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MARKETING MANAGEMENT

PROJECT

ASSESSMENT OF MARKET POTENTIAL FOR WIND


ENERGY IN INDIA

BY
BHAVIK MODY (M-09-06)
MANISH DHELIA (M-09-15)
PRAVEEN KUMAR RAI (M-09-23)
RADHIKA REWARI (M-09-24)

RAJIV GANDHI INSTITUTE OF PETROLEUM


TECHNOLOGY, RAE BARELI

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ABSTRACT

Energy security and sustainable development are high in the global agenda due to the
impact of volatile energy prices, high demand for energy security, and concerns over
environmental sustainability and the global climate change. New and renewable energy
technologies are considered to be one of the viable options to meet the challenge of
achieving sustainable development while conserving natural resources that have been
depleted due to the rapid growth in population, urbanization, and fossil fuel consumption.
Wind energy not only offers both a power source that completely avoids the emission of
carbon dioxide, the main GHG, but also produces none of the other pollutants associated
with either fossil fuel or nuclear generation.
The Indian renewable energy sector has shown impressive growth in the past few years
and investments into the sector have increased significantly. Looking into the past years
records and also the policies and actions of Government of India to encourage the
implementation of renewable energy resources for power generation, the future of Indian
energy sector seems bright.
In this report here we are concentrating on the current energy scenario of India with
respect to wind energy. We shall be studying the current status of wind energy generation
in India and also look into the future forecasts. Moreover, we shall be analyzing the
current market conditions in India for any new player who wishes to enter the wind
energy sector in India.
For this purpose we shall be getting and insight in the technical, financial, environmental
and political conditions of wind energy and also identifying the potential threats and
opportunities in Indian wind energy market. We shall be referring the policies and
regulations of Government of India and thereby identifying a possible market entry
strategy.

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INDEX

1. Introduction
1.1. Wind Energy
1.2. Wind Formation and Distribution
1.3. Wind Farms and Wind Turbines
1.4. Wind farm and Turbine Placement
1.5. Micro-generation
1.6. Advantages of Wind Energy
1.7. Disadvantages of Wind Energy
2. Global Wind Energy Scenario
2.1. Forecast for Global Wind Energy Scenario
3. Wind Energy Prospects in India
3.1. Political Factors
3.2. Economic Factors
3.3. Social Factors
3.4. Technological Factors
3.5. State Policies
3.6. Other Factors
4. Market Player Analysis
4.1. Suzlon Energy Limited
4.2. Vestas Wind Technology India Private Limited
4.3. Enercon India Limited
5. Conclusion

I.Figure 1
II.Figure 2
III.Exhibit A
IV. Exhibit B
V. Exhibit C
VI. Bibliography

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INTRODUCTION
This project of assessing the wind energy potential in India is being executed with a
reference view of a new firm targeting the market of wind energy in India. Therefore all
the analysis and assessment done will be targeted to answer two basic questions:
1. Is it feasible and wise to enter the wind energy market in India?
2. If yes, then which state of India or which location will the firm like to target as
their entry point?

Before beginning our assessment of wind energy potential in India, it will be helpful to
have a brief idea about wind energy and its generation. This section provides an overview
to the generation of wind energy and its advantages and disadvantages.

WIND ENERGY
History suggests that use of wind energy is a very ancient and popular application.
Humans have been using wind power for at least 5,500 years now with initial use being
sails to propel the ships. Architects in olden times designed wind driven ventilation
buildings. Windmills have been used for irrigation pumping and for milling grain since
7th century AD. Wind power came into picture in late 19 th century and small capacity
turbines (20-30 kW) were constructed for providing power to isolated farms. Now they
have evolved into huge megawatt turbines.

Wind power is the conversion of wind energy into a useful form of energy, such as
electricity, using wind turbines. Large scale wind farms are connected to electric power
transmission network, and the power generated is sold to commercial power suppliers
and distributors. There is also another commercial application of wind mills that is very
popular. It is the installation and use of wind mills by industries to satisfy their power
demands. Wind energy is more attractive than the fossil fuel power generation because it
is plentiful, renewable, widely distributed, clean and produces no greenhouse gases.
Wind power is non-dispatchable, meaning that for economic operation, all output must be
taken when it is available. The variability in wind flow and directions also cause
problems for continuous power generation.

WIND FORMATION AND DISTRIBUTION


The driving force behind all the technologies we discussed above is the natural gift of
wind. It is the wind speed and direction that helps in blade rotation. Also the
intermittence of wind also defines the continuity in power generation.
The main reason behind the wind flow is sun. The earth is unevenly heated by the sun,
such that the poles receive fewer sunrays directly as compared to the equator. Land heats
up quicker than seawater and this differential heating result in creation of wind currents.
The wind currents reach up to 160 kmph at high altitudes. The rotation of the earth
changes the direction of the flow of air. These currents are harnessed for power
generation using wind turbines. The estimated wind power that is potentially viable for
generation is about 72 TW, which is much higher than the total global consumption of 15
TW in the year 2005.

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But the inconsistency in wind flow and variable current speed inhibits the fact of
obtaining maximum power generation. Although technologies have been developed to
obtain the maximum output from the available wind source.

