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VOLUME 3 ISSUE 5

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Volume 3

Issue 5

March 2013

Hyderabad

Your guide to Renewable Energy

march 2013

Listen to the high winds…

India’s potent wind energy sector has been wavering of late, yet there are reasons to believe that the rough weather will only make it grow stronger and faster

VOLUME 3 ISSUE 5

march 2013

VOLUME 3

In this Issue

ISSUE 5

March 2013

w w w . e n e r g y n e x t . i n

Cover Story

Listen to the high winds…

12

Editor-in-Chief Debashish Majumdar Publications Director R Ramprasad Head - Content Keshav Chaturvedi Associate Editor Rosy Mishra Associate Editor Sapna Gopal

India’s potent wind energy sector has been wavering of late, yet there are reasons to believe that the rough weather will only make it grow stronger and faster

Assistant Editor Upendra Singh Assistant Editor Sayantani De Design Rahul Awasthi Head - Business & Events Anupam Daftuar Marketing & Circulation Nidhi Dutta Manager - Research Anup Kumar

For the latest Renewable Energy news. log on to www.energynext.in

22

In Conversation

S. Padmanaban

Perspective

33

Anil Kakodkar

37

Solar Trade War

The curious case of DCR

Eminent nuclear scientist and SECI Chairperson Dr Anil Kakodkar shares his thoughts on India’s solar power prospects and plans for indigenisation of the sector

Energy Next is printed by R Ramprasad and published by R Ramprasad on behalf of Focal Point Media Services Pvt Ltd #407, Fifth Floor, Pavani Plaza, Khairatabad, Hyderabad - 500 004 AP. India. Focal Point Media Services Pvt Ltd is a joint venture of Gateway Media Pvt Ltd, and Invision Communications & Research Pvt Ltd, and printed at M/s. Kala Jyothi Process Pvt Ltd 1-1-60/5, RTC Cross Roads, Musheerabad Hyderabad - 500 020, and published at Focal Point Media Services Pvt Ltd, #407, Fifth Floor Pavani Plaza Khairatabad, Hyderabad - 500 004 AP. India. Tel: +91 40 233 000 61, 233 006 26 Fax: +91 40 233 006 65 Editor-in-Chief: Debashish Majumdar

USAID/India Senior Energy Advisor S Padmanaban talks about the role of US assistance in India’s transition to a high-performing, low-emissions and energy-secure economy

The US complaint to WTO over India’s domestic content condition in JNNSM highlights the increasing importance of RE as the new battleground in global trade

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In this Issue

42

Green Tracks

Better service with less energy The Metro is contributing big time to electricitysaving efforts in Delhi by undertaking a number of initiatives

Wind of Change

45

Breathing new life into old turbines India has good potential for repowering with higher capacity turbines to increase yield; however, favourable policy guidelines are needed to make this possible

50

State Initiative

TN empowers poor through RE A solar-powered green house scheme is going to make a lasting positive difference to the lives of people in the most deprived areas

55

Global Voice

Milo Sjardin Head of Asia Pacific at Bloomberg New Energy Finance Milo Sjardin speaks on the trends that will influence the clean energy sphere in the near future

IREDA Corner

60

Gauging carbon footprint A move by the financial institution to count its carbon footprint reasserts its leadership in the Indian cleantech movement

From the Editor-in-Chief

Making the most of the wind

F

or several years now, wind power has been one of the fastest-growing sources of clean and renewable energy around the world and the year 2012 did not disappoint either.

According to the Global Wind Energy Council (GWEC), the wind energy market in 2012 had an annual growth of almost 10 per cent. Although the Chinese market slowed a bit, possibly due to short-term issues like market consolidation and rationalisation, for the US, it proved to be the strongest year with a record level of installations.

European markets, too, did exceptionally well.

Wind’s rapidly rising power generation capacity is making it increasingly cost-competitive with conventional fuels in a growing number of countries. For instance, in Australia, which has some of the world’s best fossil fuel resources, building wind farms is now cheaper than building new coal or gas power stations, says a study by Bloomberg New Energy Finance.

In India, wind is already cost-competitive with heavily subsidised fossil fuel based energy in several states. The International Renewable Energy Agency (IRENA) says one of the reasons that wind power has become competitive with fossil fuel-fired electricity is that wind turbine prices have started to fall again after a temporary spike. That trend is likely to continue as low-cost manufacturers from emerging economies enter the global market. A few years ago, a similar trend was witnessed in the solar energy market, too, when Chinese manufacturers started manufacturing large quantities of panels quickly and cheaply, causing the prices to head south.

The story of wind, however, is a little different. Here, technology has played a more effective role. Improved designs, including bigger blades and taller towers have all led to enhanced efficiency. Wind farm designs have also changed for the better.

Established technology has led to big investments in wind sector in India, too.

The country is emerging as a major wind turbine manufacturing hub today. Indian companies now export locally manufactured wind turbines and blades to Australia, Brazil, Europe, USA and a few other countries. Some of the international companies with subsidiaries in India are sourcing much of their components from Indian manufacturers.

The recently announced Union Budget 2013-14 has provided further impetus to the wind sector through the reintroduction of the Generation Based Incentive (GBI). Not only that, the new budget has also earmarked a sum of ` 800 crore for this purpose, reaffirming the government’s commitment to the growth of clean energy in the country.

In terms of power generation from wind, India ranks fifth in the world and has a total installed capacity of almost 18,000 MW. This will only improve over time – with fresh policies and more investments coming in, say experts. Exploring new avenues like offshore and repowering will add to the strength.

The speedy growth of the wind sector will lead to higher demand for trained manpower, and therefore, creation of more jobs. The sector could employ millions across the world over the next decade.

So, the wind industry looks certain to play a major role in our energy future and in our efforts to combat climate change. Its brisk pace is bound to force the pace of sustainable development all over the world. All it needs is the assurance of an unwavering policy and regulatory system. As British Prime Minister David Cameron says, green technologies like wind power are “a growth item” that can increase economic growth and must be promoted in the face of opposition. “This is a battle we must win.”

Debashish Majumdar Chairman & Managing Director, IREDA

news Energiser India’s first offshore wind energy project in Gujarat has been included in the provision made by the state in the budget with an aim to raise energy generation by 3,665 MW.

