag lcticity.

In a psiti dlpnt th ministy Nw and rnwal

engy (mNre), has nw signd a mandu

Undstanding with th Lawnc bkly La t cllaat

n sal issus latd t th stiatin wind suc

ptntial and gid intgatin.

WInd pOWEr InstallatIOns by statE

Histically, th Stats Tail Nadu, Kanataka, mahaashta

and Gujaat ha n th lads in ts ttal wind

installatins. Th Stats rajasthan, madhya Padsh and

Kala a quickly catching up. by th nd th 11th Plan

pid in mach 01, th ttal installd capacity had

achd a ttal 17,351.6 mW.

Intstingly than 95 pcnt th natins wind

ngy dlpnt t dat is cncntatd in just stats

in suthn and wstn India Tail Nadu, Andha Padsh,

Kanataka, mahaashta, and Gujaat [LbNL, 01]. Ths

stats accuntd 85% th ttal installd capacity

at th nd th last plan pid. rajasthan is anth

ging Stat with ising wind tuin installatins.

InstallEd WInd pOWEr CapaCIty bEtWEEn

01.04.2011 and 31.03.2012

S tate s Annual Installations (MW ) Cum ul at ive In sta llat ions (M W)

Andhra Pradesh 54.1 245.5

Gujarat 789.9 2,966.3

Karnataka 206.7 1,933.5Kerala 0 35.1

Madhya radesh 100.5 376.4

Maharashtra 416.75 2,733.3

Rajasthan 545.7 2,070.7

Tamil Nadu 1,083.5 6,987.6

Others 0 3.2

Total 3,197.15 17,351.6

Source: C-WET, MNRE 201212

OFFshOrE WInd pOWEr dEvElOpmEnt

India has a lng castlin 7500 kilts. In Apil

01, th ministy Nw and rnwal engy cnstitutd

an osh Wind engy Sting Citt13 und th

chaianship th Sctay, mNre, t di sh wind

pw dlpnt in India in a plannd ann.

Th Gnnt is lking t ppa a ti-und actin

plan dlpnt sh wind ngy, spcially in

th castal stats Andha Padsh, Gujaat, mahaashta,

odisha, Kala, Kanataka, Wst bngal and Tail Nadu.

A plicy and guidlins sh wind a likly t

annuncd y th ministy Nw and rnwal engy inth na utu.

Th Stat Tail Nadu is likly t tak a lad in hanssing

its sh wind sucs and is in th pcss installing

a 100-t ast wind asunts in Dhanushkdi.

Accding t C-WeT, as p th pliinay assssnt

cnductd y th Scttish Dlpnt Intnatinal14 (SCI),

Tail Nadu has a ptntial aut 1 GW in th nth

raswaa and anth 1 GW in th suth Kanyakuai.

SCI, und th guidanc Cnt Wind engy Tchnlgy

cnductd a dtaild suy th gin t assss aius

paats quid installing sh wind as. Th

tchnical asiility study lkd at sh wind ngy

ptntial in aual aas in th suthn Pninsula andKutch gin in Gujaat. In a cnt study cnductd y WISe,

th sh wind ptntial Tail Nadu has n stiatd

as 17 GW at 80 hight15,which will nd uth alidatin.


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WInd pOWEr dEnsIty map at 80 mEtrEs (W/m2)

Source: Centre or Wind Energy Technology, India11 (2012)

5 www.cea.nic.inWebsite Accessed on 20-10-126 The revised fgure o 102,778 MW remains to be validated with real time data. Website Accessed on 20-10-12 http://www.cwet.tn.nic.in/html/departments_ewpp.html7 Website Accessed on 20-10-12 http://www.cwet.tn.nic.in/html/departments_wra.html8 Reassessing Wind Potential Estimates or India: Economic and Policy Implications by Amol Phadke, Ranjit Bharvirkar and Jagmeet Khangura; Lawrence Berkeley National Lab (2012)9 Note: Another o such studies A GIS based assessment o potential or wind arms in India by Jami Hossain, Vinay Sinha, V.V.N. Kishore, was published in Renewable Energy (2011, vol. 36, no12, pp. 3257-3267) and

assessed the wind power potential in India to be 4250 GW; other similar studies were undertaken by The Energy and Research Institute or the State o Gujarat (2011) and World Institute or Sustainable Energy orthe State o Tamil Nadu (2012). WISEs GIS based study on wind potential reassessment or Tamil Nadu has estimated onshore wind potential o 197 GW at 80 m height with 15% and above Capacity UtilizationFactor. A higher quality onshore potential is estimated at 51 GW at 80 m height. Overall it is interesting to note that all o these studies fnd signifcantly higher wind potential than acknowledged ofcially.

10 The study also fnds that the total ootprint required to develop high-quality wind energy (that is, wind turbines at 80 meters with a capacity actor greater than 25 percent, which would yield apotential o about 543 GW in India) is approximately 1,629 square kilometers, or 0.05 percent o the total land area in India. The ootprint is not large because, typically, the wind turbines occupyonly about 3 percent o a wind-arm and related inrastructure; the rest o the land can be used or other purposes.

11 http://www.cwet.tn.nic.in/html/departments_ewpp.html Website Accessed on 20-10-1212 Website Accessed on 20-10-12 http://www.cwet.tn.nic.in/html/inormation_yw.html13 The Oshore Wind Energy Steering Committee will ocus on issues related to allotment o oshore wind sites that require multilayer clearances, coordination with various government departments and

agencies such as Environment, Shipping, Deense, Maritime and Civil Aviation. The committee will also provide policy guidance or tapping oshore wind energy potential; approve plans and proposalsrelating to oshore wind energy development in the country; develop policy guidelines or oshore wind resource assessment through public/private entities and guidelines or awarding the sites toprivate sector or establishing oshore wind power projects. The Committee will include various stakeholders including government departments and agencies.

14 Scottish Development International (SCI) is the international economic development agency o Scotland. Ministry o New and Renewable Energy Presentation at the Round Table on Wind PowerProgramme held on 1-August 2012 at New Delhi. www.mnre.gov.in.

15 In a recently published study called the Action plan or comprehensive renewable energy development in Tamil Nadu by WISE (2012); the wind potential o Tamil Nadu was assessed or 80 m, 100m and 120m using GIS. The total assessed wind potential or 80 m, 100m and 120m was assessed at over 160 GW, 260 GW and 299 GW respectively. Oshore wind potential been estimated as 127 GW at 80 m.


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1 status OF WInd EnErgy In IndIa

rEpOWErIng pOtEntIal

Ccial wind pw gnatin in India gan in 1986.many th ld lw-capacity (< 500 kW) wind tuins

installd than 10 t 1 yas ag ccupy s th

st wind sits in India. Ths tuins nd t placd

with cint, lag capacity achins. on th

idiat nts at pwing th ld wind tuins

is that lcticity can gnatd th sa sit.

A study n pwing ptntial cnductd y WISe th

ministy Nw and rnwal engy stiatd Indias

cunt pwing ptntial at appxiatly ,760 mW16.

Hw du t a lack plicy guidlins and incntis

pwing, cncns a aisd n a nu sujcts

including dispsal ld achins, agntd land wnshipin xisting wind as, claity n th d-in tai d t

nwly pwd pjcts and cnstaind acuatin th

xta pw gnatd.

F xapl cuntly n pjct capacity incas is

allwd in Tail Nadu at pwing du t tansissin

cnstaints, thy dating th pups pwing an

xisting sit. Cnsquntly liitd pgss has n achid

in th asnc natinal stat ll plicy guidlins

pwing.

barrIErs tO aChIEvIng hIghEr grOWth

Th 11th Plan had aid t cat 78.7 GW additinal

capacity gid cnnctd pw ut actual alizatin was

aund 50 GW. Th 1th Plan nisins installing 100 GW

nw capacity which 30 GW is pjctd t c

rnwal engy Sucs, which wind wuld accunt

15 GW. Histically th Indian wind ngy sct has t and

ccasinally xcdd its allcatd tagt17.

Duing FY 011-1, India installd a cd 3.1 GW nw wind

pw capacity. F this scal gwth t aintaind

and scalatd it is ssntial that th industy is supptd

y a stal plicy and gulaty ninnt. India had

installd alst 18 GW wind pw capacity y August

01 (mNre). With C-WeTs updatd wind pw ptntial

nus and th nt twads pting sh

wind dlpnt, th is a lt that can achid

in th cunty.

Accding t th 1th Plan appach pap a GDP gwth at

9 pcnt p ya th Plan pid will qui ngysupply t gw at aund 6.5 pcnt p ya. Th aility t

t this ngy dand dpnds n th cuntys aility t

xpand dstic pductin in citical ngy su scts n

an ugnt asis. Pw gnatin (utilitis + capti) gw at

5.8 pcnt p annu duing th twnty-ya pid

1990-91 t 010-11.

Wind pw is a atu and scalal clan ngy tchnlgy

wh India hlds a dstic adantag. India has an

annual anuactuing capacity 9.5 GW wind

tuins tday. Th cunty is sing aut 3 GW in annual

installatins und th 1th Plan tagt. This dst pac

utilizatin th cuntys wind pw anuactuing andsuc ptntial s a is attiutal t sal acts,

including lack an apppiat gulaty awk t

acilitat puchas nwal ngy utsid th

hst stat, inadquat gid cnnctiity, high whling and

pn accss chags in s stats, and dlays in acquiing

land and taining statuty claancs. Th ad glal

cnic slwdwn has ducd xpctatins th scal

ya 01-13 th wind sct, which is still cping with

th ductin th Acclatd Dpciatin nt

80 pcnt t 35 pcnt in th st ya a wind tuins

patin.

bsids ths th a th ptntial ais t achiing

high gwth ats in th sht t diu t. o

th last dcad th dal gnnt has d th

ky incntis naly th Acclatd Dpciatin (AD),

th Gnatin basd Incnti (GbI) sinc 009 and th

rnwal engy Cticats (reC) chanis sinc 01018.

