This is a Report describes the overview of the renewable energy sources in India and potentiality of power generation and also includes the rules and regulations for the non conventional energy.
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Challenges & opportunities for renewable energy in india
1. CHALLENGES & OPPORTUNITIES FOR
RENEWABLE ENERGY IN INDIAN PERSPECTIVE
United Business Institutes
Belgium, Europe
PROJECT REPORT
Submitted in partial fulfilment of the requirements for the award of the
INTERNATIONAL MBA IN POWER
By
SOUMYADEEP BHUNIA
(UBI/MBA/I/AP11/3389)
Under the guidance of
Mr. VIVEK ZAVERI
(Manager Energy Audit)
JARO EDUCATION
MUMBAI
January 2012
2. PROJECT REPORT: Challenges & Opportunities For
“Renewable energy in Indian Perspective
Renewable Perspective”
DECLARATION
I, Soumyadeep Bhunia hereby declare that this project report titled Challenges &
Opportunities for Renewable Energy in Indian Perspective submitted in partial
or nergy
fulfilment of the requirement for the International MBA in Power is my original work
and it has not formed the basis for the award of any other degree.
ot
(Signature of the Student)
Soumyadeep Bhunia
Place: Ahmedabad
Date: 30th January 2012
(I)
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3. PROJECT REPORT: Challenges & Opportunities For
“Renewable energy in Indian Perspective
Renewable Perspective”
ACKNOWLEDGMENT
It gives me a great sense of achievement and pleasures to present this report on my
MBA Final project undertaken in the IInd semester as a part of o my curriculum. I
nd
owe special debt and gratitude to Mr. Vivek Zaveri (Manager Energy Audit at V
Manager
Conserve Energy Solution India for his consistent support and invaluable
India)
guidance throughout this endeavour. Whenever I was puzzled and confused about
the concepts, his innovative ideas gave me a way to proceed. His sincerity,
thoroughness and perseverance had been a great source of inspiration for me. It is
only his cognizant guidance and motivation that my efforts saw light of the day.
I also acknowledge all the energy experts from where I gathered the data for this
project.
I also take this opportunity to acknowledge my friends and colleague for their
pportunity
contribution & myself for my individual efforts in the completion of this report.
Finally, I have no words to express my deep sense of gratitude to my institute Jaro
Education on behalf of United Business Institute for giving me this opportunity to
prepare this project report and in particular Mr. V. Zaveri for his guidance and
repare report,
support.
Regards,
SOUMYADEEP BHUNIA
(II)
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4. PROJECT REPORT: Challenges & Opportunities For
“Renewable energy in Indian Perspective
Renewable Perspective”
CERTIFICATE FROM PROJECT GUIDE
This is to certify that the work contained in this report on “Challenges &
Opportunities for Renewable Energy in Indian Perspective” by Soumyadeep Bhunia
student of International MBA in Power Jaro Education on behalf of United Business
Power,
Institute, Belgium was done under my guidance and supervision for his Final Project
during the IInd semester.
To the best of my knowledge & belief the work has been based on the investigation
made, data collected & analyzed by him & this work has not been submitted
anywhere else for any other university or institution.
The work has been completed to my satisfaction.
30.01.2012
Date: _____________
________ ____________________
Mr. Vivek Zaveri
Ahmedabad
Place: _____________ Manager
V Conservation Energy
onservation
Solutions India Pvt. Ltd.
Noida
(III)
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5. PROJECT REPORT: Challenges & Opportunities For
“Renewable energy in Indian Perspective
Renewable Perspective”
PREFACE
Renewable energy in India is a sector that is still undeveloped. India was the first
country in the world to set up a ministry of non conventional energy resources, in
non-conventional
early 1980s. However its success has been very spotty. In recent years India has
been lagging behind other nations in the use of renewable energy (RE). The share of
nations
RE in the energy sector is 10.63 % (as on 31/03/11) of total generation capacity of
India. Renewable energy in India comes under the purview of the Ministry of New
and Renewable Energy.
80% of global population lives in developing areas. Of the 6.0 billion populations, in
lation
the OECD countries the total number is approximately 1.2 billion – North America
(0.4), Europe (0.6), Asia Pacific (0.2). In the non OECD countries, the population is
non-OECD
the balance 80% and i.e. 4.8 billion consisting of Asia Pacific (3.2), Russia
Russia-Caspian
(0.3), Middle-East (0.2), Africa (0.8) and Latin America (0.4). By the year 2030, the
East
global population is projected to be 8.0 billion rising at the rate of 0.9% per year and
in the year 2030, the OECD countries would consist of North America (0.5), Europe
0,
(0.6) and Asia Pacific (0.2), the total being 1.3 from the present level of 1.2 billion.
The balance 7.7 billion would be in non OECD countries. Therefore, during the
non-OECD
period 2005-2030, the population rise in the non OECD countries would be higher
non-OECD
than the population growth in the OECD countries. And, as a result, by the year
2030, the global population in the OECD countries would be a little more than 16%
and the balance about 84% would in t non-OECD countries.
the
As regards energy consumption, 16% of the global population in the OECD
countries, would consume, by the year 2030, more than 40% of energy and the
balance about 84% of the global population in the non OECD areas would consume
non-OECD
a little less than 60% of the total energy consumed in the world. No doubt, during the
le
period 2005 to 2030, the rate of growth of energy consumption in the non
non-OECD
countries would be higher than in OECD countries and would vary between 1.3% in
the Russian-Caspian area to 3.2% in the Asia Pacific areas, as opposed to the rate
an
of growth of energy consumption during this period in the OECD countries being in
the range of 0.6% in North America to 0.9% in the Asia Pacific region.
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6. PROJECT REPORT: Challenges & Opportunities For
“Renewable energy in Indian Perspective
Renewable Perspective”
Still as mentioned earlier, by the year 2030, 16% of global population would
by
consume as much as 40% of the energy and the balance 84% of the global
population would consume less than 60% of energy. Providing access to adequate
energy to their people is really a challenge for developing countries.
developing
India is one of the countries where the present level of energy consumption, by world
standards, is very low. The estimate of annual energy consumption in India is about
330 Million Tones Oil Equivalent (MTOE) for the year 2004. Accordingly, t
the per
capita consumption of energy is about 305 Kilogram Oil Equivalent (KGOE). As
compared to this, the energy consumption in some of the other countries is of the
order of over 4050 for Japan, over 4275 for South Korea, about 1200 for China,
about 7850 for USA, about 4670 for OECD countries and the world average is about
1690.
Total Installed Capacity of power generation in India (as on 30
30-06-2011) is
176,990.40 MW. Among them a
. about 65.34% of the electricity consumed in India is
generated by thermal power plants, 21.53% by hydroelectric power plants, 2.70% by
nuclear power plants and 10.42% by Renewable Energy Sources. More than 50% of
India's commercial energy demand is met through the country's vast coal reserves.