04 | Energy Next | March 2013

national Energiser Tata Power got its third RE power plant, its 50.4 MW wind project at Samana in Gujarat , registered under CDM programme

by UNFCCC - the other two being the 50.4 MW wind project at Khandke, Maharashtra and 25 MW solar project at Gujarat’s Mithapur.

March 2013 | Energy Next | 05

news Energiser Odisha will soon set up a dedicated public sector company, Green Energy Development Corporation, with the aim of developing small hydro power projects in the state.

06 | Energy Next | March 2013

national Energiser The UP govt has announced that Agra is set to become the country’s first ‘solar city’.

A Detailed Project Report (DPR) has been sent by the Agra authorities to the Centre.

March 2013 | Energy Next | 07

news Energiser The Energy Technologies Institute is launching a project with Pelamis Wave Power to boost the costeffectiveness of large-scale wave energy converter arrays in the UK.

08 | Energy Next | March 2013

international Energiser Libya is capable of generating approximately five times the amount of energy from solar power than it currently produces from crude oil, a recent research by Nottingham Trent University shows.

March 2013 | Energy Next | 09

news Energiser Geothermal power generated in Iceland will now be used

by European cars. As per a deal between Reykjavik’s Carbon Recycling International (CRI) and Dutch oil company Argos, CRI will provide methanol which Argos will add into gasoline.

10 | Energy Next | March 2013

international Energiser Thailand unveiled the largest wind farm in ASEAN recently.

The West Huay Bong 2 - West Huay Bong 3 project in Nakhon Ratchasima province is expected to generate almost 1,200 MW in eight years.

March 2013 | Energy Next | 11

Cover Story

India’s Wind Power

Listen to the high winds...

12 | Energy Next | March 2013

India is already one of the world’s major wind power producers and has the potential to assume a bigger role in the global energy scene in the future, but in the last one year, the sector has slowed down a bit owing to an environment of ambiguity.

Upendra Singh takes a look at the barriers that need to be addressed to bring the sector back on track

T

he global wind energy market, despite going through tough times, witnessed a capacity addition at an annual growth of 10 per cent, according to the Global Wind Energy Council (GWEC). Global investment in renewable energy fell by 11 per cent in 2012, yet it proved to be the second most successful year ever for the global wind energy market. According to GWEC’s 2012 market statistics, the global wind power sector installed 44.7 GW of new wind power capacity as compared to 40.6 GW installed in the previous year.

The United States (US) had an impressive year which saw an installation of over 8 GW capacity in the last three months of 2012 alone, largely to thrash an anticipated end of the US Production Tax Credit (PTC). However, the same couldn’t be said about the Indian wind industry which has struggled to maintain the momentum gained in 2011 in the backdrop of sudden reduction in tax incentives by the government. Today, while India’s renewable energy sector enjoys the support of various policy initiatives taken by the government in recent times; the wind industry is faced with the challenge of living up to the expectations in the wake of incentive withdrawal.

Industry and AD, GBI According to the third edition of the report “India Wind Energy Outlook”, jointly published

by WISE, IWTMA and GWEC, India is one of the global leaders in wind power, and has a key role in fuelling the country’s growing economy, by delivering substantial amounts of clean energy. However, despite all the progress and achievements, the Indian wind industry is still heavily dependent on tax incentives to attract a specific category of investors. Much to the agony of the Indian wind power players, the Finance Ministry announced that it was ending the Accelerated Depreciation (AD) incentive which had been in force for a decade.

The AD was a mechanism whereby 80 per cent of the capital cost qualified for tax break in the first year itself, which attracted a lot of investors. At the same time, the suspension of Generation Based Incentive (GBI) scheme didn’t help the cause either, forcing strong reactions from the industry.

AD was instrumental in encouraging companies to erect most of India’s wind power capacity till March 2013; however, several experts were critical

March 2013 | Energy Next | 13

Cover Story

India’s Wind Power

The India Wind Energy Outlook 2012 report predicts installation of 89 GW of wind power in the country by 2020, up from almost 18 GW in August 2012

of the fact that this addition was done merely to gain tax incentives and without any serious motive to generate electricity efficiently.

Contrary to this perception, DV Giri, Secretary General of Indian Wind Turbine Manufacturers Association (IWTMA), says it is “unfortunate that AD is seen in a negative manner”. He terms the situation paradoxical as high-efficiency coal boilers, despite causing pollution, enjoys AD, whereas the non-fossil fuel and pollution-free wind power does not.

Giri goes on to say that there is no difference in the performance either of GBI or AD which the industry has mapped since 2006. “AD is a tax deferral and not a subsidy and an encouragement to the private sector for profit-making companies to deploy their funds into renewable energy. We cannot forget that fossil fuels are not going to last forever and there is an urgent need for a judicious mix of various energies to achieve energy security,” he emphasises.

The Ministry of New and Renewable Energy (MNRE) was instrumental in getting the AD extended for another three years, from 2009 onwards. The ministry even made a representation to the Finance Ministry for the continuation of the scheme even after March 31, 2012. On the contrary, it is believed that the Finance Ministry went by the observation of the Integrated Energy Policy Committee of Planning Commission which opined that the incentives for the wind sector should not be based on installation but they have to be based on generation. Some experts say that it is quite baffling that AD has been discontinued for the wind sector while other forms of renewables still enjoy that benefit. The industry is looking forward to the restoration of AD and/or GBI. However, as per the latest available reports, GBI has been restored in the new budget, but the struggle to get AD back is still on. Reacting to the news, Chairman of Indian Wind Turbine Manufacturers’ Association, Ramesh Kymal, said the announcement brought “some relief”

14 | Energy Next | March 2013

to the wind energy sector.

Performance in 2012 At the time of the withdrawal of AD and the suspension of GBI, the industry had said that the rapid advances made by the wind sector in recent times would be lost. The Indian wind power industry installed a record 3,196 MW of new capacity in the year 2011, driven primarily by AD and GBI. However, the sector seems to have lost the momentum after the two government incentives expired in March 2012.

Since April 2012, Indian wind power has been struggling to come to terms following the removal of the incentive schemes. This has not only made the existing players circumspect, but the prospective investors in the sector are waiting for favourable conditions before putting in money.

During the first six months of the FY 2012-13, March-September, the country managed to add just 844 MW as compared to 1,400 MW added during the same period a year back, and by the end of the year, the total installation of new wind power capacity reached 1,020 MW. Even if an additional installation of 600-700 MW is achieved by March 31, 2013, the total addition for the year would be 1,700-1,800 MW which accounts for a deficit of around 40 per cent.