A undantal asn th gwth wind sct had n

th aailaility th AD nt. With th quantu this

nt ducd und th cunt Plan ( 1st Apil 01),

th th dal sch calld th GbI has nw c aital incnti th wind sct. Thugh likly t id

in na utu, at psnt th GbI is als in ayanc.

Th GbI in its st w yas patin has nt attactd as

any Indpndnt Pw Pducs as nisagd, sinc th

insts w th pinin that th cunt at INr 0.5/

kWh [~ 1 US$ cnt] was nt adquat at pa with th scal

nt d und th Acclatd Dpciatin sch;

as th tw cntinu t utually xclusi.

16 Old wind turbines with a total capacity o 1380 MW to be repowered to achieve a 2760 MWcapacity with a minimum repowering actor o two.

17 Planning Commission o India www.planningcommission.nic.in/plans/planrel/.../appraoch_12plan.pd

18 For more details on the REC mechanism please see Indian Wind Energy Outlook 2011 avail-able at www.gwec.net


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Th stat-wis rnwal Puchas Spcicatin (rPS)

tagts and th tadal rnwal engy Cticats (reC)

pid uth suppt th sct. Hw th a

n incntis in th xisting awk, spcially stat

utilitis in wind-ngy ich stats, t adpt rPSs high

than th lls suggstd y th Natinal Actin Plan n

Cliat Chang. Als th reC mchanis, du t its liitd

tia ( yas) acs th challng accptanc as a

nu sta y th nancial institutins.

bth th GbI and reC a at an aly stag iplntatin

and qui laning and capacity uilding all stakhlds

spcially th reC akts atu. Futh, th

ultitud gulaty agncis add t th cnusin. Th

lcticity gulaty awk cnsists th Cntal

elcticity rgulaty Cissin (CerC) at th dal ll

and a Stat elcticity rgulaty Cissin (SerC) at th

stat ll.

Th CerC issus guidlins dtining th d-in-tai

nwal ngy asd pw gnatin and ths a

applical t cntal gnnt pw gnating statinsand ths wh tansit pw in th int-stat cid.

Hw, this is applical t a y sall nu pw

pducs and th ast ajity is still cd y th tai

dtind y th SerCs19. This duality is nt usul, as th

tai dtind y th SerCs ay ay nt quialnt

t that CerC tais. Tais ay acss th stats and

ain xd a lng cntl pid, this culd ipact

th tuns nw pjcts cissind und this tai

gi and ngatily ipact nw pjct dlpnt

actiity. In FY 011-1 s th stat utilitis, lik Tail

Nadu, dlayd FIT paynts t wind pw gnats y

a ya. This adsly acts inst cndnc in th sct.

Inadquat gid inastuctu is anth ky issu that nds

t addssd ugntly. Acss st th stats with

signicant wind ptntial, th gid ds nt ha sucint

spa capacity t al t acuat -incasing aunts

wind pw. As a sult, th stat distiutin utilitis a

luctant t accpt wind pw gnatin and usually

tnd t p thal pw gnatin. Thus, th is an

ugnt nd t augnt gnal gid capacity. Als th ginal

suthn gid nds t cnnctd with th st th cunty

n a al-ti asis. This quis tt casting pwdand acss th natin, and a dnizatin th gid.

In st stats, aailaility land wind as is a

cntntius issu. en i piat lands a aailal,

cnsin land us status agicultual t nn-

agicultual is a ti cnsuing pcss. Futh i th land

is cls t a ptctd aa stlands thn taining

claanc st authitis using th stland

wind pw gnatin is ti cnsuing.

Anth ai t th gwth th wind sct is indinatly

high wing csts. In India, a signicant ajity windpw pjcts a cncid with a 70:30 dt-quity ati

as a pjct nancing thd. Th high intst ats (at

psnt > 13 pcnt) ak s y xpnsi dt

und tugh accnic cnditins. Futh it wuld

ncial th sall and diu ntpiss t ha

accss t cncssinal nancing t a th isks latd t

pductin capacity augntatin, spcially cpnnt

anuactus.

Lastly Indias wind sct has tndus j catin

ptntial as th dstic industy gws. Th is likly t

high dand taind anpw and accdingly, th

tchnical taining and acadic cuiculu acss th Statsay nd t did.

19 Tari estimation is based on normative assumptions with respect to project cost, PLF etc.,with validity over the control period o a longer duration ranging rom 5 to 10 years. Thesetaris also vary rom INR 6.14 per kWh to INR 3.20 per kWh across the states due to dieringassumptions.

rGn Pwtch, India


12/40

,

2 | pOlICy EnvIrOnmEnt FOr WInd


13/40


pOlICy EnvIrOnmEnt FOr WInd 2

natIOnal pOlICy mEasurEs suppOrtIng rEnEWablEs

Lgislatin pi t th elcticity Act, 003 (eA 003) hadn spcic pisins that wuld pt nwal nn-

cnntinal sucs ngy. Dspit this shtcing, th

ministy Nw and rnwal engy has wkd twads

suppting th sct y way plicy guidlins sinc 1994-

1995, with ixd sults.

Hw, th eA 003 changd th lgal and gulaty

awk th nwal ngy sct in India. Th

eA 003 andats plicy ulatin t pt nwal

sucs ngy y th dal gnnt, th Stat

gnnts and th spcti agncis within thi

juisdictins.

Th SerCs dtin th tai all nwal ngy

pjcts acss th Stats, and th stat-wnd pw

Distiutin Cpanis (DISComs) nsu gid cnnctiity

t th nwal ngy pjct sits, which gnally a

situatd in t lcatins away aj lad cnts.

S Stats ha c ut with tchnlgy spcic rPSs,

which thy cntinu t split twn Sla and Nn-Sla

catgis. Als a Januay 011 andnt t th Natinal

Tai Plicy andatd SerCs t spciy a sla-spcic rPS

at stat ll.

by Jun 01, as andatd und elcticity Act0, 6 SerCs

had xd qutas (in ts % lcticity ing handld y

th pw utility) t pcu pw nwal ngy

sucs. Th andat, which is calld a rnwal Puchas

Spcicatin (rPS), ais 0.5% t 10% in aius stats

01-13 [S Annx 3 n pag 34 dtails].

an InTeGRaTeD eneRGy PolIcy FRaMeWoRK

In India th st attpt at pulling tgth an ulla

ngy plicy ca th at alst 60 yas th cuntys

indpndnc. Th Planning Cissin ught ut thIntgatd engy Plicy: rpt th expt Citt

(IeP) in oct 006, which pidd a ad aching

awk all plicis gning th pductin,

distiutin, usag tc. dint ngy sucs. Althugh

th pt th xpt citt has n aailal sinc

006, plitical citnt t it has n liitd1.

Upn xaining th IeP pt puly th pspcti

th suppt it pids t nwals, th ky sgnt is t

und in Chapt 7 (Plicy pting nwal and nn-

cnntinal ngy sucs), which phasizd th nd

t away capital susidis twads panc

incntis pting nwal sucs. Th IeP ptassignd a liitd l t pw gnatin nwal

ngy sucs n as lat as 03, with nly 5. pcnt

nwals asd lcticity in th gid.

ReneWable eneRGy laW

on th citical quints India is t dlp and

adpt an intgatd ngy awk that has a lng-t

isin, a ti-und plan and an iplnting andat

that suppts Indias ts achiing clan, scu and

unisal ngy accss its ppl. Tday, st cuntis

with adancd lls wind pw dlpnt ha this

awk in plac, usually in th a nwal ngy

law. Such a awk, i adptd, can hlp t addss nt

nly th cncns insts in latin t latil plicy

ninnt and akt isks ut als dli indignus

pw supply th ul pic isk assciatd withssil uls.

rcntly th engy Cdinatin Citt und th

Pi minists oc has dcidd t suppt th nactnt

a rnwal engy Law. Susquntly, a natinal ll

tchnical wking citt a rnwal engy Law

was cnstitutd y mNre. Dtails aut th utcs and

discussins und this citt a nt knwn as nw.

20 Section 86 1(e) o the EA 2003 made the SERCs responsible or the ollowing (a) Ensuringsuitable measures or connectivity o renewable power to the grid, (b) S ale o renewables

based electricity to any person, (c) Mandating purchase o a certain percentage o totalenergy consumption rom renewables.21 A Press Inormation Bureau press release in December 2008 indicated that the Cabinet had

assented to the policy and enumerated key eatures o the IEP. The ollow up on these rec-ommendations are not as easily determinable as those or the National Action plan on Cli-mate Change.http://www.pib.nic.in/newsite/erelease.aspx?relid=46172

22 http://planningcommission.nic.in/reports/genrep/rep_intengy.pd

Wind a in Dhul, mahaashta Suzln


14/40


2 pOlICy EnvIrOnmEnt FOr WInd

rEgulatOry and pOlICy InCEntIvEs FOr WInd pOWEr:

o th nxt dcad, India will ha t inst in ptinsthat nt nly pid ngy scuity ut als pid cst

cti tls adicating ngy pty acss th

ad. India, as pat its ligatins t th Unitd Natins

cliat cnntin (UNFCCC), lasd a Natinal Actin

Plan n Cliat Chang (NAPCC) in Jun 0083 that laid ut

th gnnts isin a sustainal and clan ngy

utu.