WIND FARMS AND WIND TURBINES


In a wind farm, individual turbines are interconnected with a medium voltage (usually
34.5 kV) power collection system and communications network. At a substation, this
medium-voltage electrical current is increased in voltage with a transformer for
connection to the high voltage electric power transmission system.

The surplus power produced by domestic microgenerators can, in some jurisdictions, be


fed back into the network and sold back to the utility company, producing a retail credit
for the consumer to offset their energy costs. The basic process of wind power generation
is as follows (Refer Figure 1 for understanding):

The wind turns the blades of a windmill-like machine. The rotating blades turn the
shaft to which they are attached. The turning shaft typically can either power a
pump or turn a generator, which produces electricity.

Most wind machines have blades attached to a horizontal shaft. This shaft
transmits power through a series of gears, which provide power to a water pump
or electric generator. These are called horizontal axis wind turbines.

There are also vertical axis machines, such as the Darrieus wind machine, which
has two, three, or four long curved blades on a vertical shaft and resembles a giant
eggbeater in shape.

The amount of energy produced by a wind machine depends upon the wind speed
and the size of the blades in the machine. In general, when the wind speed
doubles, the power produced increases eight times. Larger blades capture more
wind. As the diameter of the circle formed by the blades doubles, the power
increases four times.

Main components of a wind electric generator are:


1. Tower
2. Nacelle
3. Rotor
4. Gearbox
5. Generator
6. Braking System
7. Yaw System
8. Controllers
9. Sensors

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Induction generators are used in wind power projects and they include substantial
capacitor banks for power factor correction. Doubly-fed machines - wind turbines with
solid state converters between the turbine generator and collector system - are generally
more desirable for grid interconnection because of inconsistent power generation across
different turbines. Since wind speed is not constant, a wind farm's annual energy
production is never as much as the sum of the generator nameplate ratings multiplied by
the total hours in a year. The ratio of actual productivity in a year to this theoretical
maximum is called the capacity factor. Typical capacity factors are 20–40%, with values
at the upper end of the range in particularly favourable sites. Wind energy "penetration"
refers to the fraction of energy produced by wind compared with the total available
generation capacity. There is no generally accepted "maximum" level of wind
penetration. The limit for a particular grid will depend on the existing generating plants,
pricing mechanisms, capacity for storage or demand management, and other factors. An
interconnected electricity grid will already include reserve generating and transmission
capacity to allow for equipment failures; this reserve capacity can also serve to regulate
for the varying power generation by wind plants.

WIND FARM AND TURBINE PLACEMENT


Placement of turbine and location of the wind farm play a pivotal role in power
generation. Good selection of a wind turbine site is critical to economic development of
wind power. Aside from the availability of wind itself, other factors include the
availability of transmission lines, value of energy to be produced, cost of land acquisition,
land use considerations, and environmental impact of construction and operations. Off-
shore locations may offset their higher construction cost with higher annual load factors,
thereby reducing cost of energy produced. Wind farm designers use specialized wind
energy software applications to evaluate the impact of these issues on a given wind farm
design.
An area where a number of wind electric generators are installed is known as a wind
farm. The essential requirements for establishment of a wind farm for optimal
exploitation of the wind are
1. High wind resource at particular site
2. Adequate land availability
3. Suitable terrain and good soil condition
4. Proper approach to site
5. Suitable power grid nearby
6. Techno-economic selection of WEGs
7. Scientifically prepared layout

MICRO-GENERATION
Small-scale wind power is the name given to wind generation systems with the capacity
to produce up to 50 kW of electrical power. Isolated communities, that may otherwise
rely on diesel generators may use wind turbines to displace diesel fuel consumption.
Individuals may purchase these systems to reduce or eliminate their dependence on grid
electricity for economic or other reasons, or to reduce their carbon footprint. Wind
turbines have been used for household electricity generation in conjunction with battery
storage over many decades in remote areas.

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ADVANTAGES OF WIND ENERGY
The main advantages of power generation from wind energy are
1. The capital cost is comparable with conventional power plants. For a wind farm, the
capital cost ranges between 4.5 crores to 6.85 crores per MW, depending up on the type
of turbine, technology, size and location.
2. Construction time is less.
3. Fuel cost is zero.
4. O & M cost is very low.
5. Capacity addition can be in modular form.
6. There is no adverse effect on global environment. The whole system is pollution free
and environment friendly.

The pollution saving from a WEG having an average output of 4,00,0.00 kWh per
year has been estimated as:
Sulphur - dioxide (SO2): 2 to 3.2 tonnes
Nitrogen - oxide (NO); 1.2 to 2.4 tonnes
Carbon - dioxide (CO2): 300 to 500 tonnes
Particulates: 150 to 280 kg.