The country has also invested heavily in recent years in renewable energy utilization,
heavily
especially wind energy. In 2010, India's installed wind generated electric capacity
was 14,550 MW. Additionally, India has committed massive amount of funds for the
construction of various nuclear reactors which would generate at least 30,000 MW.
reactors
In July 2009, India unveiled a $19 billion plan to produce 20,000 MW of solar power
by 2022.
India has a vast supply of renewable energy resources, and it has one of the largest
programs in the world for deploying renewable energy products and systems.
Indeed, it is the only country in the world to have an exclusive ministry for renewable
energy development, the Ministry of Non Conventional Energy Sources (MNES).
Non-Conventional
Since its formation, the Ministry has launched one of the world’s largest and most
of
ambitious programs on renewable energy. Based on various promotional efforts put
in place by MNES, significant progress is being made in power generation from
renewable energy sources. In October, MNES was renamed the Ministr of New and
Ministry
Renewable Energy.
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7. PROJECT REPORT: Challenges & Opportunities For
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Renewable Perspective”
Specifically, 3,700 MW are currently powered by renewable energy sources. This is
projected to be 10,000 MW from renewable energy by 2012. The key drivers for
renewable energy are the following:
1. The demand-supply gap, especially as population increases
supply
2. A large untapped potential
3. Concern for the environment
4. The need to strengthen India’s energy security
5. Pressure on high-emission industry sectors from their shareholders
emission
6. A viable solution for rural electrification
Also, with a commitment to rural electrification, the Ministry of Power has accelerated
the Rural Electrification Program with a target of 100,000 villages by 2012.
In recent years, India has emerged as one of the leading destinations for investors
from developed countries. This attraction is partially due to the lower cost of
ed
manpower and good quality production. The expansion of investments has brought
benefits of employment, development, and growth in the quality of life, but only to the
major cities. This sector only represents a small portion of the total population. The
remaining population still lives in very poor conditions.
India is now the eleventh largest economy in the world, fourth in terms of purchasing
power. It is poised to make tremendous economic strides over the next ten years,
economic
with significant development already in the planning stages. This report gives an
overview of the renewable energies market in India. We look at the current status of
renewable markets in India, the energy needs of the country, forecasts of
consumption and production, and we assess whether India can power its growth and
its society with renewable resources.
The Ministry of Power has set an agenda of providing Power to All by 2012. It seeks
to achieve this objective through a comprehensive and holistic approach to power
through
sector development envisaging a six level intervention strategy at the National,
State, SEB, Distribution, Feeder and Consumer levels.
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8. PROJECT REPORT: Challenges & Opportunities For
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Renewable Perspective”
EXECUTIVE SUMMARY
Secure, reliable and affordable energy supplies are fundamental to global economic
stability and growth. The challenges ahead of us include the adequacy of energy
supplies, the threat of disruptive climate change and the huge investment
requirements to meet the growing global energy needs, particularly in the developing
particularly
countries.
Future energy demand and supply are subject to numerous uncertainties, most of
which are difficult to predict. Such as energy prices, particularly oil prices, global
economic growth rate, demographic changes, technological advances, government
technological
policies and consumer behaviour. In such a complex market, energy projections are
primarily based on historical information. The primary objective of any energy
energy-
scenario analysis must be to analyze the main driving forces that wou shape our
would
energy future and the options ahead of us, rather than making accurate quantitative
projections. According to Paul Saffo (2007) ―Whether a specific forecast actually
Whether
turns out to be accurate is only part of the picture -- even a broken clock i right twice
is
a day. Above all, the forecaster's task is to map uncertainty, for in a world where our
actions in the present influence the future, uncertainty are opportunity.
This programme is looked after by the Ministry of Non Conventional Sources of
Non-Conventional
energy. Since the availability of fossil fuel is on the decline therefore, in this backdrop
ergy.
the norms for conventional or renewable sources of energy (RSE) is given
importance not only in India but has attracted the global attention.
The main RSE are as follows:
Solar Power
Wind Power
Hydro Power
Geo Thermal
Tidal/Ocean energy
Ocean
Bio fuel/Alternative fuels
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9. PROJECT REPORT: Challenges & Opportunities For
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Renewable Perspective”
Evolution of power transformer technology in the country during the past five
decades is quite impressive. There are manufacturers in the country with full access
to the latest technology at the global level. Some of the manufacturers have
impressive R&D set up to support the technology.
Renewable energy is very much promoted by the Chinese Government. At the same
time as the law was passed, the Chinese Government set a target for renewable
sed,
energy to contribute 10% of the country’s gross energy consumption by 2020, a
huge increase from the current 1%.
It has been felt that there is rising demand for energy, food and raw materials by a
population of 2.5 billion Chinese and Indians. Both these countries have large coal
pulation
dominated energy systems in the world and the use of fossil fuels such as coal and
oil releases carbon dioxide (Co2) into the air which adds to the greenhouse gases
which lead to global warming.
d
The power generation in the country is planned through funds provided by the
Central Sector, State Sector and Private Sector. The power shortages noticed is of
the order of 11%. In the opinion of the experts such short fall can be red
reduced
through proper management and thus almost 40% energy can be saved. It has been
noticed that one watt saved at the point of consumption is more than 1.5 watts
generated. In terms of Investment it costs around Rs.40 million to generate one MW
of new generation plant, but if the same Rs.40 million is spent on conservation of
eration
energy methods, it can provide up to 3 MW of avoidable generation capacity.
There are about 80,000 villages yet to be electrified for which provision has been
made to electrify 62,000 villages from grid supply in the Tenth Plan. It is planned that
participation of decentralized power producers shall be ensured, particularly for
electrification of remote villages in which village level organizations shall play a
ectrification
crucial role for the rural electrification programme.
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10. PROJECT REPORT: Challenges & Opportunities For
“Renewable energy in Indian Perspective
Renewable Perspective”
TABLE OF CONTENTS
Contents
DECLARATION ................................ ......................................... I
................................................................................................................................
ACKNOWLEDGMENT.............................................................................................................................
.............................................................................................................................II
.............................................................................................................................
CERTIFICATE FROM PROJECT GUIDE....................................................................................................III
GUIDE..................................................................................................
PREFACE.............................................................................................................................
...............................................................................................................................................IV
.............................................................................................................................
EXECUTIVE SUMMARY........................................................................................................................VII
SUMMARY........................................................................................................................
1.0 INTRODUCTION ................................
............................................................................................................................... 13
...............................
1.1 Primary and Secondary Energy ................................................................................................ 13
...................................