Th NAPCC utlind its iplntatin statgy thugh

th stalishnt ight natinal issins. Tw ths

issins w ngy latd, naly th Natinal Sla

missin and th Natinal missin enhancd engy

ecincy. In its psnt stat th NAPCC ds nt ha a

issin ddicatd t wind pw.

Th NAPCC stipulats that a dynaic iniu nwalpuchas tagt 5% ( ttal gid puchas) ay

pscid in 009-010 and this shuld incas y 1% ach

ya a pid 10 yas. That wuld an that y 00,

India shuld pcuing 15% its pw nwal

ngy sucs.

T achi such tagts th is a cla nd cphnsi

and lng-t planning th at th dal and stat lls.

Cunt plicy and gulaty incntis wind pw

dlpnt a listd lw.

rEgulatOry and pOlICy InCEntIvEs

Policy Incentives

100%ForeignDirectInvestmentinprocuringinrenewableenergysectorallowedthroughtheautomaticroute

Atotalof35%accelerateddepreciationisallowedintherstyear(eectivefrom1st April2012):15%normaldepreciationand20%additionaldepreciationforpowersectorprojects.

Tax-freeincomefromsaleofpowerfor10yearsundersection80IAoftheIncomeTaxAct,iftherenewableenergypowerplantsstartgenerationbefore31stMarch2013

Value-addedtax(VAT)atreducedratesfrom12.5%to5.5%insomeStates

Allotmentandleasingofforestlandfordevelopmentofwindpowerprojects

Concessionalcustomsduty(5%)onsomeofthecomponentsofwindpowermachinery

InstitutionalizationofsectornancingthroughtheIndianRenewableEnergyDevelopmentAgency

Windsectoriseligibleforexemptionfromexciseduty

InstitutionalizationofR&D,training,productcertication,testingandresourceassessmentviatheestablishmentoftheCentreforWindEnergyTechnology

ExemptionofElectricityDutybyStateGovernments

Regulatory Incentives

Preferentialfeed-intariin13statesforwindpower

Favorableprovisionsforwheeling,bankingandthirdpartysalebywindpowerproducers

National-leveldynamicRenewablePurchaseSpecicationof5%(2009/2010)increasingby1%everyyearto15%by2020mandatedunderNationalActionPlanonClimateChange

RenewablePurchaseSpecication(RPS)announcedin26statesasmandatedbytheElectricityAct,2003

RenewableEnergyCerticate(REC)mechanismintroducedforinter-statetradingofrenewablepower(solarandnon-solarpowerseparately)

Concessionallevyofcrosssubsidysurchargeinthecaseofthirdpartysalesbywindpowerproducers

Note: The Government o India is likely to introduce a new direct tax code (DT C), which will be eective rom 1 April 2013. The alternative incen tive mechanism suggested under DTC providedor expenditure-based incentives to the business o generation, transmission and distribution o power. All revenue and capital expenditures (with a ew exceptions) will be allowed as tax deduc-tion upront instead o claiming amortization/depreciation on capital expenditure and no tax holiday would be available.

23 http://pmindia.gov.in/climate_change.php


15/40



GeneRaTIon baSeD IncenTIve (2009-2012)

In 009, th Gnnt iplntd a Gnatin basd

Incnti (GbI) sch gid cnnctd wind pw

pjcts. A GbI INr 0.50 p kWh (~ 1 US$ cnt), with a

cap appxiatly $9,000 p mW p ya, ttaling$116,000 p mW 10 yas a pjcts li was d

und this sch4. btwn mach 010 and oct 01,

,01.9 mW capacity wind pjcts had aaild thsls

th GbI nt and 1,830.43 mW pjcts AD nts 5.

Th GbI sch includs capti wind pw pjcts, ut

xcluds thid paty sal, xapl, chant pw

plants. GbI and AD nts a utually xclusi. Th GbI

is and a th tai appd y spcti SerCs and

disusd n a hal yaly asis thugh th Indian rnwal

engy Dlpnt Agncy (IreDA). Initially this sch

was applical t wind pw pjcts cissind 31st mach 01. eali this ya th mNre cndd

that th GbI cntinu th 1th Plan pid, with a

pssil isin th incnti. Th nal appal th

Caint is pnding as oct 01.

In its iginal , th GbI sch was nt attacti nugh

t pull dlps away AD. Accding t stiats y

IreDA, at th pailing tais in 010, th Irr (pst- tax)

wind assts wuld high y 1. t 1.5 pcnt in cas AD

nts acss all ky stats th than mahaashta. Als,

th lw capacity acts in st th Stats ant that th

psnt GbI wuld nt ha ad a pjct asil in

cpaisn t AD6. Hw, th GbI ds nt phiit wind

pw pducs nting th reC akt.

Th gnnt initiati t away tax susidy

(AD) suppt t panc incnti (GbI) suppt INr 0.50 p kWh has nt und an nthusiastic llwing

lagly du t th lw alu th incnti and th caps n

th claid aunt.

Cntinuatin th GbI sch in its ali is unctain.

F th lutin wind pjcts a tax planning asu

t an ngy-planning instunt, th GbI sch wuld

ha t uth nhancd. Industy xpts in India suggst

that nlaging th sch t includ capti and thidpaty

sals, as wll as duling th incnti t INr 1.0 p kWh

and/ ing th cap INr 6. illin [~ $116,000]

p mW culd hlp st th appal th sch.

STaTe WISe TaRIFF FoR WInD PoWeR

At psnt thitn SerCs ha dclad pntial din-

tais (FITs) puchas lcticity gnatd wind

pw pjcts. All th SerCs ha adptd a cst plus7

thdlgy t x th FITs, which ais acss th Stats

dpnding upn th Stats sucs, pjct cst and

iptantly th tai gulatins SerCs. A i cpaisn

wind pw latd tai plics in ky stats is gin in th

Tal n pag 14.

24 Based on INR USD exchange rates in October 201225 IREDA registry or GBI and AD projects http://www.ireda.gov.in26 Indian Wind Energy Outlook 2011 http://www.gwec.net/publications/country-reports/indian-outlook-2011/27 Capital cost considered or purpose o tari fxation per MW or each renewable energy technology, commissioned in the last fnancial year.

Wind a in Kapatgudda, Kanataka Suzln


16/40


2 Policy EnvironmEnt for Wind

StAtEWiSE comPAriSon of fEEd-in-tAriff Policy for Wind PoWEr

States Current tarif rates per kWh Details o available tarif rates RPS Targets (% or wind)

Andhra Pradesh INR 4.70 Constant or 25 years or the PPAs to be signed by 31-03-2015 5% or all RE (2012-2013)

Gujarat a INR 4.23 No escalation or 25 years o project lie 5.5% or wind (2012-2013)

Haryana Wind Zone I INR 6.14 Tari is or FY 2012-13 3% or all RE (2012-2013)

Wind Zone II INR 4.91

Wind Zone III INR 4.09

Wind Zone IVINR 3.84

Karnataka* INR 3.70 No escalation or 10 years 7-10% (2011/12) or allNon-Solar

Kerala INR 3.64 No escalation or 20 years o project lie 3.3% (2011-2012) &3.63% (2012-2013) or allRE

Madhya Pradesh a INR 4.35 No escalation or 25 years o project lie 4% or wind (2012-2013)

Maharashtra Wind Zone I INR 5.67 No escalation or 13 years 8% or all RE (2012-2013)

Wind Zone II- INR 4.93

Wind Zone III INR 4.20

Wind Zone IV INR 3.78

Orissa INR 5.31 No escalation or 13 years 5.5% or all RE (2012-2013)

Punjab INR 5.07 (or zone I) No escalation or 10 years 2.9% or all RE (2012-2013)

Rajasthan a INR 4.46 & 4.69 (or FY 2011-12) No escalation over project lie o 25 years 7.5% or wind (2011-2012)

INR 4.46/kWh or Jaisalmer, Jodhpur & Barmer districts while INR 4.69/kWh or other districts

Tamil Nadu INR 3.51 No escalation or 20 years o project lie 9% or all RE (2011/12)

Uttarakhand Wind Zone I INR 5.15* INR 5.65 or the frst 10 years & INR 3.45 11th year onwards 5.05% or all RE (2012/13)

Wind Zone II INR 4.35* INR 4.75 or 1st 10 year & INR 3.00 or 11th year onward

Wi nd Zone III INR 3.65* INR 3.95 or 1st 10 year & INR 2.55 or 11th year onward

Wi nd Zone IV INR 3.20* INR 3.45 or 1st 10 year & Rs.2.30 or 11th year onward

West Bengal INR 4.87 No escalation or 10 years 4% or all RE (2012/13)

* RPS or Bangalore Electricity Supply Company Ltd. (BESCOM), Mangalore Electricity Supply Company Ltd. (MESCOM), and Calcutta Electricity Supply Company Ltd. (CESC) is 10% while orGulbarga Electricity Supply Company Ltd. (GESCOM)< Hubli Electricity Supply Company Ltd. (HESCOM), and Hukeri, it is 7%.

a RPS percentage specifed only or windConversion Rate: $1.00=INR. 53.50

There is an urgent need or adopting a uniorm tari regime

across the country. Currently the CERC tari regulation28

species technology-wise operating norms or tari

determination while considering the risks associated with

renewable energy projects. CERC has kept a provision or the

revision o capital costs during each year o the control period

to account or price escalation. The regulatory environment

in India, although conducive to all renewable energytechnologies, is not yet uniorm across the States.

The SERCs unortunately are not ollowing the CERC tari

regulation. Some States have preerential taris or wind

that are only marginally higher than the normal power costs.

This raises concerns about the basis o the state-specic

tari calculation exercise, which is typically based on very

conservative assumptions o capital costs, O&M costs, etc.;

oten very dierent rom current costs o the industry. The SERCs

need to adopt the tari prescribed by the Central Electricity

Regulatory Commission as was done by the Maharashtra

Electricity Regulatory Commission. This is essential to ensure

adequate return on equity or the investors.