Comparison between Fossil Fuels and Wind


Availability Usable as it exists Have to be procured and
made usable through
laborious and
environmentally damaging
processes
Limitation on Inexhaustible resource Limited in reserves,
availability expected to get completely
exhausted in the coming 60
years
Transportation Used where it is available Have to be transported
from the site for further
processing exposing
environment to danger
Use in production Zero emission Used in producing
electricity releasing green
house gasses
Geo-political Reduces our reliance on oil, Over-reliance on oil as a
Implications safeguarding national security resource has undermined
our energy security. E.g.
OPEC crises of 1973, Gulf
War of 1991 and Iraq War
of 2003
There is no adverse effect
on global environment.

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The whole system is
pollution free and
environment friendly.

DISADVANTAGES OF WIND POWER


1. Wind machines must be located where strong, dependable winds are available most of
the time.
2. Because winds do not blow strongly enough to produce power all the time, energy
from wind machines is considered "intermittent," that is, it comes and goes. Therefore,
electricity from wind machines must have a back-up supply from another source.
3. As wind power is "intermittent," utility companies can use it for only part of their total
energy needs.
4. Wind towers and turbine blades are subject to damage from high winds and lighting.
Rotating parts, which are located high off the ground can be difficult and expensive to
repair.
5. Electricity produced by wind power sometimes fluctuates in voltage and power factor,
which can cause difficulties in linking its power to a utility system.
6. The noise made by rotating wind machine blades can be annoying to nearby neighbors.
7. People have complained about aesthetics of and avian mortality from wind machines.

GLOBAL WIND ENERGY SCENARIO

After getting an insight of the technical aspects of wind energy generation, it is time to
review the current wind energy scenario of the world. The global scenario will provide a
base to assess the Indian potential. The following points summarize the current global
scenario pertaining to wind energy. Exhibit A provides an overview to all the details
given below.
Total nameplate capacity of wind turbines operating around the world is of
121,188 MWp out of which 55% is generated in Europe.
The share of top 5 nations in terms of new installations was 73% in 2008. The top
5 major wind energy producers are United States, Germany, Spain, China and

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India.
WEG Installation Details World - Country Wise (in MW)
source : http://w w w .w indpow er-m onthly.com /WPM:WINDICATOR:410681362

140000

120000

100000
2006
80000
2007

60000 2008
2009
40000

20000

0
Germany Spain India China US WORLD

The wind power contribution to the total power generation of the world increased
to 1.5% (260TWh) in 2008.
The USA and China contributed a lot in wind energy installations in the year
2008. United States taking over the global number one position from Germany
and China getting ahead of India for the first time, taking the lead in Asia.

FORECAST FOR GLOBAL WIND ENERGY SCENARIO

World Wind Energy Association has predicted the installation capacity to reach
160 GW by 2010.
The current annual production capacity of domestic wind turbines is about 2500
MW, which is expected to grow by 10 000 MW until 2010.
10% to 20% market growth rebound is anticipated from 2010−2012 as longer-
term investments and market reforms progress.
Investments in wind energy sector are supposed to rise to $277 billion.
In 2012, Europe will continue to host the largest wind energy capacity, with the
total reaching 102 GW, followed by Asia with 66 GW and North America with
61.3 GW.
Asia is predicted to overtake Europe as the biggest annual market, with as much
as 12.5 GW of new wind generating capacity installed during the year 2012.
North America will see an addition of 42.6 GW in the next five years, reaching
61.3 GW of total capacity in 2012.

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Asia is predicted to overtake Europe as the biggest annual market, with as much
as 12.5 GW of new wind generating capacity installed during the year 2012.
China is predicted to be the biggest global market.

INDIAN POWER SECTOR


India’s rapidly growing economy and population leads to relentlessly increasing
electricity demand. As a result, the country’s installed power generation capacity has
increased from just 1.4 GW in 1947 to over 150 GW in 2009.The current generation mix
in India is dominated by coal (78.5 GW), large hydropower (36.9 GW) and gas (16.4
GW). Renewable sources rank fourth with an installed capacity of around 13.2 GW.

Despite the massive capacity additions, the Indian government is struggling to keep up
with growing demand. The IEApredicts that by 2020, 327 GW of power generation
capacity will be needed, which would imply an addition of 16 GW per year. This urgent
need is reflected in the target the Indian government has set in its 11th Five Year Plan
(2007-2012), which envisages an addition of 78.7 GW in this period, 50.5 GW of which
is coal1).

RENEWABLE ENERGY IN INDIA


In the early 1980s, the Indian government established the Ministry of Non-Conventional
Energy Sources (MNES) to encourage diversification of the country’s energy supply, and
satisfy the increasing energy demand of a rapidly growing economy. In 2006, this
ministry was renamed the Ministry of New and Renewable Energy (MNRE).

Renewable energy is growing rapidly in India. With an installed capacity of 13.2 GW,
renewable energy sources (excluding large hydro) currently account for 9% of India’s
overall power generation capacity. By 2012, the Indian government is planning to add an
extra 14 GW of renewable sources.

In its 10th Five Year Plan, the Indian government had set itself a target of adding 3.5 GW
of renewable energy sources to the generation mix. In reality, however, nearly double that

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figure was achieved. In this period, more than 5.4 GW of wind energy was added to the
generation mix, as well as 1.3 GW from other REsources. The target set for the period
from 2008-2012 was increased to 14 GW, 10.5 GW of which to be new wind generation
capacity.