Giri goes even further while predicting the consequences of the discontinuation of AD by saying that the withdrawal of AD coupled with the non-availability of GBI from 1.4.12 will result in almost 50 per cent drop in installation between 2011-12 (3126 MW) and an expected 1500 – 1600 MW in 2012-13.

Manufactures feeling the brunt As per the India Wind Energy 2012 report, India is on way to becoming a wind turbine manufacturing hub, as global and domestic majors are beefing up their operations in the country. The report says, “Established and proven wind turbine technology in India led to huge investments in the sector. Increased domestic demand in the recent years and expansion of the in-house manufacturing capacity of the Indian wind industry

is not only affected by AD, but also the absence of a policy on GBI as well”. He adds that the supply chain management in the wind industry which is a capital goods industry is extremely sensitive and critical components are tailor-made and are long lead items with annual contracts to ensure continuous and regulated supplies.

has resulted in attracting many new manufacturers into the fray.”

However, the discontinuation of the twin incentive schemes have kept capacity addition lower in the current fiscal against that achieved in the last fiscal, which has led to an adverse impact on the balance sheets of the turbine manufacturers that dominate the Indian wind power industry.

The growth of the Indian wind power industry took a giant leap with the introduction of incentive schemes such as Accelerated Depreciation.

The wind turbine manufacturers in the country played an important role in the growth of the sector by doubling up as developers alongside manufacturing turbines. On the one hand the manufacturers benefitted by assuming the role of developers, but on the other hand the potential investors in the sector stood benefitted by AD. Major wind turbine manufacturers like Suzlon, Vestas, Gamesa, Enercon, and LM Wind Power are feeling the pressure, and therefore, calling for restoration of the tax incentives.

The Indian Wind Turbine Manufacturers Association (IWTMA), the umbrella body of leading wind turbine manufacturers in India, has been continuously urging the government to revisit its decision

The wind energy sector in India is a major contributor in the renewable energy industry and has the potential to help attain the goal of 15 per cent share of renewable power in the country’s energy mix by the end of this decade of discontinuing the incentive schemes. The association feels that the restoration of AD and GBI will help in reversing the fortunes of the wind power industry, as the initiative would instil confidence in the investors who are planning to make an entry into the market. Giri says the withdrawal of AD has had “serious consequences” on Indian manufacturing companies, in buildup of inventories, delay in supply chain activities and working capital lock-up as everyone is aware that the “market

Demand for restoration of incentives The incentives - both AD and GBI - enabled companies to accelerate their technological innovations, in combination with customers in realising the longer-term goal of achieving parity with conventional energy sources without the need for subsidies and incentives. Industry experts view the incentive withdrawal coupled with a tough global economic situation as the main reason for the wind sector in India to have performed below expectations.

Ever since the withdrawal of the incentive schemes, the industry has been demanding their restoration for at least some more time so that the sector can stand on its own and the growth trajectory is achieved. “Failure to maintain the incentive schemes will significantly hamper the growth and progress made until now,” says Leo Schot, CEO, LM Wind Power.

He adds, “It will have significant consequences in terms of loss of environmental gains from more clean energy supplies, loss of the tax and exports and loss of valuable employment.”

The India Wind Energy Outlook 2012 report predicts installation of 89 GW of wind power in the country by 2020, up from almost 18 GW in August 2012. However, to achieve that target, current policy scenario, renewable project obligation in various states, need to be a way for the government. The MNRE has also echoed the sentiments of the wind industry and has even promised support in getting at least GBI restored for the sector. On another front, the Indian Wind Power Association (IWPA) has rallied behind restoration of AD, and its Chairman, K. Kasthoori Rangaian even met Union March 2013 | Energy Next | 15

Cover Story

India’s Wind Power

Finance Minister P. Chidambaram to apprise him of the facts through a presentation which said the ‘Accelerated Depreciation’ was only a revenue deferral, and not sacrifice to the government.

Challenges Besides the difficulties caused by the removal of the twin incentive schemes, the wind energy sector has several other barriers to address – one of the major issues being the absence of adequate transmission infrastructure. Tamil Nadu, the leader in India in wind turbine installation, with an installation of over 7,100 MW, is currently losing out due to insufficiency of evacuation lines. DV Giri sees this as a nemesis for new investors in the state. “Tamil Nadu still holds Number 1 position in wind turbine installations totalling 6987 MW up to 2011-12 and installed another 163 MW up to December 2012. The problem of evacuation is definitely a challenge in Tamil Nadu,” he says.

Then there is the issue of finance, as the financial institutions and banks are becoming increasingly reluctant in the absence of payment security.

Also, the removal of incentive schemes has not helped the case, as the banks feel that their money couldn’t be recovered on time. In the absence of attractive incentives and feed-in-tariffs, wheeling, transmission and other charges are making the wind power projects not so viable for captive and group captives.

Blessing in disguise?

Amid the subdued market, and business witnessing a downfall, there are those optimists who see the removal of these incentive schemes as a blessing in disguise for the wind energy sector in the country. They are of the opinion that with the number of installations coming down in the wake of non-serious players opting out, the extravagant demand for land may also ease a bit bringing down the exaggerated prices, thereby bringing down the cost of the entire project substantially.

Looking to the future In 2011, the state-run Centre for Wind Energy Technology (C-WET)

16 | Energy Next | March 2013

reassessed the country’s wind power potential at 102,778 MW at 80 metres height at 2 per cent land availability.

This estimate was up from the earlier estimate of approximately 49,130 MW at 50 metres, also at 2 per cent land availability. Going further, the Lawrence Berkeley National Laboratory predicted India’s wind power potential to be 30 times higher than actually estimated.

Wind power generation has grown at a rapid speed in the country over the recent years, especially in 2011, only to be jerked in the financial year 2012-13. The wind energy sector in India is a major contributor in the renewable energy industry and has the potential to help attain the goal of 15 per cent share of renewable power in the country’s energy mix by the end of this decade, a target set under the National Action Plan on Climate Change (NAPCC).

However, to help the sector realise its true potential, and to keep it moving in the right direction, there needs to be a decisive intervention by the government. The industry and the experts want the Indian government to come with a comprehensive renewable energy law at the national level, devise preferential tariffs, incentives for repowering of older farms, creating evacuation and transmission infrastructure, grid integration, accurate forecasting mechanism, streamlining of supply chain, etc.