Renewable eneRgy CeRtifiCate sCheme

The Electricity Act 2003 proposed mandatory Renewable

Purchase Specication (RPS) or all the states. To date, 26

states have specied targets or the uptake o electricity

rom renewable energy sources. With the introduction o the

Renewable Energy Certicate (REC) scheme in 2010, states

are now looking at ullling the RPSs under this provision byprocuring equivalent RECs.

An REC is a tradable certicate o proo that a renewable

energy plant has generated one MWh o electricity. Under

this ramework, renewable energy generators can trade RECs

through a power exchange platorm that allows market

based price discovery, within a price range determined by the

Central Electricity Regulatory Commission. The respective

price limits are called orbearance price and foor price and

their values are calculated separately or solar and all non-

solar sources (i.e. wind, biomass, small hydro). While the CERC

has stipulated foor and orbearance prices or RECs; the real

price o an REC would be determined at the power exchangesbased on prevailing electricity supply and demand situation,

RPS compliance rates by the obligated entities and the overall

supply o RECs in the market at any given point in time.28 In 2009 the CERC ormulated comprehensive regulation or determination o renewable

energy taris, which was urther notifed in 2012.


17/40



29 Website accessed on 23-10-12 www.recregistryindia.in30 Website accessed on 20-10-12 http://panchabuta.com/2012/09/26/renewable-energy-

certifcates-trading-tepid-in-september/

Th tading reCs in th Indian akt gan in Fuay011. In d t qualiy reCs, pjct dlps nd

t gist with th Natinal Lad Dispatch Cnt. Th

issud reCs a tadd at qualid pw xchangs within

th unday st y th f pic and aanc pic, as

dtind y th CerC. F wind pw gnatin, as

Apil 01, th isd ang is twn INr 1,400 (~ $6)

t INr 3,480 (~ $65) p mWh. by id-oct in 01 th

natinal reC gisty had issud 3,384,57 reCs which

3,381,714 w nn-sla reCs9.

o th ttal accditd pjct capacity listd y th natinal

reC gisty, wind accuntd 56% 1993.46 mW th capacity y oct 01. Th apid incas in lu

suggsts that and pjct dlps a nting

th reC akt and th chanis is initing intst ut

wak ncnt rPSs at th Stat ll is lading t

ising nus unsld reCs in th akt. In Spt

01, slls d t sll 7,11,171 (nn sla) reCs, ut nly

,64,446 w ught, and that t, at th f pic INr

1,40030.

Duing Spt 01, n stat-wnd lcticity

Distiutin Cpany (DISComs) ca wad t uy th

cticats, althugh thy a all ligatd ntitis. This

is du t lack ncnt thi ligatins. Th rPSis applical n th Distiutin Cpanis (DISComs),

pn accss cnsus and capti pw uss unily.

Hw, th psnt rPS awk is und lacking in

cti cplianc and ncnt at th Stat ll.m th capti pw uss in Stats lik Gujaat,

rajasthan, oissa a nt y kn t puchas nwals

asd pw ting th rPS and ha challngd th

rPS gulatins.

Th dsign th reC chanis is ing ipd with

ts ing ad t tackl th iplntatin issus as

thy ais and th is incasd laning in th akt. S

th Stats ha ipsd pnaltis nn-cplianc

with rPo tagts n th gnats utilitis. Initiatis a

ing plannd dlping a luntay reC akt als.

making reC a widly accptd instunt and a nusta th pjct nancing cunity still ains a

challng in India. Futh th is a nd a dynaic rPS

stting pcss with qunt upwad isins t t th 15

pcnt nwals asd lcticity pcunt tagt st

und th NAPCC y 00.

naTIonal clean eneRGy FunD

Th gnnt ppsd th catin th Natinal Clan

engy Fund (NCeF) in th Unin budgt 010-011 y

ipsing a clan ngy tax (css) INr 50 (~ $1) p tnn

n all cal pducd as wll as n cal ipts in India.

maanchn, Guadalajaa, Spain Wind Pw Wks


18/40


2 pOlICy EnvIrOnmEnt FOr WInd

Th ministy Financ, thugh th Clan engy Css

uls 010, st guidlins th cllctin and assssnt

this tax y th rnu Dpatnt. That an int-inistial gup was st up in th ministy t app

pjcts and ligiility quints accssing unds

th NCeF31. Hw sinc its incptin in July 010, littl

inatin n th patinalizatin th NCeF has n

lasd in th pulic dain th than th guidlins and

applicatin ppsals.

A study cnductd y WISe stiats that at th cunt tax

at and th xpctd cal cnsuptin ats, a cuulati

ttal INr 670 illin (~ $1.5 illin) culd accu t

th und y 0. This und culd suppt gid and th

inastuctu dlpnt t allw gat acuatin

pw gnatd nwal ngy sucs. Th und

culd als usd sach, dlpnt and dplynt

clan and nwal ngy tchnlgis.

Th ppsals ught th y spnsing natinal ministis

w und t stly lack quality and innatinss,

which aild t adanc th statd jcti th NCeF.

Futh, th ulk th NCeF und ains unutilisd.

Th is a nd t is NCeF guidlins t liinat

aiguity suunding th us its unds, and t liit its us

ting gula udgtay shtalls ministis. Funding

t suppt aius ministis gula actiitis shuld t

th apppiat sucs aailal within th xistingnancing stuctu th gnal budgt.

Althugh pissil und th guidlins, th has

n liitd inlnt Indian industy and sach

instituts t dat in th ppsal dlpnt pcss.

This suggsts liitd awanss angst Indian sach

instituts and industy n th NCeF unding pptunity.

Gin that spnsing ministis dnt play a signicant l

in r&D clan ngy tchnlgis, stng intst y th

Indian industy and aliatd instituts and a gd wking

patnship twn th spnsing ministis is ssntial - i

NCeF is t alis its ptntial.

oTheR InITIaTIveS: ReneWable ReGulaToRy FunD

MechanISM

Th Indian elcticity Gid Cd (IeGC) was adptd in Apil

010 and supsds th Indian elcticity Gid Cd, 006.

It pids dtaild guidlins n th l aius plays

inld in th patin a pw syst.

Und Clauss 5 and 7 th IeGC, unschduld intchang3

chags du t th aiatin in actual gnatin y wind and

sla shuld shad angst all th Stats thugh th

rnwal rgulaty Chag t patd thugh thrnwal rgulaty Fund chanis33. This wuld ha

ad casting and schduling wind and sla pw

gnatin andaty with ct 1st Januay 01 with

th initial iplntatin th rrF chanis. Hw

this still ains t intducd, n thugh th dtaild

pcdus ppad y Natinal Lad Dispatch Cnt34

w xaind y CerC and th did pcdus w

pulishd n 18th Fuay 011.

rEnEWablE rEgulatOry Fund mEChanIsm

Objectives

ForecastingofgenerationbyWind/Solargenerators EncourageWindandSolargeneratorstoparticipateinscheduling Promotebilateraltradingofpowerbyrenewableenergygenerators Makeinvestmentinrenewableenergymoreattractive AssistStatesinmeetingRPS EnhanceSystemOperation

Approach to the RRF was based on the ollowing considerations Achievingbettergenerationdatausingweatherforecastingtools ExemptingSolarpowergeneratorscompletelyfromUIcharges Developingaself-sustainingmechanismtowardsbetteracceptanceofREgeneration ExemptingWindpowergeneratorsfrompayingfordeviationsingeneration(UI

charges)uptoacertainlevelofvariation Socializingthedeviationchargesowingtovariationsamongstdierentstateutilities

Th iplntatin rnwal rgulaty Fund

chanis is dlayd n accunt sal gund ll

issus; including a lack cdinatin twn th CerC

dictis and tily cplianc y aius SerCs. rsling

th cncns n th sids thugh aly and ppti

paticipatin lant stakhlds including aius

rginal and Stat Lad Dispatch Cnts, th mNre andwind a dlps is citical. This wuld hlp in nsuing

lw cutailnt and high gnatin nus th

wind and sla pw plants.

lanD allocaTIon PolIcy

In iw th gwing nu wind pw installatins

in th cunty and th incasing scacity pissil

sits with adquat wind ptntial th mNre, thugh its

cunicatin datd 15th may 01, has qustd stat

gnnts t xain thi land plicy wind pw

installatins and ulat a plicy land allcatin n atpint asis. Th mNre is wking twads iplnting

th st pactics in this gad.

31 The objective o the NCEF is to und research and innovative clean energy technology proj-ects. The 2010 guidelines permit projects with limited, i any, links to d evelopment o cleanenergy technologies. Source: Centre or Budget and Governance Accountability Report onFramework & Perormance o National Clean Energy Fund, July 2012. www.cbgaindia.org

32 Unscheduled Interchange is the dierence between actual generation and scheduled gen-eration rom a power plant.

33 wind generators shall be responsible or orecasting their generation up to accuracy o70%. Thereore, i the actual generation were beyond +/- 30% o the schedule, wind gen-erator would have to bear the UI charges. For actual generation within +/- 30% o theschedule, no UI would be payable/receivable by Generator. The host state should bear theUI charges or this variation, i.e. within +/- 30%. However, the UI charges borne by the hostState due to wind generation, shall be sh ared among all the States o the country in the ratio

o their peak demands in the previous month based on the data published by the CentralElectricity Authority, in the orm o a regulatory charge known as the Renewable RegulatoryCharge operated through the Renewable Regulatory Fund mechanism. This provision shallbe applicable or new wind arms with collective capacity o 10 MW and above; connectedat connection point o 33 kV level and above, and which have not signed any PPA with statesor others as on the date o coming into orce o the IEGC (2010).