The Indian Ministry of New and Renewable Energy (MNRE) estimates that there is a
potential of around 90,000 MW for power generation from different renewable energy
sources in the country, including 48,561 MW of wind power, 14,294 MW of small hydro
power and 26,367 MW of biomass. In addition, the potential for solar energy is estimated
for most parts of the country at around 20 MW per square kilometer of open, shadow free
area covered with solar collectors, which would add up to a minimum of 657 GW of
installed capacity.

RenewableEnergy capacity additions during 10th/11th FiveYearPlan

Technology Target 2003 – 2007(MW) Actual 2003 – 2007(MW) Target 2008 – 2012

Windpower 2,200 5,426 10,500

Small Hydro (< 25 MW) 550 537 1,400

Biomass Power / 725 759 1,700


Cogeneration

Biomass Gasifier 37 26 –

Solar PV 2 1 –

Waste to Energy 70 47 400


Programme

TOTAL 3,584 6,795 14,000

Source: MNRE

WIND ENERGY PROSPECTS IN INDIA

India is the fifth largest wind power generating nation in the world even when its
installed capacity is far below the existing potential capacity. The Indian renewable
energy sector has shown impressive growth in the past few years and investments into the
sector have increased significantly. After an overview of global conditions and technical
aspects of wind energy and wind farming, it is time to assess the wind energy market
potential in India. We shall carefully assess all factors that can affect the market in India.

POLITICAL FACTORS

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The Indian government by 2012 expects renewable energy to contribute 10% of the total
power generation capacity and have 4%–5% share in the electricity mix. The Integrated
Energy Policy Report of the Planning Commission of India has observed that the
contribution of modern renewable sources to India’s energy mix by 2031–2032,
excluding large hydro, would be around 5%–6%. It may be noted that wind power
contributes 70% of the grid-interactive renewable power installed in the country.

There are a number of measures that help drive wind energy development, including
fiscal incentives such as income tax exemption for 10 yr, 80% accelerated depreciation,
sales tax exemption, and excise duty exemption.

The government had formed a set of guidelines which were revised depending on the
feedback received and from the experience. The new guidelines are address to all the
state electricity board (SEBs) and State Nodal Agencies (SNAs) and also financial
institutions like IREDA, who carry out appraisal of wind power projects in accordance to
the guidelines.

The No Objection Certificate (NOC) provided by the SNA or SEB is the first and
foremost requirement for an organization to own before it undertakes a wind farming
project. A technical committee is appointed by the government to appraise and monitor
the project and give time bound temporary clearances.

The criteria for providing NOC to any project are as follows:

Detailed project report / application providing the data related to capital cost, cost
of generation, energy generation, O&M, selection of equipment etc. For more
than 1 MW project details about mircogeneration is also to be provided.
Site clearance is needed depending on the viability of wind flow and potential
generation capacity that is to be estimated.
Equipment and machinery used should be properly tested and certified as per the
standards incorporating those equipments.
Proper analysis and estimation of generation cost and capital cost that will be
incurred for the project.
It is to be verified that adequate stock of spare parts are present for operations and
maintenance of all machinery and equipment for at least 2 years.
It should be ensured that the project generates power in accordance with the duly
laid down grid parameters. A penalty is levied by SNAs on the firm if the project
fails to reach the 0.85 power factor at the metering point of wind farm.
A submission of monthly status report to the regulating bodies.

ECONOMIC FACTORS

Here we shall concentrate on the cost of wind power generation and pricing of the power.
Today, India is facing severe shortage of electricity and it is projected that by 2012, India

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will have to add approx. another 150,000 MW to its current installed capacity, which is
approx. an average increase of 10,000 MW annually. The country is thus likely to fall
way behind the required capacity additions. The gap thus created is the lucrative area that
can be exploited for wind energy production.

The cost incurred in installation of one wind mill is estimated to be Rs. 1 crore. A bank
provides about 70% of cost as loan. The 30% can be self managed by putting one’s own
equity or by partnering with more than one investors. The advantage of this project is
80% of cost is given as accelerated depreciation and thereby provides tax benefit for
renewable energy during the first year. In India, turbine prices have always been lower
than the global average, thanks to lower labour and production costs. For the purpose of
these scenarios, the current costs of 53.5 mil Rs/MW (771,000 €/MW) were taken as a
starting point, and these are projected to decrease to 50.0 mil Rs/MW by 2010 and then
stabilize at that level.

Through central- and state-level policy intervention wind energy is produced at any
identified windy site in the state. The energy produced is supplied to the State Electricity
Board's grid, can be either sold to electricity boards or utilized against captive
consumption and third-party sale on payment of wheeling charges.

So, on an initial estimation, an individual investing in a wind turbine will garner about Rs
13 lakh by selling energy to the state electricity board in the first year. Wind turbine takes
five-six years to break-even, while its lifespan is about 20 years.

The annual operation and maintenance cost, including insurance, works out to Rs 40,000-
50,000. Wind turbine makers provide one-year warranty on the installation.