There have been suggestions for a ‘National Mission for Wind’ on the lines of the Jawaharlal Nehru National Solar Mission (JNNSM) to give the wind energy industry more visibility to the financial sector. “The extension of the Indian government’s visionary measures like GBI and AD or other similar incentives can help achieve that target,” asserts Schot. He says the government initiatives will enable companies in the wind industry to bring environmental, economic and social benefits, and tax and export revenues besides high-quality employment for talented people in the country.

In 2011, the state-run Centre for Wind Energy Technology (C-WET) reassessed the country’s wind power potential at 102,778 MW at 80 metres height at 2 per cent land availability

‘Wind has potential for further growth in India’ In an interview to Energy Next, MNRE Joint Secretary Alok Srivastava speaks about the state of India’s wind sector and the government’s plans to exploit its full potential

Q: It is going to be a year since the AD was discontinued and the GBI suspended, and the wind power industry in the country wants them back. Do you think it was the right time to do away with the incentive schemes for a growing sector?

A: It was not all of a sudden that the Accelerated Depreciation (AD) and generation based incentive (GBI) schemes were discontinued.

According to a Cabinet decision of 2009, AD was to be withdrawn at the introduction of the Direct Tax Code (DTC) or the completion of 11th Five Plan period - whichever happened first. While DTC has not been introduced yet, the 11th Plan period ended on March 31, 2012, and accordingly the AD benefit stood withdrawn on March 31, 2012. GBI was also started in pursuance of the same Cabinet decision which was to run during the remaining period the 11th Five Year Plan. The wind power industry was well aware of this cabinet decision. Subsequent events have shown that the wind power sector does require these benefits for further period for adequate investments and development of grid-connected capacity addition.

Q: Do you think that AD was impacting the Indian wind energy sector in a negative way?

A: The development in the wind sector has been almost entirely through AD from the beginning till December 2009 when the GBI scheme was started. Of course, a developer could avail of either one of the AD or GBI benefit during the period December 2009-March March 2013 | Energy Next | 17

Cover Story

India’s Wind Power

2012 when both the schemes were operative. Hence it would not be correct to say that the industry has not developed due to AD. The wind sector attracted investors in good numbers.

Today, while the wind sector does not receive the AD benefit though other renewable energies get this benefit.

Data from Central Electricity Authority (CEA), an independent authority under the Ministry of Power, shows that the overall Capacity Utilisation Factor (CUF) from wind power projects right from their inception is in the range of 21-22 per cent which is very good in view of the moderate wind speeds prevalent in our country. Moreover power utilities would not pay the wind power generators if they don’t generate electricity.

transmission infrastructure in the country essentially to take care of further addition of renewable energy capacities in India. The report- Green Energy Corridors Report- estimates a requirement of around Rs 43,000 crore to extend the existing lines as well as develop new evacuation and transmission infrastructure for RE projects. Under this programme, development of inter-state corridors and intra-state transmission will become possible so that power generated at the good renewable energy sites could be added in the grid. The Energy Management Centres that are proposed in the report would effectively integrate the renewable energies in the grid, taking care of their variable nature.

Q: So, you want to say that AD helped the wind sector in India to grow rather than the perception of the critics that non-serious players took advantage and entered the sector?

Q: What is being done at the government level to address the issue?

A: Wind power sector has proved that it has potential and has shown consistent growth in the last decade and a half. As I have mentioned electricity generation figures from Central Electricity Authority (CEA) show that the wind farms in our country have performed at a CUF of 21-22 per cent. Even today, there are investors who want to invest in the sector and it is good that investors are showing interest.

Q: Trends show that the installation in the current fiscal will fall around 40 per cent as compared to last year.

What is MNRE doing to instil faith in the investors?

A: Over the last 10 months, there has been reasonably good capacity addition in the wind power sector even though it is not at the same level as it was for the same period of last financial year. Yet we are confident that wind energy will continue playing a major role for development of renewable energy sector in the country. Even in the 12th Five Year Plan we have pinned hope on wind sector that will contribute 15000 MW out of a total of 30000 MW of capacity installations over a 18 | Energy Next | March 2013

A: The MNRE, Ministries of Finance and Power and the Planning Commission are working together to tackle this issue. Concerted action is being taken so that the evacuation, transmission and grid integration programme becomes a reality. Plans are afoot to explore sources of finances through various means such as the National Clean Energy Fund, Viability Gap Funding, and soft credit from bilateral and multi-lateral funding institutions period of five years (2012-17). We feel that with some incentive mechanism in place, capacity addition will increase and we will be able to achieve our target for 2012-13.

Q: One of the major issues, apart from incentives, is the unavailability of adequate evacuation and transmission infrastructure in the country that is hampering the growth of the wind energy industry.

What is your opinion?

A: MNRE is quite aware of these issues. The evacuation and transmission infrastructure has to be strengthened to derive maximum benefits of further addition of renewable energy capacities. The ministry commissioned a study through the Power Grid Corporation of India on the status and requirements for strengthening the

Q: Do you think that wind energy has the potential to help realise the goal of energy security in the country?

A: It is quite clear as a result of various resource assessment studies that wind energy has the potential for further growth in the country. As I mentioned earlier a lot of emphasis is on wind power capacity addition in the 12th Plan. It is an industry which has developed almost entirely through the participation of the private sector.

The problems and issues of the industry are being addressed in the best possible manner. MNRE is very positive about attracting further investments in the sector, and indications point towards a bright future.

(This interview was conducted before the announcement of Budget 2013-14)

Opinion

Wind Trail

Top 10 new installed capacity jan-dec 2012 Italy** 1,173***

2.8****

Spain** 1,122***

Brazil** 1,077***

2.5****

2.4**** Canada** 935***

Germany** 2,439***

5****

2.1****

PR China** 13,200***

30****

Romania** 6,385***

2.1**** USA** 13,124***

UK** 1,897***

29**** Rest of the world** 6,385***

4.2****

14.3**** ** Country, *** MW, **** % Share

India** 2,336***

5****

Beating the odds Despite a climate of uncertainty due to policy issues and lack of stable investments, the wind sector has managed to emerge a winner. Shruti Shukla discusses in detail how the sector is faring in India and abroad

L

ast year saw the continued expansion of the global wind market, with an annual market growth of almost 10 per cent and cumulative capacity growth of about 19 per cent. It was a record year for

US installations with 13,124 MW and a slower than usual market in China with 13,200 MW, leading to the two countries all but tying for the top spot in 2012. Asia still led global markets in the regional tally, but with North

America a close second, and Europe not far behind. However compared to 2011, while China slowed down a bit, both the North American and European markets had exceptionally strong years.