1.2 Commercial Energy and Non Commercial Energy ................................................................
...................................... 14
1.2.1 Commercial Energy ................................
................................................................................................
.............................................. 14
1.2.2 Non-Commercial Energy ................................................................................................
Commercial ...................................... 14
1.3 Renewable and Non-Renewable Energy................................................................
Renewable ..................................................... 14
1.4 PURPOSE OF STUDY ................................
................................................................................................
................................................ 15
1.5 OBJECTIVE OF THE PROJECT
PROJECT................................................................................................ 16
....................................
1.6 IDENTIFICATION OF PROBLEM ................................................................................................ 16
................................
1.7 RESEARCH METHODOLOGY ................................................................................................ 17
....................................
2.0 INDIAN ENERGY AND CLIMATE CHANGE STATUS ................................................................
....................................... 17
2.1 Commercial Energy Consumption .............................................................................................. 19
..............................
2.2 The Power Market in India and the Role of Renewable Energy ................................
................................................. 20
2.3 Power Consumption................................
................................................................................................
.................................................... 22
2.4 Power Generation Capacity ................................................................................................
........................................ 24
3.0 THE STATUS OF RENEWABLE ENERGY IN INDIA................................................................
.............................................. 28
3.1 Renewable Energy Share of Electricity ................................................................
....................................................... 29
3.2 Renewable Energy Application in Industrial Use and Transportation ................................
........................................ 31
3.3 Grid Connection and Status Overview ................................................................
........................................................ 33
3.4 Tradable Renewable Energy Credits ................................................................
........................................................... 33
4.0 VARIOUS SOURCE OF RENEWABLE ENERGY OPPORTUNITIES IN INDIA ................................
......................................... 34
4.1 Solar ................................................................
................................................................................................
............................................ 35
4.1.1 Solar energy potential ................................................................................................
.......................................... 36
4.1.2 Solar thermal power generation technologies ................................................................ 37
....................................
4.1.3 Solar thermal power generation program of India .............................................................. 39
..............................
4.1.4 Opportunities for solar thermal power generation in India ................................
................................................ 39
4.1.5 PV & CSP Ratio ................................
................................................................................................
..................................................... 40
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4.1.6 Domestic Content (PV) ................................................................................................
......................................... 40
4.1.7 Domestic Content (CSP) ................................................................................................
....................................... 41
4.1.8 Jawaharlal Nehru National Solar Mission ................................................................
............................................ 42
4.1.8 Solar Farming Potential in India ................................................................
........................................................... 43
4.1.9 Challenges ................................
................................................................................................
............................................................ 48
4.2 Wind ................................................................
................................................................................................
............................................ 48
4.2.1 Wind Energy for power generation ................................................................
..................................................... 48
4.2.2 India’s Unique Proposition for Wind Energy:
Energy:................................................................
....................................... 50
4.2.3 Wind Power Capacity Installed in India ................................................................
............................................... 52
4.2.4 Wind Energy Business Opportunities in India ................................................................
...................................... 54
4.2.5 Power Plant Development stapes and opportunity in India ................................
................................................ 55
4.2.6 Central and State Government Policies for Supporting Wind Power Projects .................... 57
Policies
4.3 Small Hydro ................................
................................................................................................................................ 60
.................................
4.3.1 Introduction ................................
................................................................................................
......................................................... 60
4.3.2 Small Hydro Power Programme ................................................................
........................................................... 61
4.3.3 Small hydro installed capacity and progress................................................................
........................................ 62
4.3.4 Standards for Small Hydro ................................................................................................ 64
...................................
4.3.5 States with Policy for Private SHP Proje ................................................................
Projects .......................................... 64
4.3.6 Watermills ................................
................................................................................................
............................................................ 65
4.3.7 Manufacturing Status
Status................................................................................................
........................................... 66
4.3.8 Technical and consultation Services ................................................................
.................................................... 66
4.3.9 Real Time Digital Simulator for SHP ................................................................
..................................................... 66
4.3.10 Constraints in SHP ................................
................................................................................................
.............................................. 66
4.4 Geothermal Energy ................................
................................................................................................
..................................................... 66
4.4.1 Status and Trends ................................
................................................................................................
................................................ 67
4.4.2 Characteristics and Applications of Geothermal Energy ................................
..................................................... 68
4.4.3 Geothermal Energy Scenario: India and world ................................................................ 69
....................................
4.4.4 Technology ................................
................................................................................................
........................................................... 70
4.4.5 Potential India ................................
................................................................................................
...................................................... 72
4.4.6 Historical Capacity & Consumption Data ................................................................
............................................. 73
4.4.7 Cost, Price and Challenges ................................................................................................ 74
...................................
4.4.8 Drilling ................................
................................................................................................................................ 75
..................................
4.4.9 Transmission ................................
................................................................................................
........................................................ 75
4.4.10 Barriers ................................
............................................................................................................................... 76
...............................
4.4.11 Geo Thermal companies in India ................................................................
....................................................... 76
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Renewable Perspective”
4.4.12 RD&D Priorities ................................
................................................................................................
.................................................. 76
4.5 Tidal Energy ................................
................................................................................................................................ 77
.................................
4.5.1 Technology ................................
................................................................................................
........................................................... 78
4.5.2 Potential of tidal energy in India ................................................................
.......................................................... 78
4.5.3 Proposed tidal power projects in India ................................................................
................................................ 79
4.5.4 Kachchh Tidal Power Project ............................................................................................... 79
...............................
4.5.5 Durgaduani Creek ................................
................................................................................................
................................................ 79
4.5.6 Tidal Barriers ................................
................................................................................................
........................................................ 80
4.6 Wave Power ................................
................................................................................................................................ 81
................................
4.6.1 Technology ................................
................................................................................................
........................................................... 81
4.6.2 Potential of Wave energy in India................................................................
........................................................ 81
2.6.3 Barriers ................................
................................................................................................................................ 82
.................................
4.7 Biofuel ................................
................................................................................................................................
......................................... 82
4.7.1 Economics of biodiesel production from Jatropha .............................................................. 83
..............................
4.7.2 Project operation and crediting period
period................................................................
................................................ 84
4.7.3 Project cost and financing ................................................................................................ 84
....................................
4.7.4 Project status ................................
................................................................................................
....................................................... 84
4.7.5 Biodiesel industry growth ................................................................................................ 84
....................................
5.0 CONCLUSION..................................................................................................................................86
CONCLUSION.....................................................................................................................
6.0 BIBLIOGRAPHY................................................................................................................................89
..............................................................................................................................
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“Renewable energy in Indian Perspective
Renewable Perspective”
1.0 INTRODUCTION
Energy is one of the major inputs for the economic development of any country. In
the case of the developing countries, the energy sector assumes a critical
importance in view of the ever increasing energy needs requiring huge investments
ever-increasing
to meet them.