The good news for those interested in investing in wind energy is that wind turbine
manufacturers do provide assistance from ideas to installation. Wind turbine makers also
take care of spotting a suitable location to install and maintain wind turbines.

There is a double bonanza in case of energy trading for wind energy producers. With the
government policies and regulations the producer gains substantial amount of revenue
from the sales of wind energy. Along with that usage of green technology and pollution
free methods makes the producer eligible for earning Carbon Credits under the CDM
project. These credits can be used for industry expansion or can be sold in market for
money.

SOCIAL FACTORS

The wind energy sector mainly supports society by contributing towards the
environmental cause. As discussed earlier in the advantages of wind energy we have a lot
many benefits that can be reaped from any wind farm installation. There are no other
social factors that may affect the wind energy generation projects in India.

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TECHNOLOGICAL FACTORS

The technical aspects related to wind farms; wind mills and energy production have
already been covered in the preceding sections. Here we shall analyze the affects of these
on wind energy market.

Individual wind turbines have been steadily growing in terms of their nameplate capacity
– the maximum electricity output they achieve when operating at full power. The average
capacity of wind turbines installed in India in 2008 was 1MW, up from just 400 kW in
2000. Globally, the largest turbines now available for commercial use are up to 6 MW in
capacity. Each turbine has an operational lifetime of 20 years, after which it will need to
be replaced. The technological advancements in increasing the nameplate capacity of
turbines helps in increase in production. Bigger turbines would replace the obsolete or out
of order smaller turbines and therefore more production can be achieved with same
number of installations.

Capacity factors are also affected by the efficiency of the turbine and its suitability for the
particular location. From an estimated average capacity factor in India today of 20.5%,
the scenario assumes that improvements in both wind turbine technology and the
installation location of wind farms will result in a steady increase. The scenario projects
that the average capacity factor in India will increase to 23% by 2011, 25% by 2021 and
then 27.5% from 2026.

These technological advancements and researches also provide a clear insight into the
market of wind energy in India, showing a great scope of development and advancements
which are beneficial for all the stakeholders.

STATE POLICIES

Now we shall look at the policies that the states have applied in order to facilitate wind
energy generation projects within the states. These states are Kerala, Rajasthan, Tamil
Nadu, Karnataka, Andhra Pradesh, Maharashtra, Madhya Pradesh, West Bengal, Gujarat,
and Haryana.

Financial and fiscal incentives introduced/declared by the state governments for private sector wind
power projects

Third Penalty on
Captive Buy-back rate Party Other kVArh
States/items use Wheeling Banking by SEB sale incentives consumption

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Rs 3.50/kW h
without any
escalation
for 10 yr as per
A.P. Govt.
Policy
amendment Rs
date 0.10/kVArh
09.09.2008 up to 10%
subject to and Rs
Andhra At par with approval of Industry 0.25/kVArh
Pradesh Allowed conventional ----- APERC Allowed Status above 10%

4% of Electricity
energy duty Rs
5% of exempted, 0.10/kVArh
energy + Rs 3.50/kW h demand cut up to 10%
Rs. 1.15 / without any 30% of wind and Rs
kWh of not escalation for farm installed 0.20/kVArh
Gujarat Allowed energy allowed 20 yr Allowed capacity above 10%
Rs 3.40/kW h
without any
allowed escalation for
at 2% of 10 yr of
for 3rd party energy commercial No electricity Rs.
Karnataka Allowed sale output operation Allowed duty for 5 yr 0.40/kVArh
Rs 3.14/kW h
To be without any
decided by escalation for
Kerala Allowed SERC ---- 20 yr Allowed ------- -------
Year wise rates
Rs/kW h from
1st–20th year:
1st year—4.03,
2nd
2% of year—3.86, 3rd
energy + yr–3.69, 4th
transmission year—3.52,
Madhya charges as not 5th–20th No electricity Rs
Pradesh Allowed per ERC allowed year—3.36 Allowed duty for 5 yr 0.27/kVArh

Power
evacuation
arrangement,
Rs 3.50/kW h approach
first year of road,
commissioning. electricity
2% energy escalation of duty,
as wheeling 15 loan to
+ 5% as 12 paise per year cooperative Rs
Maharashtra Allowed T&D cost months for 13 yr Allowed societies 0.25/kVArh

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For Jaisalmer,
Jodhpur, and
Barmer
district Rs 3.60
per unit for
injection in 33
or 11 kV
system
and Rs 3.71
per unit for
injection
in EHV system.
For other
Below 132 district
kV, 50% of Rs 3.78 per
normal unit for
charges injection on
applicable to 33 or 11 kV Rs 0.05/yr
33 kV system and Rs Exemption w.e.f.
declared by 3.89 from 01/04/2006
commission per unit for electricity with
+ surcharge 6 injection in duty at 50% escalation of
Rajasthan Allowed + losses months EHV system Allowed for 7 yr 5%/yr

Rs
Rs 2.90/kW h 0.25/kVArh if
Note: TNERC the ratio
has of kVArh
proposed, Rs drawn to kWh
3.40 in its exported is
discussion up to 10%
paper. and Rs
However, final 0.50/kVArh
5% of 5% per order is yet for more than
Tamil Nadu Allowed energy annum to be issued. Allowed --------- 10%.
7% of
energy +
open access
West Bengal Allowed charges ------- Rs 4/kW h Allowed --------- ---------

Moreover, the Maharasthra government has been providing some extra incentives in
order to promote the wind farming and wind energy production within the state. These
are:
For evacuation arrangement of wind energy project, 50% amount will be given as
a subsidy through Green’s energy fund and 50% amount will be given as a loan
without interest to private developers. The loan will be repaid by
MSEB/transmission licensees after commissioning and transferring the ownership
of evacuation arrangement to MSEB/transmission licensees in 5 equal yearly
installments.
100% expenditure for construction of approach roads will be made through Green
energy fund.
No electricity duty for 5 yr for captive use.