34 NLDC website Accessed on 20-10-12 http://nldc.in/RRF.aspx


19/40



assEssmEnt OF gaps In thE pOlICy FramEWOrk

Whil th plicy ninnt nwal ngy in India

has n iping in cnt yas, th wind industy is acing

challngs in th atath th suddn ductin in tax

incntis. Th industy had still n haily dpndnt

n tax incntis t attact a spcic catgy insts.

In a tugh glal cnic situatin, it will dicult

th industy t cpnsat th lss this catgy

insts in th sht-t.

In additin, th Indian pw sct is plagud with

incincis and s liaility pls that cat

a dicult ninnt wind pw gwth. Palyth st iptant quint India is an intgatd

awk that has a isin, a plan and an iplnting

andat that suppts th nwal ngy plicis and

gulatins th cncptual t th iplntatin stag.

Such a awk, i adptd, can hlp t duc inst isk

y piding lng-t gulaty ctainty.

bsids that, th a a nu cntadictins twn

xisting plicy guidlins and awks. F xapl th

Natinal Actin plan n Cliat Chang (008) and th

Intgatd engy Plicy (006) th Gnnt India a

in ppsitin t ach th n th issu nwal ngy.

Th NAPCC stipulats that y 00, India shuld pducing15 pcnt its lcticity nwal ngy sucs

(th than lag hyd). This pisin cs in dict cnfict

with th IeP, which isualizs nly 5. pcnt nwal

ngy pntatin y 03. Sinc th caint has appd

th dcunts, it is ncssay t haul th IeP t ing

it in lin with th latst gnnt plicy i.. th NAPCC.

An ngy cny asd n a uch lag l nwals

is pssil. T acilitat this uch-ndd tansitin an

incint, ssil ul ipt-dpndnt cny t a clan

indignus ngy cny, a ang plicy, gulaty,

lgal and institutinal capacity uilding asus nd t

adptd.

Th ky, hw, is th nactnt a cphnsinwal ngy law. bsids that, th is an ugnt nd

iping th accptanc and ncaility rPSs.

Th utu th reC chanis hings n hw ctily

th SerCs nc th nd cplianc n th ligatd

ntitis. A gat iptus in snsitizing th ligatd ntitis

t th nd cplianc wuld g a lng way in achiing

th rPS tagts. Th SerCs and stat ndal agncis a st

psitind t d this.

Futh, piity sct lnding status nwal ngy

pjcts, and ductin susidis cnntinal ssil

uls culd st th wind sct. Lastly, a cphnsi

gid dnizatin and dlpnt pga is ndd tnsu inst cndnc in nwal ngy tchnlgis.

A dlay in siusly addssing ths cncns will nly add t

th cst tansitining twads a clan ngy utu India.

Wind a in India rgn Pwtch


20/40

3 | grId IntEgratIOn IssuEs


21/40


grId IntEgratIOn IssuEs 3

Indias tansissin ntwk has a tw-ti stuctu: int-

stat gids that a anagd y th Pw Gid Cpatin

India (PGCIL) and th lcal gids, which a anagd yth Stat Tansissin Utilitis. India still nds t stalish

an intlinkd and unid gid thugh intgatin its lcal,

ginal and natinal gids. otn inadquat and wak gids

act as a ai t sth intgatin pw gnatin

nwals. Indias pw tansissin syst is diidd

int ginal gids: nthn, nthastn, astn,

suthn and wstn gins. Sinc August 006, u

ginal gids ha n ully intgatd with th xcptin

th suthn gid that is t synchnizd with ths gids

y 014 [CeA, 0135].

Th aiaility wind pw can cat pls th

taditinal gids in aintaining a supply and dand alanc.

mst th wind as in India a lcatd in t aas

that a quit a away lad cnts. Du t a wak

tansissin and distiutin ntwk, it is dicult t

tansit th pw wind as t th lad dispatch

cnts. This is n th ky cnstaints th utu

wind pw dlpnt in th cunty.

In th past, with tically intgatd utilitis, a singl

ganisatin was spnsil th planning and patin

ntwks and giing accss t gnats, and th th

tchnical quints did nt ha t paticulaly claly

dnd cdid.

Nw, with incasd wnship spaatin twn gid

pats and pw gnats th nd dning th

tchnical quints gning th latinship twn

th cs ssntial. rnwal ngy gnatin

uth cplicats th pcss acuatin and dispatch.

grId transmIssIOn plannIng prOCEss

Lack adquat pw acuatin capacity in th stat

gids is a aj cncn in tansissin planning. Unlss th

tansissin capacity planning pcss incpats a lng-

t isin plannd wind pw additins and inls

wind sct plays at th planning stag, ttlncks latd

t acuatin capacity a xpctd t ain.

Th dy is pcdual than tchnical and quis

adinistati will ath than adancd tchnical

undstanding. Th ministy Pw (moP) has cntly

cnstitutd a citt chaid y th Jint Sctay

th moP t wk n acclatd dlpnt re thugh

lgislati and plicy changs. on th suggstins t

stalin tansissin planning nwal ngy is

t ha a spaat su-diisin in th Cntal elcticity

Authity (CeA) and acss all th stat utilitis

tansissin planning all nwal ngy pw plants.

Indias lcal distiutin systs a wak and wuld

qui sustantial augntatin laying paalll pwacuatin inastuctu, which will inaialy add nt

nly t th csts ut als t cnstuctin ti. Th issu is

uth cplicatd y stipulatins latd t cst shaing

uilding this additinal inastuctu. It is spcially tu

stat-wnd utilitis (DISComs) that a sly cash-

stappd. Anth aj cncn is that cd pw

utag (cutailnt) du t a wak lcal gid, which sults in

sustantial gnatin lss th inst.

m, dicultis latd t institutinal laning, gundll data and lack xtnsi xpinc in gid intgatin

high lus nwal ngy and cphnsi pw

acuatin planning a adding t th dlay. F utilitis that

a accustd t th cnntinal dl cntalizd pw

gnatin, ths issus a likly t ling s yas.

In India, pius gulatins und th lcticity gid cd

(IeGC) did nt allw nwals asd pw t cnnct t th

int-stat tansissin ntwk, sulting in intcnnctin

wind pw pjcts t a wak Stat tansissin

distiutin ntwk lading t cd utag gnatin,

spcially duing th pak wind sasn. Th nd t allw

pw acuatin at high ltags in th int-stat gid

35 CEA (2012) Drat National Electricity Plan: (Volume 2) Transmission, New Delhi

Hs Hllw, Txas, USA Wind Pw Wks


22/40

IndIa WInd EnErgy OutlOOk | 2012

3 grId IntEgratIOn IssuEs

th Cntal tansissin utility (PGCIL36 ) is citical th

gwth th sct. Th CerC cntly allwd pjcts with

capacitis 50 mW t cnnct dictly t th cntaltansissin ntwk sujct t schduling quints37.

This allwanc has addssd n lng-standing cncn

insts y ducing th that cutailnt.

InTeRconnecTIon STanDaRDS

Gid staility is th piay cnsidatin in intcnncting

any nw syst t an xisting gid. F th cnntinal

lcticity ntwk tund t cnntinal gnatins adial

d pw fw, wind pw pss nw challngs latd

t saty, liaility and cincy th intcnnctd

systs. bcaus th aial natu wind pw, th

ai dlping an intcnnctin standad wuld t

nal th gid t sustain th aiaility withut acting th

pw quality adsly.

Und (IeGC) 010, wind and sla pjcts ha n

d ust-un status. Th IeGC ings tgth a singl

st tchnical and ccial uls, ncpassing all

th utilitis that a cnnctd t us th int-stat

tansissin syst. Hw th xpinc cu has n

a latily sht n and th will s dlays whil all

th lant stakhlds uild institutinal capacity and

adquat laning taks plac within thi juisdictins. Full

and succssul iplntatin th rnwal rgulatyFund chanis will a gd stat in th dsid dictin.

GReen eneRGy coRRIDoR

Th mNre and CerC cntly cissind th Pw

Gid Cpatin India (PGCIL38) t study and idntiy

tansissin inastuctu nwal ngy capacity

additin duing th 1th Plan pid. At xtnsi

cnsultatins with aius stakhlds including th

Stat Ndal Agncis, th nal pt calld Gn engy

Cids was lasd in Spt 01. It discusss issus

inta and int-stat tansissin syst stngthningand augntatin, stalishnt a rnwal engy

managnt Cnt, ipd casting t addss

aiaility aspcts as wll as gid intgatin issus lag-

scal nwal ngy gnatin.

An instnt appxiatly $8 illin (~ INr 4,557

cs) is ing plannd th dlpnt this cid

y 017. out this aunt, appxiatly $3.8 illin

(~ INr 0,466 cs) is likly t instd in stngthning

inta-stat gid ntwk and appxiatly $4 illin (~ INr

1,867 cs) is likly t instd in stngthning th

int-stat tansissin syst. This initiati i iplntd

succssully culd a aj di th dlpnt th nwal ngy sct in India.

InDIa SMaRT GRID TaSK FoRce

espcially at th intductin th IeGC, gids acss thcunty a quid t tak n lcticity pducd nn-

cnntinal ngy sucs und aius schs (rPSs

and reCs). Hnc th nd t ap and dniz th

natinal/ginal and lcal gids ust n th piay

aas instnt and dlpnt.