Energy can be classified into several types based on the following criteria:
• Primary and Secondary energy
• Commercial and Non commercial energy
• Renewable and Non-Renewable energy
Renewable
1.1 Primary and Secondary Energy
Primary energy sources are those that are either found or stored in nature. Common
primary energy sources are coal, oil, natural gas, and biomass (such as wood).
Other primary energy sources available include nuclear energy from radioactive
substances, thermal energy stored in earth’s interior, and potential energy due to
stored
earth’s gravity. The major primary and secondary energy sources are shown in
Figure 1.
Figure 1: Major Primary and Secondary Sources
Primary energy sources are mostly converted in industrial utilities into secondary
energy sources; for example coal, oil or gas converted into steam and electricity.
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“Renewable energy in Indian Perspective
Renewable Perspective”
1.2 Commercial Energy and Non Commercial Energy
1.2.1 Commercial Energy
The energy sources that are available in the market for a definite price are known as
commercial energy. By far the most important forms of commercial energy are
electricity, coal and refined petroleum products. Commercial energy forms the basis
of industrial, agricultural, transport and commercial development in the modern
ial,
world. In the industrialized countries, commercialized fuels are predominant source
not only for economic production, but also for many household tasks of general
population.
Examples: Electricity, lignite, coal, oil, natural gas etc.
1.2.2 Non-Commercial Energy
Commercial
The energy sources that are not available in the commercial market for a price are
classified as non-commercial energy. Non commercial energy sources include fuels
commercial Non-commercial
such as firewood, cattle dung and agricultural wastes, which are traditionally
wood,
gathered, and not bought at a price used especially in rural households. These are
also called traditional fuels. Non commercial energy is often ignored in energy
Non-commercial
accounting.
Example: Firewood, agro waste in rural areas; solar energy for water heating,
wood, for
electricity generation, for drying grain, fish and fruits; animal power for transport,
threshing, lifting water for irrigation, crushing sugarcane; wind energy for lifting water
and electricity generation.
1.3 Renewable and Non-
-Renewable Energy
Renewable energy is energy obtained from sources that are essentially
inexhaustible. Examples of renewable resources include wind power, solar power,
geothermal energy, tidal power and hydroelectric power (See Figure 2). The most
power
important feature of renewable energy is that it can be harnessed without the release
of harmful pollutants. Non-renewable energy is the conventional fossil fuels such as
renewable
coal, oil and gas, which are likely to deplete with time.
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15. PROJECT REPORT: Challenges & Opportunities For 15
“Renewable energy in Indian Perspective
Renewable Perspective”
Figure 2: Renewable and Non-Renewable Energy
1.4 PURPOSE OF STUDY
To provide an overview of renewable energy sources available in India and the
o
potentiality of the various resources The government of India is formulating policies
ity resources.
to promote the application of renewable energy technologies. Va
Various opportunity
and constrain to develop new Renewable Energy projects in different location as per
available resource will assist the process of developing renewable energy sector for
India.
In terms of scope:
The study covers solar energy, wind energy, small hydro, wave energy and
geothermal energy
The study compares estimates of the cost of electricity produced from
renewable energy and the present cost of fossil fuel based electricity
ewable
generated in India
The study presents an assessment of available renewable energy
he
technologies and steps of business developments in India considering the
available renewable energy resou
resources, strategic location with ongoing projects
overview
The study considers mechanisms used to provide financial incentives for
promoting renewable energy projects, and identifies mechanisms which could
be applied in India.
The technological development of renewable energy technologies is an ongoing
process and technologies which are not economically viable today may very soon
become relevant for India due to the present rapid technological development of
renewable energy technologies.
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“Renewable energy in Indian Perspective
Renewable Perspective”
1.5 OBJECTIVE OF THE PROJECT
To provide an overview of renewable energy resources and recent
development status
Detailed geographical location identification for different sources of renewable
energy
To make an overall cost estimation overview for power generation in selective
renewable energy source
Preparation of business development steps for selective resources
Making a brief of renewable energy future in I
India.
1.6 IDENTIFICATION OF PROBLEM
India is perceived as a developing country, but it is developing at a pace that is not
matched by many others. We have experienced significant economic growth. Yet the
fact remains that our growth is constrained by energy supply and availability.
Although we have seen an impressive increase in installed capacity additio from
addition,
barely about 1,350 MW at the time of independence (1947) to about 160,000 MW
today, over 90,000 MW of new generation capacity is required in the next seven
years. A corresponding investment is required in transmission and distribution.
The increasing appetite for energy that has developed in the recent past has been
ng
further complicated by rapidly diminishing conventional sources, like oil and coal. To
further add to the problems of increased demand and constrained supply, there are
serious questions about pursuing a fossil fuel led growth strategy, especially in the
fuel-led
context of environmental concerns. The challenge facing a developing nation such
as ours is to meet our increasing energy needs while minimizing the damage to the
environment.
This is why, while striving to bridge our energy deficit, India want to increase the
, wants
share of clean, sustainable, new and renewable energy sources. Whether or not
renewable energy completely replaces fossil fuel, we are determined to develop
renewable energy to its fullest potential.
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1.7 RESEARCH METHODOLOGY
1.7.1 DATA COLLECTION:
The task of data collection begins after a research problem has been defined and the
research design/plan chalked out. The data are collected in order to get the result of
the problem.
1.7.2 SECONDARY DATA:
These are the data which have been collected by desktop study which have already
been passed through the statistical process. In this the researchers have to decide
which sort of data he would be going to use. So the secondary data is also collected
in order to get the information. The data collected was from the articles by
distinguished publications, manuals, journals, magazines, and books.
1.7.3 SAMPLE DESIGN:
The sample is taken from the various government and non government web
websites as
real time data was not possible to get due to immobility and the time factor. The
method used to select sample is Convenient Sampling Method.
In this study I have taken the data from various sites of to analyze Challenges &
Opportunities for “Renewable energy in Indian Perspective”. For this I have analyzed
ewable Perspective”.
the charts, and diagrams.