March 2013 | Energy Next | 19

Wind Trail

The wind scenario in India India is a key market for the wind industry, presenting substantial opportunities for both the international and domestic players.

In 2012, the Indian wind sector experienced slower than expected annual growth, with 2,336 MW of new installations. (See graph showing the cumulative installed capacity in India between 2000 and 2012.)

Top 10 cumulative capacity dec 2012 France** 7,197***

2.5**** 3****

Traditionally, balance sheet financiers have driven wind power development in India. Last year saw a drastic reduction in the rate of one of the two key incentives called accelerated depreciation (AD) from 80 per cent to 15 per cent in April 2012. Today, the total depreciation benefit available in the first year (effective from April 2012) comprises of 15 per cent normal depreciation and 20 per cent additional depreciation, which is available for all power sector projects.

This drop in AD benefit has had a significant impact on the growth of the market in 2012 and is likely to affect the growth prospects in 2013 as well.

REC Registry as of mid-February 2013 issued over 4,869,000 non-solar RECs. Wind power made up 56 per cent of the registered generation capacity. The market clearance price for non-solar RECs ranges between Rs 1,500 to 3,300 (~ EUR 21 to EUR 45) per certificate. However, due to poor enforcement and monitoring of the Renewable Purchase Obligation (RPO) by the states, the demand for RECs seems to be declining and a majority of RECs are selling at the floor price, as per GWEC, 2013.

Scenario for 2020 and 2030 Under the latest Global Wind Energy Outlook (GWEO), it is expected that as per the GWEO Moderate scenario, the total installed capacity would reach almost 31.4 GW by 2015, and this would go on to grow to 59 GW by 2020 and 124 GW by 2030.

According to Global Wind Energy Outlook 2012, by 2015, the wind 20 | Energy Next | March 2013

UK** 8,445***

Italy** 8,114***

2.9****

PR China** 75,564***

26.8**** USA** 60,007***

21.2****

Germany** 31,332***

11.1****

Rest of the world** 39,853***

14.1**** India** 18,421***

Canada** 6,200***

Spain** 22,797***

6.5**** 8.1****

Portugal** 4,525***

1.6****

2.2**** ** Country, *** MW, **** % Share

industry is likely to see investments of almost $6.8 billion per year, $ 9.2 billion per year by 2020 and $10.6 billion per year by 2030. Employment in the sector would grow from the currently estimated 47,500 jobs to over 98,000 by 2020 and over 126,000 jobs ten years later.

Nevertheless, the GWEO Advanced scenario shows that the wind development in India could go much further. By 2020, India could have almost 89 GW of wind power in operation, supplying 219 TWh of electricity each year, while employing

(Source: GWEC )

Opinion

over 179,000 people in the sector and saving almost 131 million tonnes of carbon emissions each year. By then, investment would have reached over $16.5 billion per year.

With an acute need for electrification and higher energy production in the country, wind energy is going to provide an increasingly significant share in the renewables based capacity. By 2030, wind power would be generating nearly 504 TWh/year and be avoiding the emission of 304 million tons of CO2 each year.

Wind energy can be a technology of

Middle East and Africa The MENA region had another quiet year, with only one 50 MW project completed in Tunisia, but

INDIA: CUMULATIVE WIND INSTALLATION(MV)

North America In a last minute rush due to the anticipated expiration of the US’ Production Tax Credit at the end of December, the US industry installed more than 8,000 MW in the fourth quarter of 2012, ending up over 13.1 GW for the year, for all practical purposes tied with China. The last minute extension of the tax credit means that although the US market will slow substantially in 2013, it is unlikely to be as much of a slowdown as was expected and the nature of the extension bodes well for the 2013 market.

Canada had a solid year and Mexico more than doubled its installed capacity, installing 801 MW for a total of 1,370 MW, joining the list of countries (now 24) with more than 1,000 MW of wind power capacity.

2000

18,421

16,084

13,065

10,926

9,655

7,845

6,270

4,430

1,456

1,167

Europe European markets, led by Germany and the United Kingdom, with surprising contributions from ‘emerging markets’ in Sweden, Romania, Italy and Poland, accounted for 12.4 GW last year, a new

INDIA: CUMULATIVE POWER CAPACITY IN MW 200,000

New Policies scenario Moderate scenario

150,000

Moderate scenario

100,000

50,000

0 2011

2015

2020

2030

16,084MW 23,784MW 32,933MW 66,400MW 16,084MW 31,499MW 59,351MW 124,826MW 16,084MW 37,436MW 82,299MW 191,711MW

(Source: GWEC )

sub-Saharan Africa’s first large commercial wind farm came on line in 2012, a 52 MW project in Ethiopia.

This is just the beginning of the wider African market. With construction started on 500+ MW in South Africa, GWEC expects Africa to be a substantial new market, where clean, competitive energy generated with indigenous sources is a priority for economic development. Morocco is moving towards construction of over 800 MW of new capacity in the next two years.

3,000

Asia Both the Chinese and Indian markets slowed somewhat in 2012, with their annual installations coming in at 13.2 and 2.3 GW respectively. Market consolidation and rationalisation in China, and a lapse in policy in India were the main reasons for this slowdown, but these conditions are expected to be short-lived and Asian dominance of global wind markets is expected to continue.

Latin America Brazil led an otherwise relatively quiet Latin America market with 1,077 MW, to bring its total installed capacity to just over 2,500 MW and Australia accounted for all of the new installations in the Pacific region, with 358 MW of new capacity in 2012 for a cumulative total of 2,584 MW.

2,125

Just like India, globally too, the performance of the wind sector has been impressive. Here’s a look at how it fared worldwide:

record. However, on-going sovereign debt crises mean that the outlook for the 2013 market is uncertain, although Europe’s framework legislation and its 2020 targets ensure a degree of stability.

Europe also continued to lead offshore markets, with a 1,166 MW installed, more than 90 per cent of total offshore installations of 1,293 MW in 2012.