Th ministy Pw (moP) tk th st stp twads

gid s whn it st up th India Sat Gid Task Fc

(ISGTF) in Jun 01039. Th ISGTF is an int- inistial gup

that ss as th gnnt cal pint plans latd

t Sat Gid dlpnt in India. moPs isin a sat

gid was t ing tgth th lds cunicatins, IT

and th pw sct t stalish a cphnsi pw

gid inastuctu. Futh, n th dand sid it nisind

giing a chic t th cnsu t dcid th tiing and

aunt lcticity cnsuptin asd upn th al-ti

pics in th lcticity akt.

Futh, und n th issins th NAPCC, calld th

Natinal missin enhancd engy ecincy, Indias buau

engy ecincy40 patnd with th IT Ibm t cat

th cuntys st sat gid pjct in may 011. Th cus

th analysis will dtining Indias adinss dplying

sat gid tchnlgis. It will als dlp a awk

adpting nw sat gid tchnlgis and idntiy gulatyawks. Th analysis will calculat tun n instnt

a ang sat gid pjcts plannd acss India41.

Th ISGTF has st up wking gups, including Tials

n nw tchnlgis and Tansissin lss ductin and

tht, data gathing and analysis. In th anwhil, asd

n th cndatins th Indian Sat Gid Fu,

th moP is suppting 14 pilt pjct ppsals wth

appxiatly $7 illin (~ INr 400 cs) sat-gid

pilt pjcts acss aius lcatins. Ths ppsals cus

n dis aas th pw sct, including intgatin

nwal ngy sucs with th gid and lwing agggat tchnical & ccial lsss4.

F this ital initiati t succssul, it is ssntial that

th aius dal inistis such as th ministy Pw,

th ministy Nw and rnwal engy, th ministy

Cunicatins and Inatin Tchnlgy and th

ministy eninnt and Fsts, and thi stat ll

cuntpats ust c tgth t l a cn

actin plan. Futh, th stat and natinal gid pats

and thi spcti lcticity gulaty cissins ust

gin a natinwid cllaati dialgu twads dning a

cn undstanding a tuly sat gid inastuctu

India. A tp dwn pscipti pt th cntalgnnt thugh th ISGTF culd lad t cstly dlays,

which wuld sult in th insts and pw pducs

ing n t th instnt pptunitis.


23/40


grId IntEgratIOn IssuEs 3

ImprOvIng WInd FOrECastIng and sChEdulIng43

In India th gid inastuctu is utdatd and an und

instd aspct th natinal inastuctu. Th xisting

lcticity gid cd allws int-stat sal pw y laxing

pisins casting and schduling nwals asd

gnatin. Accding t th ns laid dwn in th 010

Gid Cd (IeGC), wind pw gnats a spnsil

casting thi daily gnatin with accuacy up t 70%. In

eup this quint is cls t 95%. only in th nt

gnatin ing 30% th schduld th wind gnatwill ha t a th unschduld intchang (UI) chags.

on way t c th lack casting and schduling

is t ip th guidanc t wind a dlps n

schduling quints with suital nn-pnal ns

th sht t diu t. With cntinuusly ising

wind pw pntatin in th gid, wind pw gnats

will ha t wk tgth with gid pats and lcticity

distiutin cpanis t addss issus latd t gid

staility and pw quality in th idiat utu.

Schduling quints as put wad y th IeGC, i put in

plac, will nal th gnats t tad pw and cptwith schdulal cnntinal pw n th lcticity tading

plat, thy nsuing asnaly high nus. This is

spcially iptant th cunty as it is a acing a s

pw dcit and an -gwing dand pw. by

a, th iggst adantag casting wind pw will

t ak wind as appa lik cnntinal pw

statins idging th pcptin gap syst pats and

plicyaks.

Hw, patly du t ld and tn liitd inastuctu

and in pat du t a lack pnalizatin nn-cplianc

with casting and schduling quints, IeGCsiplntatin has n dlayd. F th lng-t

gwth pspcts wind pw th industy and th lad

dispatch cnts ust pactily ppa casting and

schduling, t nsu its ull patinalizatin.

Wind a in Tail Nadu vstas India

36 Power Grid Corporation o India (PGCIL) is responsible or inter-state transmission o elec-tricity across India www.powergridindia.com/

37 Reers to an Interchange Schedule which reers to an agreed-upon Interchange Transactionsize (MW), start and end time, beginning and ending ramp times and rate, and type requiredor delivery and receipt o power and energy between the sour ce and sink balancing au-thorities involved in the transaction. www.nerc.com/fles/Glossary_12Feb08.pd

38 Report on Green Energy Corridors: Transmission Plan or Envisaged Renewable Capacity.Volume 1, PGCIL, July 2012. Website accessed on 20-10-12 http://apps.powergridindia.com/PGCIL_NEW/home.aspx

39 Website accessed on 20-10-12 www.isgt.in/

40 Bureau o Energy Efciency, Ministry o Power, Government o India: http://www.bee-india.nic.in/41 Website accessed on 20-10-12 http://www.business-standard.com/india/news/ibm-

teamsbee-to-prepare-or-india8217s-frst-smart-grid-project-/435980/42 Website accessed on 20-10-12 http://www.elp.com/index/rom-the-wires/wire_news_dis-

play/1766416399.html43 See ootnote 32


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4 | dOmEstIC WInd turbInE

manuFaCturIng Industry


25/40


dOmEstIC WInd turbInE manuFaCturIng Industry 4

IndIa: IntErnatIOnal manuFaCturIng hub

estalishd and pn wind tuin tchnlgy in India ldt hug instnts in th sct. India is ging as a aj

wind tuin-anuactuing hu tday. Incasd dstic

dand and xpansin th in-hus anuactuing

capacity th Indian wind industy has sultd in attacting

any nw anuactus int th ay.

As 01, 16 xisting anuactus ha a cnslidatd

annual pductin capacity 9,500 mW. Th

xpctatins a that at last u nw cpanis culd nt

th Indian wind sct th nxt cupl yas. Hnc

y 013/14 than 0 wind tuin anuactus and

tuin supplis wuld pating India.

Indian anuactus a ngaging in th glal akt y

taking adantag lw anuactuing csts in India.

Indian cpanis nw xpt dstically anuactud

wind tuins and lads t Austalia, bazil, eup, USA and

a w th cuntis. S th intnatinal cpanis

with susidiais in India a sucing 80% thi

cpnnts Indian cpnnt anuactus. Lading

anuactus lik Suzln, vstas, encn, rrb engy

including nw ntants lik Gasa, Ge, Sins, rgn

Pwtch and WinWinD ha st up pductin acilitis in

India. Accding t stiats y WISe th annual wind tuinanuactuing capacity is likly t css 10,000 mW duing

th FY 01-013 i all anuactus g ahad with thi

plans.

TuRbIneS FoR loW WInD ReGIMeS

mst pats India xcpt in pckts in th Stat Tail

Nadu ha lw wind gis. Lw wind gis qui

cnsidal changs nt nly in th dsign tuin

cpnnts ut als in gnat cnguatin.

Th tuin dsign and dlpnt jcti is t duc

th cst ngy (Coe). Tuin anuactus usually

utiliz tw paalll appachs ducing pductin csts

and axiizing pw captu, thus ptiizing panc

and ducing th Coe. makt cs in th lw-wind-gi

akt alady nds this appach.

In th cas India, th tnd is akdly cla as shwn

in Tal 3; st th nw anuactus Class III

achins that a suital lw wind gis.

manuactus nw Class II and Class III achins with

nw tchnlgis and high pw captu capailitis.

manuFaCturErs OFFErIng Class II and Class III WInd turbInEs In IndIa

Manuacturer

Technology

Rating (kW) Drive Speed Generator Class

Enercon 800 Gearless Variable Synchronous II-S

GEWind 1,500 Gear Variable DFIG IIA

GEWind 1,600 Gear Variable DFIG II

Suzlon 1,250/2,100 Gear Fixed Asynchronous IIA/III

Suzlon 1,500 Gear Fixed Asynchronous IIIA

Suzlon 2,250 Gear Variable DFIG IIB

VestasIndia 1,650/1,800 Gear Variable Asynchronous IIB/IIIA

RRBEnergy 1,800 Gear Variable Asynchronous II/III

Gamesa 850 Gear Variable DFIG IIA/IIIB

Gamesa 2,000 Gear Variable DFIG IIA/IIIA

GlobalWindPowerLimited 2,500 Gear Variable Synchronous IIIA

InoxWindLimited 2,000 Gear Variable DFIG IIIB

KenersysIndia 2,000 Gear Variable Synchronous IIA

Leitner-Shriram 1,350/1,500 Gearless Variable Synchronous IIA/IIIA

ReGenPowertech 1,500 Gearless Variable Synchronous IIIA/IIIB

WinWinD 1,000 Gear Variable Synchronous IIIB

Source : WISE, 2012


26/40

5 | WInd pOWEr InvEstmEnt

In IndIa


27/40


WInd pOWEr InvEstmEnt In IndIa 5

bginning in th thid quat 008, fws quity and

dt instnt in th glal akts ha n disuptd

y n th lngst unning nancial and cnic cisssinc th 1930s, which has n wsnd y th udgt

cisis in th euzn. Th ac-cnic and institutinal

ntay halth indics ha nt cd sinc thn acss

uch th oeCD. Th tugh nancing ninnt and

tightnd cash fws ha disuptd th ising sta

instnts in wind ngy pjcts. This has had an ipact

n th utlk wind pjcts in India as wll.

Accding t th IeA, $38 tillin instnt is quid t

t pjctd ngy dand thugh t 035. o this, th IeA

pjcts that alst tw-thids incntal ngy dand

in 010-035 will t y natual gas and nwals [Weo,

011]. Glal clan ngy instnt achd a nw cd

$80 illin in 01144. This chaactizs a ky ilstn a

sct that njyd an aag cpund annual gwth at

37% twn 004 and 008, ut thn saw gwth slw

dwn in th ac th widspad cssin in 009. In 011

th ajity instnt was th asst nancing utility-

scal pjcts such as wind as, sla pjcts and iul

plants [bNeF, 0145]. Lking at th wind ngy sct aln,

bNeF xpcts that annual instnt in nsh wind will gw

$65 illin in 010 t $137 illin p ya in 030 with

a signicant ptin this taking plac in ging akts.