2.0 INDIAN ENERGY AND CLIMATE CHANGE STATUS
In 2008, India accounted for 17.7% of the world population but was the fifth
fifth-largest
consumer of energy, accounting for 3.8% of global consumption. India’s total
3.8%
commercial energy supply is dominated by coal and largely imported oil with
largely-imported
renewable energy resources contributing less than 1% (this does not include hydro >
25 MW). Coal also dominates the power generation mix, tho
though renewable
resources now account for approximately 10% of installed capacity. The current
power-generating capacity is insufficient to meet current demand, and in 2009
generating 2009–2010,
India experienced a generation deficit of approximately 10% (84 TWh) and a
corresponding peak load deficit of 12.7% (over 15 GW). India’s frequent electricity
esponding
shortages are estimated to have cost the Indian economy 6% of gross domestic
product (GDP) in financial year 2007 2008. To power the economic growth currently
2007–2008.
being targeted, it is estimated that India will need to more than double its installed
t
generating capacity to over 300 GW by 2017. In recent years, control over
generating facilities has shifted from being dominantly controlled by the states to the
federal government and private entities, including those who have set up captive
private
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power plants to power their industrial facilities. The private sector is dominant in
renewable energy generation. India’s energy future will not just be shaped by the
central grid and large-scale gen
scale generating facilities fuelling industrial growth but also by
the goal of increasing the well being of India’s poor populations by providing
well-being
electricity access to the approximately 400 million citizens without. The Government
of India recognizes that development of local, renewable resources is critical to
resources
ensure that India is able to meet social, economic, and environmental objectives and
has supported the development of renewable energy through several policy actions.
Energy planning in India is taking place in the context of climate c
change
negotiations. India participates in the international climate negotiation process, has
pledged to reduce its economy’s greenhouse gas (GHG) intensity, and has pledged
that its per capita emissions will not exceed those of developed nations. India has
implemented a National Action Plan on Climate Change (NAPCC), which suggested
that 15% of energy could come from renewable sources by 2020. The NAPCC has
eight National Missions, one of which is focused specifically on renewable energy:
The Jawaharlal Nehru National Solar Mission (JNNSM). India is an active participant
ru
of the Clean Development Mechanism (CDM) with the second largest number of
projects registered among all countries participating, the majority of which are
renewable energy projects.
The electricity intensity of the Indian economy the percentage growth of electricity
he economy—the
consumption that correlates with 1% of economic growth fell from approximately
growth—fell
3.14% in the 1950s to 0.97% in the 1990s.11 In 2007, it was at 0.73%. The main
reason for this reduction is that India’s growth until now was based more on the
s
service sector (with an electricity intensity of only 0.11%) than on growth in industrial
production (with an electricity intensity of 1.91%).12 Today, for each 1% of economic
growth, India needs around
0.75% of additional energy.13 The Planning Commission of India, which coordinates
Indian long-term policy, analyzes different scenarios; one scenario assessed that this
term
value could fall to 0.67% between 2021
2021–2022 and 2031–2032.14 India is fac
2032.14 facing a
formidable challenge to build up its energy infrastructure fast enough to keep pace
with economic and social changes. Energy requirements have risen sharply in recent
years, and this trend is likely to continue in the foreseeable future. It is driven by
India’s strong economic and population growth as well as by changing lifestyle
patterns. Growth and modernization essentially follow the energy intensive Western
energy-intensive
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model of the 19th and 20th centuries, in which economic growth correlates with a
comparable growth in the energy use.
e
For GDP annual growth of 8%, the Planning Commission estimates that the
commercial energy supply would have to increase at the very least by three to four
times by 2031–2032 and the electricity generation capacity by five to six times over
2032
2003–2004 levels.15 In 2031 2032, India will require approximately 1,500
2004 2031– 1,500–2,300
million tonnes of oil equivalent (MTOE) to cover its total commercial energy needs.16
The Indian government by itself does not have sufficient financial resou
resources to solve
the problem of energy shortages. It must rely on cooperation with the private sector
to meet future energy requirements. This opens up interesting market opportunities
for international companies.
2.1 Commercial Energy Consumption
India’s share of the global commercial energy19 consumption in 2008 was 3.8%
re
(433 of 11,295 MTOE), increased from 2.9% over the past 10 years, thus making it
the fifth largest consumer of commercial energy. By comparison, China holds 19.6%
of the population and consu
consumes 17.7% of commercial energy.
Figure 3: Worldwide consumption of primary sources of energy by country (2008)
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India’s total consumption of commercial energy increased from 295 MTOE in the
year 2000 to 433 MTOE in 2008 with an average annual growth rate of 4.9% Coal is
by far the most important energy source for India; it provides more than half of the
commercial energy supply. Oil, mostly imported, is the second most important
source of energy, followed by gas and hydropowe (see Figure 1-4). So far, nuclear
hydropower 4).
(atomic) power covers only a small portion of the commercial energy requirement
(approximately 1.5%). With less than 1%, renewable energy plays a minor role (this
does not include hydro > 25 MW), and therefore, it is not even visible in Figure 1
1-3,
though its share is projected to increase significantly. The traditional use of biomass
(e.g., for cooking) has not been included here as a source of energy. However, the
2001 Census points out that approximately 139 million of the total 194 million
households22 in India (72%) are using traditional forms of energy such as firewood,
crop residue, wood chips, and cow dung cakes for cooking.23 The majority of these
households are in rural areas. Firewood, used by approximately 101 million
households, is the main cooking fuel in India.
Figure 4: Percentage share of commercial energy sources in India
2.2 The Power Market in India and the Role of Renewable Energy
While India has been making progress in different infrastructural areas such as the
construction of roads and expansion of the telecommunication system, the power
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infrastructure has not kept pace with the growing requirements. India’s power market
is confronted with major challenges regarding the quantity as well as the quality of
onted
the electricity supply. The base load capacity will probably need to exceed 400 GW
base-load
by 2017. In order to match this requirement, India must more than double its total
installed capacity, which as of March 2010 was 159 GW.25 Moreover, India’s power
acity,
sector must ensure a stable supply of fuels from indigenous and imported energy
sources, provide power to millions of new customers, and provide cheap power for
development purposes, all while reducing emissions. On the quality side, the
while
electricity grid shows high voltage fluctuations and power outages in almost all parts
of the country on many days for several hours.26 According to the “Global
Competitiveness Report,” in 2009
2009–2010 (weighted average), India ranked 110
ed
among 139 countries in the category “Quality of Electricity Supply.”27 The power
deficit reported for 2008–2009 was almost 84 TWh, which is almost 10% of the total
2009
requirement; the peak demand deficit was more than 12.7% at over 15 GW.28 The
over
electricity undersupply in India is estimated to cost the economy as much as INR 34
(USD 0.68) to INR 112 (USD 2.24) for each missing kilowatt hour. Thus, the total
kilowatt-hour.
cost of the power deficit of 85 billion kWh in financial year 2007 2008 amo
2007–2008 amounted to at
least INR 2,890 billion (USD 58 billion), or almost 6% of the GDP.29 Another report
states that there is an approximately 7% decrease in the turnovers of Indian
companies due to power cuts.30 As a consequence, many factories, businesses,
and private customers have set up their own power generation capacities in the form
ivate
of captive power plants or diesel generators in order to ensure their power supply.