1,702

choice for meeting India’s national electricity generation target. It has minimal water footprint and helps to mitigate the environmental impacts. If the existing range of policy measures and incentives are implemented fully supported by a long-term target with comprehensive grid and transmission improvements, the wind sector in India can become a 5 to 6 GW annual market by 2015.

2012

The author is the Senior Policy Advisor in the Global Wind Energy Council (GWEC). With over 8 years of experience in clean energy, she has authored several publications on renewable energy and the history of wind policies in global markets The views expressed by the author are personal March 2013 | Energy Next | 21

In Conversation

22 | Energy Next | March 2013

S. Padmanaban

‘South Asian nations are faced with an energy security dilemma’ S. Padmanaban has worked with USAID/India for over a decade, and is Senior Energy Advisor to the organisation. He is also the Director of the South Asia Regional Initiative for Energy Integration (SARI/EI). His career spans over 30 years of service as an energy specialist with multilateral, bilateral, and semi-governmental organisations in Asia and North America.

In conversation with Keshav Chaturvedi, he discusses in detail the role of US assistance in India’s transition to a high-performing, low-emissions and energy-secure economy and the possible role of renewables in the energy mix of South Asian countries

Q: Renewable energy and energy efficiency are two important components for achieving low carbon economy. India has made huge strides in this direction. How and in what role does the United States Agency for International Development (USAID) foresee itself in India’s march towards clean energy?

A: The focus really began in the early 1980’s on renewable energy when USAID supported a bilateral programme called Technologies for the Rural Poor where scientific institutions in India were partnered with counterparts in the US to research and develop renewable energy technologies, particularly solar technologies – medium temperature solar thermal and solar power generation through photovoltaic systems. In keeping with those times the agenda was left to the scientists to decide. Though many of the technologies did not make it to the market place, I think they actually provided the foundation for some of the early scientific developments in renewable energy in India.

March 2013 | Energy Next | 23

In Conversation

S. Padmanaban

USAID involvement in energy efficiency dates back to early 2000, working with the Bureau of Energy Efficiency (BEE) in the Ministry of Power. Following the Energy Conservation Act (ECA) of 2001, we worked with them as they designed and promoted India’s energy conservation building code; developed capacities in the country in energy audit; worked with several leading financial institutions to mainstream energy efficiency as a part of their investment portfolio; and more recently we are looking at promoting the development of specific industrial energy efficiency technologies. A fruitful partnership was with the Ministry of Power on the Distribution Reforms, Upgrade and Management Programme (DRUM).

Together, we believed that one of the reasons for the indifferent performance of the power sector were the losses that were taking place in electricity distribution particularly in the “last mile distribution”, and the DRUM programme sought to showcase models for demonstrating energy efficient systems in some of the distribution companies in Karnataka, Maharashtra, Gujarat, and here in Delhi. At the same time, we recognised that distribution reforms need to be inculcated as part of the human resources development function in utilities. We therefore partnered with a nation-wide network of training institutions that have, thus far, trained more than 35,000 distribution professionals in various aspects of distribution reforms: in the management, commercial, and technical operations of efficient and reliable power delivery systems. One of the highlights of the DRUM programme was the professional partnership that was created between a number of U.S. electricity cooperatives under the U.S. Department of Agriculture’s Rural Utility Service and a few Indian distribution companies such

24 | Energy Next | March 2013

as Maharashtra State Electricity Distribution Company Limited and Bangalore Electricity Supply Company Limited.

Today and into the future, USAID sees its role as equal partners with Indian stakeholders in catalyzing market-driven innovations that drive businesses to develop and offer sustainable clean energy solutions, technologies, and services.

Q: USAID attaches a lot of importance to leveraging private financers in developing clean energy.

What have you achieved in this field and what has been your learning while dealing with the private sector in India?

A: USAID recognises that the private sector, especially investors, plays a key role in developing the energy sector in the country. The pace and direction of the sector’s growth, particularly in the clean energy space is being led by public-private partnerships. And we have had several interesting and important collaborations with the Indian private sector. Let me name just two as examples of working with the Indian private sector to test, demonstrate, and validate both renewable energy and energy efficiency programmes.

One was in the early 1990s when USAID worked with the Indian private sugar industry in Tamil Nadu to establish India’s first cogeneration system with sale of cogenerated power to the state power grid. This experience was noteworthy in that several states, the Ministry of New & Renewable Energy, and financiers took the lead in making significant policy changes and encouraging the deployment of such systems.

The other experience USAID had with the private sector was in the establishment of the national green building movement in the early 2000s. Under this movement, we supported a partnership with a

leading industry association in India and the U.S. Green Building Council, which helped India to establish the second largest green building footprint in the world. So these two examples clearly show the key role the private sector could play in both directing investments in energy efficiency and renewable energy, as well as deploying them at scale. In both these areas, as well as others, the private sector has a key role to play and we are quite privileged to have worked with the Indian private sector.

Q: Off-grid is touted as an important element in rural electrification and achieving energy access to all. What are your views about it?

A: I couldn’t agree with you more.

Access to energy is critical for a country’s economic growth and development. It improves the quality of life and helps meet basic lighting, cooking, transport, and telecommunication needs. Over the past decade, India has embarked on several initiatives to provide energy access to all, especially in rural areas.

As in many countries, there is still work to be done to close the energy access gap.

There is a close correlation between income levels and access to modern energy. In such places, there is typically a low electrification rate with a high dependence on traditional biomass for meeting energy needs.

As incomes rise, access to electricity increases at a faster rate since governments give higher priority to electrification as it provides high developmental benefits. Distributed generation renewable energy (DG/RE) systems that can deliver electricity through mini-grid/off-grid networks can play a significant role in influencing such human development outcomes.

While there is a broad recognition that lack of access to modern

There are very few business models in developing countries that demonstrate and validate off-grid renewables

March 2013 | Energy Next | 25

In Conversation

S. Padmanaban

energy has major implications for development, the energy access gap is also a potential market. Business opportunities that use low-cost local renewable resources to bridge the gap are increasing.

There are, however, very few business models in developing countries that demonstrate and validate off-grid renewables. There are very few groups working in this area and, most importantly, the gap lies in the absence of institutional alliances among different stakeholders cooperating to deliver solutions in the off-grid renewable space.

There is a need for such an alliance because off-grid by definition is a decentralised issue since it involves multiple stakeholders: local governments, villagers, NGOs, utilities, technology providers, venture capitalists, institutional investors, donors, and so on.