In 011, India saw an unpcdntd $10.3 illin instd in clan

tchnlgy, which $4.6 illin was instd in wind ngy. This

accuntd 4% th wlds clan tchnlgy instnts in011. This was aut 5% high than th $6.8 illin instd in

010, and th highst gwth gu any signicant cny

in th wld. Asst nancing utility-scal pjcts cntinud

t th ain typ clan ngy instnt in India,

accunting $9.5 illin in 011. This was ntwthy gin

that th high lnding ats sd th last ya ight

ha ipactd asst nanc adsly. vntu capital and

piat quity instnt als ad a stng cack with

$45 illin instd in 011, than u tis th 010

gu. Th nly aj typ instnt that ll in 011 was in

quity ing aisd ia th pulic akts. 011 saw $01 illin

aisd in cpaisn t a cd $735 illin in 010 whn th

Indian stck akt was at an all-ti high [bNeF, 01a46].

Haing said that, cnt gus pulishd y blg

Nw engy Financ suggst that th ull-ya 01 gu

instnt in clan ngy will all sht 011s cd

$80 illin, althugh wind and sla ngy is likly

t installd th ductin is du t th daatic pic

ductins paticulaly in sla, ut als in wind. I s, 01

wuld th st dwn-ya glal instnt in th

nwal ngy sct at last ight yas. This will ha

an ipact n th Indian akt as wll [bNeF, 0147].

WInd FInanCIng bEyOnd 2012

Aidst ugh winds in th glal wind ngy sct and a

tansitin-phas at gnnt incntis saw signicant

ductins pst mach 01, Indian dlps a uilding w

wind as in cpaisn t 011. Indian tuin anuactus

a unlikly t st th dp in dand with xpts as th

aj akts lik China, th U.S. and th e.U. will s a slw 013.

With th ductin in AD ats, th alanc sht nancing

ats a sudud this ya. With signicant ductin inAD nts this ya it will dicult th industy t

cpnsat th lss this anch insts in th

sht-t. Th IPPs t a alady cittd with thi

unds th aind th scal ya. This has lad t a

akt with liitd liquidity, which will sult in th dstic

akt gwing y uch lss than its 3 GW ang last ya.

T a ctain dg th stalishnt ddicatd dstic

institutinal nanc agncis lik th Indian rnwal engy

Dlpnt Agncy (IreDA), Pw Financ Cpatin

and rual elcticatin Cpatin ha hlpd nwals

accss nancing. Dspit th psnc an institutinal

nancing chanis, und IreDA, th a cnsidalais t scuing lcal nancing.

In cntast t alanc sht nancing, th cnntinal dt-

nancing chanis is nt gad nancing nwal

ngy pjcts, which a typically sn as high-isk, lw

tun pjcts. F st wind ngy pjcts quity

paticipatin piat quity plays is dicult t scu

lagly du t pcptin issus suunding wind pw. In

011 th aj sha nancing wind pw pjcts had

n thugh th asst-nancing ut.

As oct 01, IPPs ha a pjct piplin alst

16 GW; this is an iptant pptunity Indian windpw sct. Ging wad IPPs will a aj di th

wind pw akt in India. IPPs in FY 010-11, accuntd

aut 0 pcnt and in FY 011-1 accuntd

a quat all wind capacity installatins. This tnd is

xpctd t stngth th nxt yas [WISe, 01].

Th adnt IPPs in th wind pw sct has hlpd

t stalish pjct nancing as th nw nal. Tday

an incasing nu dstic anks a cnsiding

nwal ngy pjcts n a nn-cus asis. This shit

in th attitud nancis is fctd in xtndd atuitis

and tn lans and lw wing csts.

44 Website accessed on 20-10-12 http://www.bne.com/PressReleases/view/22245 Website accessed on 20-10-12 http://www.bloomberg.com/news/2012-01-12

/clean-energy-investment-rises-to-a-record-260-billion-on-solar.html46 Website accessed on 20-10-12 http://www.bne.com/PressReleases/view/18647 Website accessed on 20-10-12 http://www.bne.com/PressReleases/view/246


28/40


5 WInd pOWEr InvEstmEnt In IndIa

OptIOns FOr FInanCIng a WInd pOWEr prOj ECt

There are various routes to fnancing a wind power project through banks and other fnancial institutions in India:

1. Full recourse (Corporate guarantees/cash collateral) 2. Limited/non-recourse fnancing

Financing basis Financing basis Creditworthiness Fullrecourse Balancesheetandshareprice/valuationimplications

Cashowoftheproject Non/limitedrecoursetosponsor

Highlights Highlights

Interestratedependsoncreditworthiness Standarddocumentation Usualcreditassessment

Interestratedependsonprojectrisk Lowriskproleandstablecashows Comprehensivedocumentation Structuringeort/cost/time Project,regulatoryandtechnicalriskassessmentbyindependentconsultants

Source: Indian Wind Energy Outlook 2011 /www.vestas.com

on th th hand th cunt-paty cdit isks stat

utilitis ha incasd signicantly. F xapl in Tail

Nadu, IPPs w adsly actd y th signicant

dtiatin in th nancial situatin th stat utility,

which causd lng dlays in paynts t wind pw

pducs.

vntu capital and piat quity s a als iwing

nwals as an ging pptunity. Dals wth

$437.3 illin (~ INr 348.30 cs) w stuck duing

th thid quat this ya and includd pjct nanc, dt

nancing and ntu capital unds48.

Changing akt pcptin is als ndsd y th

paticipatin nwal ngy gnatin cpanis in

th quity akt thugh th IPo ut. F xapl st

cntly th Indian Inastuctu Lasing and Financial

Sics annuncd its plans t list its wind pw usinss

thugh an appxiatly $35-$406 illin usinss tust

IPo in Singap y aly 01349.

Role oF MulTIlaTeRal anD bIlaTeRal FunDS

multilatal unding institutins a ing nw anus

insts in ky dlping cunty akts as pat thicliat nanc ligatins and ad ngy statgis.

Accding t bNeF, dlpnt ank nancing nwal

ngy pjcts s $4.5 illin in 007 t $13.5 illin

in 010, ld y ultilatal dlpnt anks (mDbs) such

as th eupan Instnt bank, Asian Dlpnt bank

and th Wld bank Gup as wll as natinal dlpnt

anks (NDbs) such as KW bankngupp (Gany), China

Dlpnt bank and bNDeS (bazil).

o th sa ti pid, th annual instnt y ths

institutins spcically in wind has incasd $1.3illin

t $7.illin.Th ising pcntag th Wld bank

Gups unding nwal and ngy cincy pjctsin dlping cuntis fcts th gwing intst and

dand ninnt-indly sucs pw.

Th Asian Dlpnt bank (ADb) is inld in augnting

lnding t th nwal ngy sct thugh aius

nancing schs und a ad awk calld Statgy

00. Th statgy stipulats that ADb will hlp dlping

cuntis t thi cnis nt a lw-

can dlpnt pathway, y xpanding th us clan

ngy sucs. Th Intnatinal Financ Cpatin (IFC)

s aius nancing anus thugh dt and quity

paticipatin. by th nd 011 wind psntd 5 pcnt

th IFCs pw ptli50.

bilatal unding agncis a als xtnding suppt t wind

pw dlpnt acss Asia. T na a w, th UnitdStats Agncy Intnatinal Dlpnt (USAID) has

n actily pting dlpnt nwal ngy

thugh its makt Dlpnt rnwal engy

pga, th Chins Dlpnt bank and th KW

(Gan dlpnt ank) ha n nancing clan

ngy instnts in aius dlping cuntis including

India.

Dlpnt anks ha a ky l t play in ilizing

capital whn and wh it is ndd st. Ccial lnds,

acd with glal cnic unctainty and instnts in

unailia akts tn lk t dlpnt anks t shaaius isks, whth pcid al. An n-ging psiti

dialgu twn pjct dlps, anuactus, plitical

and gulaty stakhlds and pulic unding instituts is

th way wad t scu sustainal gwth th a

nancial and ninntal pint iw.

Role oF cDM anD FuTuRe oF caRbon MaRKeTS

Th nthusiastic paticipatin th Indian wind industy in

th Kyt ptcls pjct asd st chanis (Clan

Dlpnt mchanis - CDm) th last dcad hlpd

48 Website accessed on 29-10-12 http://articles.economictimes.indiatimes.com/2012-10-29/news/34798581_1_wind-energy-national-wind-large-scale-project

49 Website accessed on 29-10-12 http://in.reuters.com/article/2012/09/26/ils-india-ir-idINL4E8KQ68020120926

50 GWEC Annual Market Report, 2011 www.gwec.net


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WInd pOWEr InvEstmEnt In IndIa 5

ais awanss and uilt tndus capacity in th akt

t al t undtak pjcts with intnatinally applid

du dilignc. Th CDm was dsignd as a cliat nanc

instunt t dli additinal nancing sustainal and

clan dlpnt in dlping cuntis.

India has th scnd highst nu wind pw pjcts

gistd und th CDm. by th nd Q1 in 01, India

accuntd 18 pcnt Cers y lu. Wind

pw accuntd appxiatly 10 pcnt all Cers

issud t Indian CDm pjcts as may 0151. Hw, th

cntinuatin th CDm (in its cunt ) and th siz

th CDm akt ynd 31st Dc 01 ain in dut.