This provides an attractive opportunity for renewable energy solutions; they compete
not with power produced relatively cheaply by large coal plants but with much more
expensive diesel back-up
up generators. Until 1991, the Indian government
monopolized the power market. There were only a few private actors, and the CEA
had sole responsibility for giv
giving techno-economic clearance to new plants.
economic
However, the public sector has been unable to cater to the growing demand for
power, and in the future, investment requirements in the public sector will far exceed
the resources. Current energy policies therefore place an emphasis on the
therefore
integration of the private sector along the entire value chain: from the generation of
power to transmission and distribution.
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The Electricity Act 2003 displaced former energy laws and expanded them
comprehensively.31 The aim of the act was the modernization and liberalization of
31
the energy sector through the implementation of a market model with different
buyers and sellers. The main points included making it easier to construct
decentralized power plants, especially in rural areas and for captive use by
especially
communities, and giving power producer’s free access to the distribution grid to
enable wheeling. Producers could also choose to sell power directly to consumers
rather than through the financially weak State Electricity Boards (SEBs). Through the
Electricity
Electricity Act, the different legal frameworks are to be unified at a state level to
promote foreign direct investment in the country. Given the long term energy deficit
long-term
and the growth trajectory of the Indian economy, the Indian investment community
has responded positively. However, international investors are still hesitant. The
largest barrier to more foreign private investment in the energy market is the energy
price itself. In many customer sections and regions, they are too low to generate
are
stable and attractive returns. Despite being an impractical drain on resources, the
government has so far failed to adjust prices. The key reason is that cheap or free
electricity is an important political token in a country where the majority of the
the
population still lives on a very low income.
2.3 Power Consumption
India’s average power consumption per person was 733 kWh in 2009, and the
average annual rate of increase since 2003 was 4.4%, 33 as shown in Figure
Figure 5 :Per capita annual electricity consumption in India
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In 2008, a total of 596,943 GWh were consumed in India. The largest consumer was
industry with 274,531 GWh (46%), followed by households with 124,562 GWh
(21%), and agriculture with 107,835 GWh (18%). In the commercial sector (e.g.,
ture
offices and shops), 48,047 GWh (8%) were consumed, 11,615 GWh (2%) in rail
traffic, and 30,353 GWh (5%) in various other sectors.
Figure 6 : India electricity consumption sector-wise (utilities & non-utilities, 2008
utilities, 2008–2009)
Between 1980 and 2009, energy consumption increased by almost seven times from
85,334 GWh to 596,943 GWh, which corresponds to an average annual growth rate
of approximately 7.1%. The strongest increase was the consumption by private
households, which increased by almost 14 times since 1980 at an average annual
growth rate of 10%. The reason for this increase was the inclusion of several million
new households, corresponding to the increase in electrical household appliances
electrical
such as refrigerators and air conditioners. The agricultural share increased seven
seven-
fold at an annual growth rate of 7.6% between 1980 and 2008. The reason for a
strong growth in the agricultural sector is, first, the inclusion of more rural areas, and
inclusion
second, the provision of power to farmers at reduced, or even frees rates in many
frees,
areas. The consequence of this latter practice was the widespread purchase of
cheap and inefficient water pumps that continue to run almost uninterrupted. The
slowest growth in power consumption was seen in the industrial sector at 5.9% per
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year, which still corresponds to a five fold increase.37 The main drivers for the
five-fold
strong growth in the demand for power are the overall economic growth, the power
power-
intensive manufacturing industry that is growing disproportionately fast, the rapidly
rising consumption in households due to the affordability of new electrical
appliances, the planned provision of power to 96,000 currently un electrified villages,
un-electrified
and the provision of power for latent demand, which is currently unfulfilled because
of frequent power cuts.
2.4 Power Generation Capacity
The total power generation capacity in India in March 2010 was 159 GW. Of this,
64.3% was fossil-fuel-fired power plants (coal, gas, and diesel), 23.1% hydropower,
fired
2.9% nuclear power, and 9.7% renewable energ
energy.
(Renewable energy includes small hydropower plants (< 25 MW), biomass gasification, biomass
Renewable
energy, urban and industrial waste energy, solar energy, and wind energy
energy)
Figure 7 : Installed capacities for power generation in India according to energy source (March 2010)
The composition of the power sector has changed significantly in the last 30 years.
The power generation capacity controlled directly by the central government has
increased from 12% to 32%. At the same time, the fraction of generation capacity
the
controlled by the individual states fell from 83% to 50%. Generation capacity
controlled by the private sector more than tripled from 5% to 18%. The private sector
dominates in power generation from renewable energy sourc
sources.
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(Includes small hydropower plants (< 25 MW), biomass gasification, biomass energy, urban and
Includes
industrial waste energy, solar energy, and wind energy
energy)
Figure 8 : Percentage of public and private sector power generation capacity
The National Electricity Policy (NEP) assumes that the per capita electricity
consumption will increase to 1,000 kWh by 2012. To cover this demand, the
government is planning to add 78,700 MW of capacity during the Eleventh Five
78,700 Five-Year
Plan43 (Eleventh Plan) ending March 2012. As of April 2010, 22,552 MW of new
installation toward that goal had been achieved. There are further projects under
construction with a total capacity of 39,822 MW. A per the mid-term plan review,
As term
capacity additions of 62,374 MW are likely to be achieved with a high degree of
certainty and another 12,000 MW with best efforts.44 Figure 1 shows India’s
1-9
capacity growth from the end of the Eighth Plan in 1997 to project
projections through the
end of the Eleventh Plan.
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Figure 9 : Development of installed electrical capacities of utilities and non utilities in India
non-utilities
Figure shows the technology breakdown of the 78,700 MW targeted in the Eleventh
Plan. The largest share of 59,693 MW is to be provided by thermal power plants.
Additionally, 15,627 MW is to be provided by hydro and 3,380 MW by nuclear power.
The central government undertakings, such as those of the National Thermal Power
Corporation or the National Hydro Power Corporation, will contribute the most.
r
Figure 10 : Forecast growth in capacity by the end of the Eleventh Plan according to sector (2012)
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In March 2009, the gross electricity generation48 by utilities in India was 746.6 TWh.
utilities
In addition, 95.9 TWh was generated by non utilities and another 5.9 TWh were net
non-utilities
imports.
The total generation available was thus 848.4 TWh, which corresponds to a rise of
3.3% as compared to the previous year.49 As these figures show, the trend in
figures
growth rates is inadequate in view of the rapid increase in demand for power.