Q: The USAID website talks of reducing market-related barriers for promoting clean energy. What in your opinion are the barriers which are withholding the true potential of energy efficiency and renewable energy in India?

A: When it comes to energy efficiency, one must recognise the satisfactory progress made over the past two to three decades in the country. Large organised sectors of Indian industry have been able to successfully introduce energy efficiency as part of their corporate strategy. There are also great opportunities in small and medium scale industry, and it is here that one needs to be innovative in terms of designing, developing, and delivering energy efficiency solutions and programmes. There are significant barriers in all developing countries that should not be underestimated.

Barriers of lack of awareness, lack of appropriate technologies and, more importantly, the lack of financing. So these need to be addressed vis-a-vis the small and medium industries.

We also have to also understand that the Energy Service Company (ESCO) concept in most Asian countries has been relatively slow in its acceptance.

26 | Energy Next | March 2013

to significant savings. Technologies like tri-generation, high and low temperature waste heat recovery, advanced micro-processor based control systems, and other cuttingedge technologies need to be introduced.

Most ESCOs are either too small or under-capitalized with performance contracts that are generally deemed as risky. So we need to ensure that financing is available to ESCOs to perform and develop acceptable performance contracts, under which they could share the ensuing energy savings with their end-user clients in proportion to the risks assumed by both parties. Finally, there is a great deal of opportunity in what I call “public use of energy,” which covers energy consumed in municipalities, water pumping, street lighting, agricultural ground water irrigation pumping, and so forth. In this “public use of energy” sector, energy wastage in developing countries is unacceptably high – more than 5060 per cent in some cases. So, we need to address the opportunities in energy savings in all these areas.

There is another point that I wish to make as far as barriers are concerned.

Some areas in developing countries’ industrial sector have not moved beyond what I call “quick hits” or “first aid measures” in implementing energy efficiency measures that typically require a fair amount of investments with simple returns of 2-3 years. Most of them, save a few, have not done enough to introduce transformational technologies that would bring about a dramatic savings in energy. Today, major energy efficiency goals can be met only if all were to take a greater risk in the introduction of technologies that are truly transformational and can lead

In the case of renewables, the major driver is the regulatory and policy climate, which is evolving and quite positive in India. Since the onset of the Renewable Portfolio Obligation (RPO) mechanism in India we are beginning to see the aggregation of renewable power portfolios in several parts of the country. To increase implementation of RPO obligations, one idea is to expand the definition of RPO to include energy efficiency as part of the RPO strategy. If we can, for instance, look at power generation from waste heat and consider that as a contribution to a region’s RPO, then that particular region might be better positioned to meet its targets.

Q: Energy efficiency retrofitting is a huge business opportunity, but there is distinct unwillingness among institutions to go for it because of maybe lack of awareness or they are in their comfort zone. So how you think this problem can be tackled because the biggest business opportunity lies in this segment?

A: Retrofitting is certainly an important energy efficiency business opportunity for buildings and industry.

Devices and systems, which enable one to save or recycle energy back into the primary process, are a good example of retrofitting. In most developing countries industry’s ability to retrofit technologies has been hampered somewhat by the fact that they have been reluctant to assume the risks associated with the delivery of energy savings. Unfortunately, we do not have a meter that can measure “energy savings” since it can never be measured, but can only be computed. The general absence of a monitoring and verification (M&V) system in industry has rendered capital investments in retrofits difficult to justify since managements are not entirely assured that these investments will

lead to actual savings. Thus, the lack of M&V systems, I think, is one of the constraints, but not the only constraint. One way to address that constraint, I think, is to make monitoring and verification protocols mandatory to follow just as we have made energy audits mandatory. Just as any given country has a number of energy audit engineers, it should also have certified energy monitoring and verification professionals, perhaps mandated under the Energy Conservation Act. If one were to do that, then the kind of investments that are required for energy retro- fits will automatically follow.

There is however, a broader constraint that needs to be mentioned and that is, energy efficiency is still seen as a boiler room subject and not a boardroom subject.

One needs to make energy efficiency a boardroom subject by ensuring that it has important implications on the productivity of a company, on its bottom line, and at a strategic level on a country’s energy security. At a strategic level, energy efficiency could help in reducing a fiscal deficit.

Let me take a moment to explain that.

Major contributors to fiscal deficits in some countries are the subsidies provided to cover the loss of revenues on account of low tariffs paid by the agricultural sector. These low tariffs, driven by social and political realities, have resulted in a major revenue gap for some power sectors. Countries attempt to bridge this gap using a combination of cross subsidies from the relatively well-off customers such as industry and a direct subsidy from the state exchequer. An energy efficiency strategy aimed at reducing energy losses in the agricultural sector would reduce power demand and result in lower subsidy payments.

Energy efficiency has implications not only at the industrial board-room level to improve the competitiveness of industry, but also has a much broader relevance at a regional level by favorably impacting the fiscal deficits.

Q: USAID also helped start the green building movement in India in 2002 as you mentioned. What has

developed so far? Today we have an indigenous rating system GRIHA. In your opinion do GRIHA and LEED gel and what have they done to further the cause of green buildings in India?

A: We at USAID have been privileged to assist the green building movement in India, in partnership with the CIIGreen Business Center in Hyderabad, whose modest 20,000 sq. ft. building was India’s first platinum rated LEED building. This building created the momentum for the establishment of the Indian Green Building Council (IGBC) in 2003. India, with more than 1.24 billion square feet of green building space, is today one of the world leaders. The IGBC has over 1,500 members and 16 offices in India and has over 1,750 LEED registered buildings in the country. LEEDIndia is a recognised brand name and covers many building types –commercial, residential, core and shell facilities, and factories.

In large countries like India with various climatic zones and multiple design, engineering and architectural practices, there is a need for more than one green rating system.

GRIHA is playing that role and I think that GRIHA and LEED-India are complementing each other in a very positive manner.

The green building movement is poised to grow quickly, largely because there are opportunities in innovative green building materials

Today, major energy efficiency goals can be met only if all were to take a greater risk in the introduction of technologies that are truly transformational and can lead to significant savings

and innovative design practices.

There is a need in any greenbuilding industry for performance evaluation of buildings not only at the design stage where a building can be termed as green based on its design characteristics, but also at the post occupancy stage. A building anywhere in the world can turn from green to grey to black very quickly if one were to allow the operating standards to slip and, therefore, it’s very important that buildings are continuously monitored to evaluate their performance. The movement has reached an authoritative footing and with the association of GRIHA, LEEDS-India, and other rating systems, I think it will go from strength to strength.