Th discussin is ing twads Nw makt mchaniss5

asd n th cnt Duan Plat53, within th UNcliat talks a pst 00 glal cliat agnt. In th

anwhil nw natinal can akts (Austalia, China,

Suth Ka, U.S. rGGI54) a pning up acss th wld,

which culd cncialy st th tnd a ad uptak

akt asd chaniss that allw th dstic cdits

and -sts asd cdits. Th st cas still wuld a glal

cliat taty that hlps st a pic n can issins.

STRenGThenInG InveSTMenT TRenDS

In 011, clan ngy instnt in India was utstanding,

du t th iping cst-cptitinss th wind and

sla ngy in th cunty. Tday uch th Indian pw

sct is stuggling t t its tagts cnntinal pw

capacity. Thus t ing th wind industy ack n tack it is

ssntial that instnt gad plicy guidanc is aailal

at th alist.

In th diu and lng-t dict susidis, which inl

lag lus nancing, culd sustitutd with intst

susidis dt. Thy th gnnt culd cntiut

t signicant capacity additin lagd thugh sall

chunk instnt. by hlping t ing dwn th isk

pl pjcts thugh such a chanis, it culd hlpdlps ach nancial clsu ali.

T achi sustaind gwth in th wind sct, dal and

stat gnnts will ha t nsu th llwing: st,

this wuld qui an aly dcisin n th at and lngth

th GbI; scnd, that tansissin lins a aailal

pjcts; thid, that nwal puchas spcicatins a

ncd; and, nally, that wind pjct dlps ci

tily paynt th pw thy gnat.

small WInd and hybrId systEms In IndIa

Th glal akt sall wind tuins (SWTs) has n n th upswing th last tw t th yas. This is din y

apidly gwing ngy dand, high ssil ul pics and ipd SWT tchnlgy, which can dplyd a dis

pl applicatins, th in gid-tid and stand- aln ds.

With th incasing shtall in pw supply and ngy acss th cunty, India culd nt signicantly xpliting

th ptntial ic-gnatin tchnlgis that can t ngy nds und th distiutd gnatin d, s as

t pid lng-t slutins. WISe stiats Indias ic-gnatin ptntial at aut 83 GW. Hw, csts a a

aj hudl and plicy suppt nds t intd twads pting ass anuactuing and aly adptin ths

ic-gnatin ptins.

A sall annual akt such systs (~ 300-400kW) cuntly xists in India; th capital susidy pga th

mNre lagly dis it. mst th cunt installatins a th stand-aln typ. by th nd th 11 th Plan pid a

cuulati capacity 1647 kW wind-sla hyid systs had n installd55.

Wind a in Tail Nadu vstas India

51 IGES Market Mechanisms Country Fact Sheets (July 2012) http://www.iges.or.jp/en/cdm/report_country.html

52 Website accessed on 20-10-12 http://www.iges.or.jp/en/cdm/report_nmm.html

53 Website accessed on 20-10-12 o the UN Framework Convention on Climate Change COP17 www.unccc.int54 U.S. Regional Greenhouse Gas Initiative www.rggi.org/55 Website accessed on 20-10-12 http://www.mnre.gov.in/schemes/ogrid/small-wind/


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6 | grOWth sCEnarIOs FOr thE

IndIan WInd markEt

y


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grOWth sCEnarIOs FOr thE IndIan WInd markEt 6

glObal WInd pOWEr sCEnarIOs FOr2020 and 2030

Th a sal pulishd scnais that xain th utul wind pw glally as a pat th ncssay ngy

syst haul twads a clan ngy utu. Th Glal

Wind engy Cuncil dlpd its scnais in cllaatin

with Gnpac Intnatinal and th Gan Aspac

Cnt (DLr). Ths scnais a updatd innially. Th

latst sultant pulicatin - th Glal Wind engy outlk01 (GWeo)- st lks twad 00, and thn nwads

t 030 and 050. S th th pinnt scnais

a th Wld engy outlk (011) th Intnatinal

engy Agncy (IeA) and th engy []lutin: A Sustainal

Wld engy outlk y Gnpac (01).

glObal WInd EnErgy OutlOOk 2012: sCEnarIOs and assumptIOns

New Policies Scenario (IEA) Moderate Scenario (GWEO) Advanced Scenario (GWEO)

Previous editions o GWEO used the IEA World EnergyOutlooks Reerence scenario as the baseline in this

exercise. That scenario is basically an assumption o the

status quo, and while it still exists within the World

Energy Outlook (WEO) ramework (as the Current

Policiesscenario), it is no longer the central scenario.

The New Policies scenario is based on assessment o

current directions and intentions in both national and

international energy and climate policy, even though

they may not yet have been incorporated into ormal

decisions or enacted into law.

Examples o this would include the emissions reduction

targets adopted in Cancun in 2010, the variouscommitments to renewable energy and eciency at

national and regional level, and commitments by

governments in such ora as the G-8/G-20, the Clean

Energy Ministerial, etc. The New Policies scenario has

taken its place at the center o the WEO analysis, although

the dierence between that and the old Reerence

Scenario when it comes to wind power is marginal. The

IEA scenarios go out to 2035 and were extrapolated to

2050 by DLR.

The GWEO Moderate scenario has many o the samecharacteristics as the IEA New Policies Scenario, taking

into account all policy measures to support renewable

energy either already enacted in the planning stages

around the world, and at the same time assuming that

the commitments or emissions reductions agreed by

governments at Cancun will be implemented, although

on the modest side.

At the same time it takes into account existing and

planned national and regional targets or the uptake o

renewable energy in general and wind energy in

particular, and assumes that they are in act met.

Through the fve-year period out to 2016, the moderatescenario is very close to our annual fve-year market

orecast, based on industry orders and planning as well as

intelligence rom our global network about new and

emerging markets. Ater 2016 it is dicult to make a

precise orecast given the current set o global

uncertainties.

The most ambitious scenario, the Advancedscenario explores the extent to which the wind

industry could grow in a best case wind energy

vision, but still well within the capacity o the

industry as it exists today and is likely to grow in

the uture.

It assumes an unambiguous commitment to

renewable energy in line with industry

recommendations, the political will to commit to

appropriate policies and the stamina to stick with

them.

It also assumes that governments enact clear and

eective policies on carbon emission reductions inline with the now universally agreed objective o

keeping global mean temperature rise below 2C

above pre-industrial temperatures, recognizing

that wind power is an absolutely critical technology

to meeting the frst objective in the battle to stay

below 2C which is getting global emissions to

peak and begin to decline beore the end o this

decade.

Assumptions on growth rates

Growth rates in the GWEO scenarios are based on a combination o historical trends, current and planned po licies and trends, new and emerging markets or wind power, andassumptions on the direction o overall climate and energy policy. While double-digit growth rates as assumed in bo th the Moderate and Advanced scenarios out to 2020 may

seem high or a manuacturing industry, actual wind industry cumulative growth rates have averaged about 28% or the past fteen years. Interestingly, annual market growth

rates over the period are also about 28%, although the inter-annual variability is much higher due to the vicissitudes o the marketplace and the state o the global economy.

The cumulative market growth fgures are a more useul way to look at the industry over the longer term.

In the Advanced scenario, cumulative growth rates start o well below the historical average at 21%, recover slightly in the middle o this d ecade and then taper o to 13% by

the end o the decade, dropping to 6% by 2030. The Moderate scenario starts with about 19% growth in 2012, tapering o gradually to 11% by 2020 and then also to 6% by

2030, while the IEA New Policies Scenario starts at 16% in 2012, sinking to 6% by 2020 and then 4% by 2030.

It should be borne in mind that cumulative market growth fgures will inevitably drop over time in almost any scenario as the size o the cumulative market grows; although

even small percentage increases a decade out rom now will mean a large actual increase in the quantity o wind power deployed.


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6 grOWth sCEnarIOs FOr thE IndIan WInd markEt

GWeo ScenaRIo ReSulTS

Whil th IeA Nw Plicis scnai shws a asically fat

akt and slightly dcasing akt wind pw th

nxt tw dcads, th GWeo scnais paint a pictu tw

dint utus:

Th mdat scnai is likly in a wld which

cais n lss th way it has n, with wind pw

cntinuing t gain gund ut still stuggling against haily

susidizd incunt ngy sucs, and with th patchwk

can issin ductin asus that xists at psnt,with a lw pic n can issins, wh n xists at all.

Th Adancd scnai shws th ptntial wind pw t

pduc 0% glal lcticity supply in a wld

wh th is stng plitical citnt and intnatinal

cpatin t ting alady agd cliat chang gals,

nhancing ngy scuity, daatically ducing sh wat

cnsuptin and cating illins nw js aund th

wld.

Th IeA Nw Plicis scnai pjcts that annual wind ngy

akts will stay ssntially fat ut t 015, and thn shink

t aut 10% lw th 011 akt th scnd hal this dcad. It thn pjcts a gadual dcas in th annual

akt t 030 and ains fat th st th pid.

on th asis this, cuulati installd capacity wuld still

ach 586 GW y 00, and 917 GW y 030. Inically, th

00 nu 586 GW is alst xactly th sa as th

IeA nc scnai pdictd 030 tw yas ag.

Th GWeo mdat scnai llws th lins u sht-

t akt pjctins ut thugh 016, with annual

akt siz tpping 70 GW y 00 a ttal cuulati

installd capacity 760 GW y that dat. W ha takn int

accunt what lks lik a y dicult ya in 013, which

cntiuts t a slightly cnsati pjctin

00 than w ad tw yas ag, n thugh th akt

has utpd th dat scnai th past twyas. Und this scnai,

India Wind Energy Outlook 2012

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