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11% share capital will be provided to cooperative sector for setting up of wind
power projects as a grant through Green energy fund.

OTHER FACTORS

There are some other factors that are to be for assessment of market potential. It is
important to study the viable locations for wind farm setup in India. As known there are 4
types of wind farm setups: Offshore, Onshore, Near-Shore and Aerial.
India has a large potential for Offshore, onshore and near-shore wind farms (Figure 2 can
be used for reference). The macro-scale atmospheric flow of wind in tropical India is
determined strongly by the strength of the monsoon winds i.e. the South-West monsoon
winds and the North-East Monsoon winds. The vast Indian shoreline and also
mountainous terrains act as ideal locations for near-shore and onshore wind farm
locations respectively. Several shallow parts along the islands of Lakshadweep and
Andaman and Nicobar as well as Sundarban Delta can be used for offshore setups.
The current trends provide an optimistic view to the wind energy market conditions in
India. Looking at the data provided in Exhibit B and Exhibit C we can assess the current
scenario of Indian wind energy market. Exhibit B specifies the current maximum
capacity that each state has in terms of wind energy installations. Exhibit C emphasizes
on the last 3 years of data on wind energy generation achieved by each player state. The
difference between the values in Exhibit B and Exhibit C make up the gap that can be
exploited for future market competition.
Microgeneration is another aspect of wind energy that can be implemented widely
throughout the country.

MARKET PLAYER ANALYSIS

After understanding the factors that affect the wind energy market in India, it is time to
have a look into the market and the players currently operating in the market. There are a
number of small and big players in the wind energy market of India. Here we shall be
looking at brief data of the top market players.

SUZLON ENERGY LIMITED


Suzlon Energy Ltd., which commenced operations in India in 1995 with just 20 people,
has now grown into one of the major global leaders in the wind power industry. Suzlon
provides ‘End-to-End Solutions’ for the Indian markets in the wind power domain. From
initiating a project, till completion and beyond, Suzlon offers solutions at every stage of
wind-powered energy. Some quick facts about Suzlon are:

Current cumulative installed base (YTD March.2009) is more than 4400 MW


across 8 states in India.
Suzlon enjoys market leadership edge in India with a consistent market share of
over 50% consecutively in the last 10 years.
9% global market share and ranked 3 rd as global market supplier.

17
Market leader in Asia with operations now extending to 21 countries across
America, Europe and Australia.
Sophisticated R&D capabilities in Denmark, Germany, India and The Netherlands
In 2008-09: the total projects commissioned by Suzlon Clocked 782 MW giving
the company a market share of 52%
Patronized by hundreds of customers across India from varied business segments
- clientele includes small / medium / big sized companies; Indian / Multinational
corporate houses, private / public sector enterprises, community ownership and
even High Net worth individuals (HNI)

Currently Suzlon has 11 manufacturing facilities in India employing over 3,000 people
with an output of close to 12,000 MW per year.
Name Location Manufactured Components

Production Chakan, Generators


Facility Maharashtra

Control Panel Daman Control Panels


Unit

Integrated Daman Rotor Blade, Nacelle, Nacelle Cover ,


Manufacturing Control Panel & Hub WTG Assembly
Facility

Rotor Blade Dhule, Rotor Blades


Manufacturing Maharashtra
Facility

Tubular Tower Dhule, Tubular Tower


Manufacturing Maharashtra
Facility

Tubular Tower Gandhidham, Tubular Towers


Gujarat

Integrated Pondicherry Rotor Blade, Nacelle, Nacelle Cover ,


Manufacturing Control Panel & Hub WTG Assembly
Facility

Composite Vadodara, Synthetic Fiber


Engineering Cell Gujarat

VESTAS WIND TECHNOLOGY INDIA PRIVATE LIMITED

18
Vestas Wind Technology India Private Limited (Formally Known as NEG Micon), is a
wholly owned subsidiary of Vestas Group, Denmark. Vestas is the world leader in Wind
energy with a market share that is twice that of its nearest competitor. In 25 years, Vestas
has installed more that 33,500 turbines in over 60 countries. In India, Vestas has been
present for over a decade and has installed wind turbines across the country. Vestas
Indian operation is headquartered in Chennai and has world class manufacturing facilities
in Chennai and Pondicherry.