Figure 11 : Power Generation Growth
Electricity Generation Efficiency Conventional thermal power generation in India
faces three main challenges:
1. The low average conversion efficiency of the plants (30%).
2. The low quality of the coal itself, which has high ash content and a low calorific
value (3,500–4,000 kcal/kg).51
4,000
3. The fixed electricity off-take price, which does not reward efficiency gains.
take
It is estimated that at least 25%
25%–30% of the capacity in power plants in India is old
n
and inefficient and operates at high heat rates and low utilization levels.52 To
overcome these challenges, the Indian government has implemented a
comprehensive program that includes a large scale renovation and modernizatio
large-scale modernization
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(R&M) program for existing power plants, the promotion of supercritical technology
for Ultra Mega Power Projects at pithead locations, the promotion of use of imported
higher quality coal (from South Africa, Australia, and Indonesia) for coastal location
locations,
the set-up of coal washing facilities for domestic coal, and the promotion of an IGCC
up
technology for gas plants. Also, new power plant projects are being awarded via a
competitive bidding process based on the lowest price offer for electricity sold to t
the
grid. Since 1985, nearly 400 units (over 40 GW) have been serviced through the
R&M program. According to The Energy and Resources Institute (TERI), R&M could
improve electricity generation by 30%, reduce emissions by 47%, and increase
energy conversion efficiency by 23%.53 The R&M program currently faces two
challenges to successful completion. First, the rising electricity demand makes it
difficult to take plants off the grid for maintenance work. Second, sometimes the
costs to repair or upgrade old power generation equipment exceed 50% of the costs
power
of an entirely new plant. In such cases, repair is not economically viable. However,
given the rising demand, such plants cannot be taken off the grid either. Although
many newer, privately operated plants are more efficient than state
are state-owned plants,
there is still a technology deficit across the power generation sector, mainly with
respect to the latest supercritical technology. The performance of India’s existing
supercritical power plants has so far failed to meet expectations.54 This presents a
to
great opportunity for international technical cooperation.
3.0 THE STATUS OF RENEWABLE ENERGY IN INDIA
India has over 17 GW of installed renewable power generating capacity. Installed
wind capacity is the largest share at over 12 GW, followed by small hydro at 2.8 GW.
The remainder is dominated by bio energy, with solar contributing only 15 MW. The
Eleventh Plan calls for grid connected renewable energy to exceed 25 GW by 2012.
grid-connected
JNNSM targets total capacity of 20 GW grid-connected solar power by 2022.
connected
Renewable energy technologies are being deployed at industrial facilities to provide
supplemental power from the grid, and over 70% of wind installations are used for
this purpose. Biofuels have not yet reached a significant scale in India. India’s
Ministry of New and Renewable Energy (MNRE) supports the further deployment of
renewable technologies through policy actions, capacity building, and oversight of
their wind and solar research institutes. The Indian Renewable Energy Development
Renewable
Agency (IREDA) provides financial assistance for renewable projects with funding
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from the Indian government and international organizations; they are also
responsible for implementing many of the Indian government’s renewable ener
energy
incentive policies. There are several additional Indian government bodies with
initiatives that extends into renewable energy, and there have been several major
policy actions in the last decade that have increased the viability of increased
deployment of renewable technologies in India, ranging from electricity sector reform
to rural electrification initiatives. Several incentive schemes are available for the
various renewable technologies, and these range from investment
investment-oriented
depreciation benefits to generation oriented preferential tariffs. Many states are now
generation-oriented
establishing Renewable Purchase Obligations (RPOs), which has stimulated
development of a tradable Renewable Energy Certificate (REC) program.
3.1 Renewable Energy Share of Electricity
As of June 2010, India was one of the world leaders in installed renewable energy
capacity, with a total capacity of 17,594 MW (utility and non
non-utility),58 which
represents approximately 10% of India’s total installed electric generating
capacity.59 Of that total, 17,174 MW were grid connected projects, and the
hat grid-connected
remaining 2.4% of installed renewable capacity consisted of off grid systems.60 The
off-grid
wind industry has achieved the greatest success in India with an installed capacity of
12,009 MW at the end of June 2010. India has also installed 2,767 MW of small
June
hydro plants (with sizes of less than 25 MW each), 1,412 MW of grid
grid-connected
cogeneration from bagasse, and 901 MW of biomass based power from agro
biomass-based
residues. Waste-to-energy projects have an installed capacity of 72 MW. India has
energy capacity
off-grid renewable power capacities of 238 MW from biomass cogeneration, 125 MW
grid
from biogas, 53 MW from waste energy, 3 MW from solar PV plants, and 1 MW
waste-to-energy,
from hybrid systems.
With the recently announced JNNSM described in Chapter 4, India hopes to develop
Chapter
more of its solar resource potential. As of June 2010, solar PV plants in India had
reached a cumulative generation capacity of approximately 15.2 MW. This is
approximately 0.07% of JNNSM’s 2022 target of 22 GW.62 As reported by CSP
Today, JNNSM’s goal would “make India the producer of almost three
, three-quarters of
the world's total solar energy output.”63 By the end of the Tenth Plan (2007), India
achieved a cumulative installed capacity of 10.161 GW of renewable energy (see
Table 2-1). Additions totaling 15 GW are targeted during the Eleventh Plan to bring
1).
the total installed grid-connected renewable generating capacity to over 25 GW.
connected
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Wind energy is expected to contribute approximately two thirds of the added
two-thirds
capacity in this plan period. If India is able to achieve its renewable energy goals by
2022 (by the end of the Thirteenth Plan), it will reach a total of 74 GW of installed
capacity for wind, solar energy, biomass, and small hydropower, with wind and solar
expected to account for more than 80% of the installed renewable power.
Table 1: Table Development of Grid-connected Renewable Power in India (in MW)
connected
Achieved In Process Anticipated Targets
Five-year By the End of 10th Plan Anticipated By the End of By the End of
Plan the 9th Plan (additions in the 11th the 11th Plan the 13th Plan
(cumulative during Plan (cumulative (cumulative
installed plan (additions installed installed
capacity) period) during plan capacity) capacity)
period)
Years Through 2002 - 2007 - 2012 Through 2012 Through
2002 2007 2022
Wind 1,667 5,415 10,500 17,582 40,000
Small 1,438 520 1400 3,358 6,500
Hydro
Biomass 368 750 2,100 3,218 7,500
Solar 2 1 1,000 1,003 20,000
Total 3,475 6,686 15,000 25,161 74,000
Although the government provides assistance for renewable energy implementation
in the form of generation-based incentives (GBIs), subsidies, subsidized credits, and
based
reduced import duties, the Indian market does not offer investors a framework that is
as investor-friendly as in some developed countries. The main reason is that
friendly
renewable energy sources are not systematically prioritized over non
non-renewable
sources at a given national budget and a given power demand scenario. While the
market certainly offers great opportunities for investors, it also requires adaptation
and entrepreneurship to develop solutions that specifically fit the Indian scenario.
