Uptake of Renewables in Indian Market

Sandip Das,
Head of Renewables, PXIL, India
Power Exchange India Limited
5
th
November 2012
Renewable Energy in India - Development
The role of New and Renewable Energy has assumed significance in recent
times with the growing concern for Indias Energy security
Development of focused approach:
Commission for Additional Sources of Energy (CASE) in 1981
Department of Non-Conventional Energy Sources (DNES) under Ministry of
Energy in 1982
Ministry of Non-Conventional Energy Sources (MNES) in 1992
MNES renamed as Ministry of New and Renewable Energy (MNRE) in 2006
Commission for
Additional
Sources of
Energy (CASE)
1981
Department of
Non-conventional
Energy Sources
(DNES)
1982
Ministry of Non-
Conventional Energy
sources (MNES)
1992
Ministry of New
and Renewable
Energy (MNRE)
2006
Development of focused approach
NAPCC and National Tariff Policy
NAPCC
National Action Plan on Climate Change (NAPCC) released by Prime Minister of India
on June 2008 with an aim to continue India on a high growth path along with taking
responsibility on climate change
Aims to achieve target through 8 missions
National Solar Mission
National Mission for Enhanced Energy Efficiency
Six National Missions on Water, Sustainable Habitats, the Himalayan
Ecosystem, Sustainable Agriculture, Green India and Strategic Knowledge on Climate
Change
National Bio-Energy Mission to be added in 12
th
5-year plan (FY 12-13 to 16-17)
Recommended increasing the share of Renewable energy to 10% by 2015 and 15% by
2020
National Tariff Policy
The Amendment to National Tariff Policy-2006 issued in Jan-2011 has specified
Purchase fromSolar energy at 0.25% by FY 2012-13 and to reach 3% by FY 2021-22
Renewable Energy in India Promotion of Investments
Renewable Energy sector (mainly Wind) took off in mid 90s after
Government of India(GoI) started the Accelerated Depreciation Scheme as
a Tax incentive
Preferential Tariff determined by State Electricity Regulatory Commission
(SERCs) was the only way to sell Electricity
With focus on capacity addition rather than generation, Renewable energy
generation below International standards
In December 2009, Ministry of New and Renewable Energy(MNRE) initiated
Generation Based Incentive(GBI) scheme
Indian Renewable Development Agency (IREDA),the Financial Institution for
Renewable projects also is the central agency for implementing the GBI
scheme
Migrating towards a Renewable Purchase Obligation (RPO) regime where
Obligated entities will meet their targets through REC market and
Preferential Tariff
RE Technology
12th Plan(2012-17) capacity
addition targets (MW)
Wind Power
19255
Solar Power
9410
Small Hydro Power 2799
Biomass Power 4250
Total 35714
Nuclear , 5
GW, 2%
Hydro , 39
GW, 19%
Renewable
Energy , 25
GW, 12%
Coal , 118
GW, 57%
Gas , 19
GW, 9%
Diesel , 1
GW, 1%
Total Installed Capacity as on Sep 2012
Wind , 17967
MW,
69.5%
Small Hydro,
3434 MW,
13.3%
Biomass,
1210 MW,
4.7%
Bagase , 2110
MW,
8.2%
Solar,
1044 MW,
4.0%
Municipal
Waste, 94
MW,
0.4%
Renewable Installed Capacity as on Sep 2012
Power Sector Capacity Distribution in India
Renewable Energy Potential (GW)
Source: Central Electricity Authority (CEA) website
Jawaharlal Nehru National Solar Mission(JNNSM)
National level bidding to set up Solar Power plants at a single location to achieve economies of scale
JNNSM Phase-I target of 1000 MW grid connected Solar Power plants to be completed by 2013
131 projects of 802 MW in Batch-I and 28 projects of 350 MW in Batch-II
Financial closure achieved by 35 projects of 610 MW in Phase -I Batch-I
Grid Connected Solar capacity increased from 10 MW in FY 09-10 to 1044 MW in FY 11-12
Record low tariffs of 15 cents/unit in JNNSM Phase-I Batch -II
Grid Parity likely to be achieved much before FY 16-17
Charanka Solar Park in Gujarat- Largest Solar Park in Asia with current capacity of 214 MW with total
planned capacity of 500 MW
Particular Phase I (2010 - 13) Phase II (2013 - 17) Phase III (2017 - 22)
Utility Grid power, including Roof
top
1100 MW 4000 - 10000 MW 20000 MW
Off Grid Solar Applications 200 MW 1000 MW 2000 MW
Aggregation of Demand to provide economies of scale
Renewable Energy Certificates (REC) - Introduction
REC - A Market based instrument
Distribution of RE resources not uniform
across the country
In past, Feed in Tariffs (FiTs) set by various
SERCs was the only option
Renewable rich states reached their
saturation level and had no obligation to
purchase costly Renewable energy
beyond their Renewable Purchase
Obligation (RPO) target
Problem overcome by creating a National
REC Market where each state has to
meet its RPO either through FiTs route or
the REC route
A vibrant and liquid National Market
for participants to carry out RE
transactions
RPO Target of various States for
2012
REC Mechanism Conceptual Framework
RE Generation
Sale at Preferential
Tariff
Distribution
licensees
Sale under REC
Framework
Electricity
Component
Distribution
licensee at a Price
not more than
Average Power
Purchase Cost
Third Party sale at
mutually agreed
Price
Sale through Power
Exchange
Renewable
Component
Obligated Entities
(Sale through
Power Exchange)
REC Market
1 REC = 1 MWh
Floor & Forbearance Price declared till FY 16-17
Rapid Growth in RECs issued from avg. of 87000 in
FY 12 to avg. of 0.34 Million in H-1 of FY 2012-13
Market envisages to trade 0.5 Million REC / Month
by end of FY 2012-13
.00 .00
.03
.03
.03
.03
.07
.13
.14
.09
.10
.20
.20
.12
.23
.26
.38
.47
.53
0
0.1
0.2
0.3
0.4
0.5
Monthly REC Issued (in millions)
.00
.02
.02
.02
.00
.07
.10
.11
.11
.17
.21
.20
.07
.17
.24
.16
.27
.27
0
0.05
0.1
0.15
0.2
0.25
0.3
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Monthly RECs traded (in millions)
Particular
Floor Price
(in INR/REC)
Forbearance
Price
(in INR/REC)
Non-Solar 1500 3300
Solar 9300 13400
Issues
Need for single window clearances to fast track commissioning
of RE based Power projects
Setting up of evacuation facilities for full utilization of RE Power
Strengthening of enforcement and monitoring mechanism for
meeting of RPO obligations of various states
Emerging demand from generators to extend the tenure of REC
scheme to be co terminous with loan tenures
Better forecasting technologies for RE power - Will help in
scheduling of RE power
Path Ahead
Wind largest contributor (70%) to RE
portfolio of India
Estimated Potential of 100 GW in wind at
80m Hub Height
Focus on utilisation of Capacity by improving
PLF of Wind
Biomass contributes around 5 % of total RE
portfolio of India - Strategic importance in
Urban areas for managing Municipal Waste
Focus on building of Green Energy
Corridors with a cost of $8 Billion to
evacuate Renewable energy from states of
Tamil Nadu, Karnataka, Andhra
Pradesh, Gujarat, Maharashtra, Rajasthan
and Himachal Pradesh
Establishment of Renewable Energy
Management Centers(REMC) to co-ordinate
with the System Operators
THANK YOU
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