ENERCON INDIA LIMITED


Enercon India, since its inception in 1994, has been making giant strides. It has already
installed more than 1800 wind energy converters in India with total installed capacity
exceeding 1000 MW. An ISO 9001-2000 certified company for manufacturing,
installation and services. It has presence in seven high wind potential states viz,
Karnataka, Maharashtra, Tamil Nadu, Rajasthan, Gujarat, Madhya Pradesh and Andhra
Pradesh. Enercon turbines have proven its viability in all categories of sites in the country
right from Kanyakumari in Tamil Nadu to Jaisalmer in Rajasthan. Wherever they were
installed the machines have performed the best both in terms of generation and in terms
of low maintenance. Moreover its grid friendly nature has made it the naturally preferable
wind machine. Wind Potential in India as per Enercon’s analysis
Eight states have commercially feasible wind potential.
Mapped Potential at 50 meters. Hub height - 45,000 MW.
Installed as on March 2004- 2483 MW, hence huge untapped potential exists.
Govt. of India has proposed capacity Installation of 10,000- 12,000 MW of
renewable energy sources over next 10 years.
Ministry of Non-conventional Energy Sources, Government of India plans to
generate 50% of above from wind energy translating into annual additions of
5000 - 6000 MW.

These are the few market players that have been touched to understand their functioning
and position in the market.

CONCLUSION

The following points can be concluded depending on the assessment of wind energy
potential in India.
Wind energy capacity in India is as large as 100GW.
Wind energy is steadily increasing at a constant increase of about 5000MW per
year which is a good sign.
With the support from central and state government and the promotional policies
it is easier to enter, install, generate and sell wind energy and obtain substantial
profits in short span of time.

19
The environmental affects include reduction in carbon footprint, reduction in
pollution and cleaner and greener energy production. Also carbon credit earnings
are an add-on profit.
Technical and technological advancements are constantly improving the
efficiency of wind turbines and thereby increasing the capacity.

Thus it is time to answer the 2 major questions that we put forward in the start of the
report.
1. Is it feasible and wise to enter the wind energy market in India?
Yes. This is the best time for any firm to enter the Indian wind energy market.
The conditions are favourable in all aspects that is political, economical, social,
environmental, geographical and technological factors are facilitating and all
direct towards a profitable business. Moreover the huge gap between the demand
and supply of power and possibility of feeling the deficit with wind energy being
high gives an impetus to the decision to enter the market.

2. If yes, then which state of India or which location will the firm like to target as
their entry point?
Looking at the various aspects and details it will be advisable to enter
Maharashtra with the new projects. The reasons are as follows:
The State government is providing ample subsidies, loans and tax
exemptions to firms establishing wind farms in the state of Maharashtra.
The geographical location of Maharashtra is best suited for establishing
wind farms. With high altitude western ghats and Sahyadri ranges we have
large number of suitable locations for onshore wind farms. Similarly the
large coastline provides an opportunity to establish near-shore and
offshore wind farms.
Players like Suzlon have already established their bases in the state which
prove that even other firms feel it feasible to setup projects in
Maharashtra.

It is also important to device a strategy to enter the market. The market strategy for wind
energy generation not being very extensive or diverse can be summarized as follows:
Large scale wind farms can be installed providing high capacity power
generation.
Efficiency of installed wind farms can be improved by phasing out older turbines
and replacing them with modern highly efficient turbines that have more
production capacity. Thus more power is produced with same number of
installations.
Carbon credits earned by these projects can be utilized for other ventures or can
be sold in the market to generate additional revenue.
Microgeneration can be targeted as another segment. Potential areas for
microgeneration projects are remote villages, tribal areas, forest areas, isolated
production / mining sites of companies, border areas etc. Moreover, medium and
large scale industries can install their own wind mills and obtain their own power
through microgeneration and thereby saving on their electricity costs.

20
Microgeneration can also be encouraged in small colonies and societies in urban
areas for uses like water pumping, street lighting etc.

Hence, this is how we have assessed the wind energy market potential in India which
represents a very bright future and loads of opportunities for growth and development in
energy sector.

21
Figure 1: Schematic Diagram of a Wind Mill

22
Figure 2: Wind Map of India

23
EXHIBIT A

WEG Installation Details World - Country Wise (in MW)

Up dated on 01.04.2009

Year 2006 2007 2008 2009


EUROPE
Germany 19540 21283 23300 23903
Spain 11340 13400 15900 16740
France 1009 2085 3262 3387
Denmark 3137 3134 3148 3180
Italy 1840 2410 2933 3736
UK 1937 2203 2768 3334
Netherlands 1445 1655 2013 2216
Portugal 1314 1944 2462 2833
Austria 965 975 982 995
Greece 642 753 910 985
Ireland 525 760 806 1053
Sweden 515 572 736 1021
Norway 281 333 444 436
Belgium 167 215 287 384
Poland 108 244 280 405
Turkey 49 147 423 383
Finland 86 107 128 143
Ukraine 70 86 86 90
Estonia 40 58 58 78
Luxembourg 35 35 35 35
Czech Republic 28 56 56 133
Latvia 25 27 27 27
Lithuania 6 56 52 52
Switzerland 12 12 14 14
Russia 7 7 7 11
Hungary 14 37 112 127
Croatia 17 17 17 17
Slovakia 5 5 5 3
Cyprus 0 - - -
Romania 1 3 8 10
Bulgaria 1 33 109 158
PACIFIC REGION
Japan 1078 1491 1538 1540
Australia 817 892 824 1306
New Zealand 168 322 322 468
Philippines 25 25 25 33