Off-grid applications for rural electrification and captive power for industries offer a
grid
promising opportunity for renewable energy technologies in India. Both of these
ty
applications can benefit from renewable energy's advantages over conventional
energy sources: local control of the energy resource and power system and
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suitability to smaller-scale applications. Renewable energy's competition is typically
scale
either a costly connection to the national grid or diesel generator based power with
generator-based
its high maintenance and fuel costs. On average, the cost of producing power for a
coal plant is about INR 2 (USD 0.03) per kWh, while electricity from a diesel
kWh,
generator plant is approximately INR 10 (USD 0.20) per kWh To compete effectively
kWh.
with these established technologies, renewable energy technologies require
business models adapted to the characteristics of renewable powe plants that
power
include plans for efficient marketing, distribution, operation and maintenance, and
access to financing. For on grid application of renewable energy, growth depends on
on-grid
grid infrastructure improvements and the continued reduction of renewable energy
costs. Currently, wind, small hydro, and biomass are the most cost
cost-competitive
renewable options. Solar technologies, including concentrated solar power (CSP)
and PV, are the least competitive but offer the greatest opportunity for growth
because of the high potential. It therefore receives the most financial support in
terms of government incentives.
Energy Type Electricity Source
Generation Costsin
INRIkWh (USDIkWh)
Coal 1—2 (0.02—0.04)
1 IIcKinsey - Powering India
Nuclear 2—3 (0.04—0.06)
2 McKinsey - Powering India
Large Hydro 3-4
3 (0.06—0.08) IbicKinsey - Powering India
Gas 4—6 (0.08—0.12)
4 McKinsey - Powering India
Diesel 10+ (0.20+) McKinsey - Powering India
Wind (on-shore) 3—4.5 (006—0.09)
3 Industry experts
Small Hydro 3—4 006—0,08
3 Industry experts
Biomass 4—5 (0.06—0.10)
4 Industry experts
Solar (CSP) 10—15 (0.20—0.30)
10 Industry experts
Solar (PV) 12—20 (0.24—0.40)
12 Industry experts
Table 2 : Table Power Generation Costs in India by Energy Source 2008
3.2 Renewable Energy Application in Industrial Use and Transportation
A large percentage of renewable energy in India is covered under captive generation
for industrial use. This is especially true in the wind market where 70% of electricity
from wind projects is produced for direct consumption by large industrial facilities to
s
mitigate the effect of frequent shortages of electricity from the national grid.
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Telecommunications companies are also looking toward renewable energy as they
search for new solutions to power India’s 250,000 telecom towers. Systems such as
o
solar PV-based hybrid systems provide a less polluting alternative to diesel power,
based
serve as a hedge against increasing diesel fuel prices, and help minimize the
logistical challenges of transporting and storing diesel fuel at remote tower locations.
For the last 2 years, solar cooling has been a buzzword in the industry. While its
attraction in a country as sunny and hot as India is obvious, the technology is still
under development and is not yet economically viable. There are, however, some
yet
demonstration sites such as the Muni Seva Ashram in Gujarat, which uses parabolic
Scheffler-type dishes to supply a 100 ton air-conditioning system.
type 100-
For the last 2 years, solar cooling has been a buzzword in the industry. While its
in
attraction in a country as sunny and hot as India is obvious, the technology is still
under development and is not yet economically viable. There are, however, some
demonstration sites such as the Muni Seva Ashram in Gujarat, whic uses parabolic
which
Scheffler-type dishes to supply a 100 ton air-conditioning system.68 On the
type 100- conditioning
transportation front, there have been initiatives to switch to alternative transportation
fuels such as compressed natural gas and electricity. The Reva, develope by the
developed
Maini Group, is India’s—and one of the world’s first commercially available electric
and world’s—first
car. TATA and General Electric are also in the process of developing electric
vehicles. In addition, highly visible pilot projects are deployed to increase public
interest in renewable energy technologies. The October 2010 Commonwealth
Games in New Delhi are showcasing renewable energy for transportation and other
uses including the utilization of at least 1,000 solar rickshaws, which use PV
PV-
powered motors for transporting athletes at the games.69 Also, a 1 MW PV plant will
sporting
provide electricity for one of the stadiums at the games.70 Liquid bio fuels, namely
ethanol and biodiesel, are considered substitutes for petroleum-
petroleum derived
transportation fuels. In India, ethanol is produced by the fermentation of molasses, a
ethanol
by-product of the sugar industry, but more advanced conversion technologies are
product
under development, which will allow it to be made from more abundant
lignocelluloses biomass resources such as forest and agricultural residues. Biodiesel
agricultural
production is currently very small, using non edible oilseeds, waste oil, animal fat,
non-edible
and used cooking oil as feedstock. However, given the fact that India consumes
more diesel than gasoline in the transportation sector, it is expected that the
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production of biodiesel and other biomass derived diesel substitutes will grow over
biomass-derived
the next decade.
3.3 Grid Connection and Status Overview
In March 2009, the Indian power network had a total length of 7.49 million circuit
kilometres (ckm).91 In comparison to the power generation sector, investments into
the transmission and distribution networks have been lower in recent years.
Nevertheless, the transmission network has improved considerably. The distribution
network, however, remains in a poor state. In the ongoing Eleventh Plan, the high
er, high-
voltage network is to be extended by around 95,000 ckm to a capacity of more than
178,000 mega volt amperes (MVA). In the low voltage area, an additional 3,253,773
low-voltage
ckm and a capacity of 214,000 MVA are to be added. Another extremely important
4,000
task is the “Power for All by 2012” mission,92 declared by the Government of India
India—
the ambitious goal of providing power to all Indian villages by 2012, to a large extent
through grid access.
3.4 Tradable Renewable Energy Credits
ble
Naturally, the availability of renewable energy sources differs across India. In some
states, such as Delhi, the potential for harnessing renewable energy compared to the
demand for energy is very small. In other states, such as Tamil Nadu for wind,
Rajasthan for solar, or Himachal Pradesh for hydro, it is very high. This offers
opportunities for inter-state trading in the form of RECs. Such trade allows for more
state
economically efficient development of renewable energy throughout the country as
distribution licensees in states with limited resources can purchase RECs associated
with renewable generation in other states where it is less expensive to develop
renewable energy projects. In this way, each state’s RPO can be met in the most
economically efficient manner. In January 2010, CERC announced the terms and
conditions for a tradable REC program as follows:
• “There will be a central agency, to be designated by CERC, for registering RE
generators participating in the scheme.
• The renewable energy generators will have two options either sell the renewable
energy at a preferential tariff fixed by the concerned Electricity Regulatory
Commission, or sell the electricity generation and environmental attributes
associated with RE generation separately.
eration
• On choosing the second option, the environmental attributes can be exchanged in
the form of REC. Price of the electricity component would be equivalent to the
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