24
Pacific Islands 24 24 24 24
MIDDLE EAST & AFRICA
Egypt 157 230 310 365
Morocco 64 124 124 134
Iran 47 48 67 67
Tunisia 20 20 20 54
Reunion (France) 10 10 10 10
Israel 8 8 8 6
Cape Verde 3 3 3 3
South Africa 3 3 9 9
Jordan 2 2 2 2
LATIN AMERICA
Brazil 206 296 273 336
Costa Rica 71 72 92 92
Caribbean 57 57 57 57
Argentina 26 27 30 30
Colombia 20 20 20 20
Cuba 5 5 7 7
Mexico 5 88 88 88
Chile 2 2 20 20
Peru 1 1 1 1
Falkland Islands - - 1 1
Nicaragua - - - -
Ecuador - - 2 2
ASIA
India 5341 7000 8757 9645
China 1600 3655 9000 12200
South Korea 119 175 224 233
Taiwan 106 188 213 224
Sri Lanka 3 3 3 3
Bangladesh 1 1 1 1
USA
Texas 2699 3585 5834 7314
California 2323 2376 2508 2517
Iowa 836 967 1408 2810
Minnesota 794 897 1366 1752
Washington 590 818 1296 1375
New Mexico 407 496 496 497
Oregon 438 438 964 1067
Oklahoma 475 595 689 708
Wyoming 288 288 379 676
Colorado 291 366 1067 1067
New York 280 390 707 832
Kansas 264 364 465 815
Montana 146 146 165 272
Pennsylvania 153 178 294 361
Illinois 107 305 907 915

25
North Dakota 128 179 435 714
Nebraska 73 73 73 73
West Virginia 66 66 230 330
Wisconsin 53 53 327 395
South Dakota 44 44 197 187
Idaho 75 75 75 75
Tennessee 29 29 29 29
Hawaii 49 63 63 63
Ohio 7 7 7 7
New Jersey 8 8 8 8
Vermont 6 6 6 6
Michigan 3 3 55 129
Alaska 2 2 2 2
Utah 1 1 20 20
Rhode Island 1 1 1 1
Massachusetts 4 5 5 5
Indiana - - 130 131
Missouri - 57 162 163
Maine - 42 42 47
New Hampshire - 2 1 25
CANADA
Canada 1079 1588 1876 2369

Grand Total 66,663 81,957 105,732 120,645

source: http://www.windpower-monthly.com/WPM:WINDICATOR:410681362

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EXHIBIT B

India State Wise


as on 31.03.2009
Capacity in
Sl.No State MW

1 Tamilnadu 4304.5

2 Karnataka 1327.4

3 Maharashtra 1938.9

4 Rajasthan 738.4

5 Andhra Pradesh 122.5

6 Madhya Pradesh 212.8


7 Kerala 27
8 Gujarat 1566.5

9 West Bengal 1.1


Total 10242.3
Source: http://www.inwea.org/installedcapacity.htm

27
EXHIBIT C

Wind Power Programme


TOTAL GENERATION FROM WIND POWER PROJECTS
(MU)
As on 31.03.2008
S. Name of Generation Generation Generation
No. the State
Up to Up to Up to
2005-06 2006-07 2007-08
1 Andhra 1041.3 1190.48 1020
Pradesh
2 Gujarat 1461.31 1916.22 2924
3 Karnataka 2342.34 3470 5581

4 Kerala 15.86 15.86 0


5 Madhya 234.13 304.56 469
Pradesh
6 Maharashtra 3440.11 5131.61 6958
7 Rajasthan 922.72 1455.32 2135

8 Tamil Nadu 15413.3 20682.14 26748

9 West Bengal 3 3 0

Total 24874.07 34439.19 45827


Source: http://www.windpowerindia.com/statcumul.html

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Total Generation from Wind Power Projects

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45000
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30000 2005-06
25000 2006-07
20000 2007-08
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29
BIBLIOGRAPHY

Indian Wind Energy Outlook 2009, GWEC.


Global Wind Energy Outlook 2009, GWEC.
www.suzlon.com
http://www.enerconindia.net
http://www.cwet.tn.nic.in
www.vestas.com
www.geda.org.in
www.emeraldinsight.com
http://en.wikipedia.org/wiki/Wind_power
http://www.windpower-monthly.com/
http://www.windpowerindia.com/statcumul.html
http://mnes.nic.in
Paola Solari and Gabriella Minervini, Exploitation of renewable energy sources
and sustainable management of the territory Wind farms in Regione Liguria, EIA
Office, Regione Liguria, Genova, Italy
Ishan Purohit and Pallav Purohit, Wind Energy in India: Status and future
prospects, Journal of Renewable and Sustainable energy, 8 July 2009.

30