Q: PACE is an important initiative of the U.S. and Indian governments.

What has been its high points and have they evolved some best practices that can be replicated by Indian industry?

A: PACE stands for the Partnership to Advance Clean Energy and was conceived when the Indian Prime Minister Singh visited the US in November 2009. An MoU creating the PACE Programme was signed between U.S. Secretary of State Hillary Clinton and India’s Minister of External Affairs Mr. S. M. Krishna.

PACE is a collaborative effort that brings together the skills and resources of many different USG agencies including USAID, Dept. of Commerce, Department of State, U.S. Dept. of Energy, U.S. Export Import Bank, Overseas Private Investment Corporation and the U.S. Trade and Development Agency in cooperation with their Indian government counterparts.

PACE has two interlinked components: a Research Component, known as PACE-R led by USDoE and a Deployment Component, known as PACE-D led by USAID. PACE-R and PACE-D both focus on supporting, creating and nurturing innovations via public private partnerships, innovative financing mechanisms and cutting edge technology.

The PACE-R programme is under March 2013 | Energy Next | 27

In Conversation

S. Padmanaban

Programme with India to promote together the development of the clean energy market.

As we move along, PACE-D will work collaboratively with the Indian government as India advances both the pace of renewable energy and energy efficiency deployment at scale in the country.

Q: You have been associated with the energy efficiency sector for the last 37 years and have also worked closely with the renewable energy sector. What future do you foresee for both the sectors in India and elsewhere?

The general absence of a monitoring and verification system in industry has rendered capital investments in retrofits difficult to justify since managements are not entirely assured that these investments will lead to actual savings implementation and under it three areas have been identified: building efficiency, solar energy and advanced biofuels. PACE-R awards totaling $ 125 million of public-private funding have been recently conferred to several Indo-U.S. consortiums in the aforementioned three areas of research. As far as PACE-D is concerned, it is still at its early stages of implementation. USAID has an institutional contractor in place here in Delhi who has developed partnership agreements with Indian as well as U.S. sub-contractors. The programme, when fully rolled out, will work with both the Ministry of New & Renewable Energy and the Ministry of Power in the areas of renewable energy, energy efficiency, and cleaner fossil. The programme will partner with the Bureau of Energy Efficiency to advance the energy conservation building code and help introduce certain innovative technologies in Indian industry such as waste heat recovery technologies, high efficiency 28 | Energy Next | March 2013

HVAC systems and so on. The programme will also assist in the design and deployment of smart grid technologies in select Indian utilities that would lead to reduction in Aggregate Technical and Commercial Losses (AT&C) losses, demandside response programmes and the introduction of grid interactive renewable energy systems. We will also work with micro-financing institutions to support the design, development and financing of offgrid renewable energy systems to advance rural energy access.

Since PACE’s inception in 2009, the U.S Overseas Private Investment Corporation (OPIC) has approved or committed $741 million to clean energy projects. Since January 2011, the U.S. Export-Import Bank has approved nine solar energy financings with an aggregate value of over US $ 300 million, supporting 238 MW of solar energy generation. The U.S. Trade and Development Agency has established the Energy Cooperation

A: It’s clear that both energy efficiency and renewable energy are going to be key resources in the energy mix of the South Asian countries. The long-term energy security in the region is critically dependent on how the countries of South Asia are able to meet their energy demand through cost effective and environmentally sustainable ways. It is in this context that energy efficiency and renewables will play a key role. The countries in South Asia are faced with an energy security dilemma, which essentially is quite simple to describe. If they are to grow at a rate of 6-9 per cent or beyond, they are certainly going to accentuate the energy demand and supply gap even further because all the countries in South Asia except for Bhutan suffer from chronic energy shortages.

On the other hand, if they do not grow at 6 to 9 per cent, then they are going to accentuate the poverty gap, impacting the standard of living of millions of people. This is what I call the energy security dilemma.

The only long-term energy security of the region lies in the ability of these countries to harmonize their energy markets and advance crossborder energy trade from renewable energy and energy efficiency, such as solar energy or the hydro-power abundantly available in the Himalayan kingdoms of Nepal and Bhutan, and North Eastern India

Budget 2013-14

Industry Speak

BOOST FOR WASTE-TO-ENERGY The FM also proposed a scheme to encourage cities and municipalities to encourage waste-to-energy projects in PPP mode. For promoting energy generation through garbage, he said, “I propose to support municipalities that will implement waste-to-energy projects through different instruments such as viability gap funding, repayable grant and low cost capital.”

Observing that “India tosses out several thousand tonnes of garbage each day”, he said, “We will evolve a scheme to encourage cities and municipalities to take up waste-to-energy projects in PPP mode which would be neutral to different technologies.”

HOPE REIGNS

It’s one of the most keenly awaited events in the country – the announcement of the annual Budget. This year was no exception. When the Finance Minister declared the allocation of funds for the clean energy industry and the reintroduction of GBI for the wind sector in particular, it sure was a reason to cheer. But, what exactly does Budget 2013-14 entail for RE in India?

Sapna Gopal reports on what some of the industry majors have to say

F

or the renewable energy industry, this year has surely begun on a positive note. One of the most significant developments being the announcement of low interest bearing funds provided by the National Clean Energy Fund (NCEF), which will be given to the Indian Renewable Energy Development Agency (IREDA) for five years. In his Budget speech, Finance Minister P Chidambaram said, “In order to provide low cost finance, the government would provide low

P P Gupta,

MD, Techno Electric and Engineering

interest bearing funds from the NCEF to IREDA for renewable energy projects.”

Reacting to this move, Hemant Kanoria, chairman, DPSC Ltd, one of the oldest power utility companies

in India, said that it would help companies to pass on the lower financing cost to end users. “The low cost of finance shall improve project viability as India is left with low energy yield sites.”

Concurring, P.P. Gupta, Managing Director, Techno Electric & Engineering Co Ltd, stated, “It will help in lowering the interest cost which will ultimately benefit the customer. The initiative on renewable energy will also lower the coal import March 2013 | Energy Next | 29

Budget 2013-14

Industry Speak

Shruti Shukla Senior Policy Advisor, GWEC

bill which has been one of the main reasons for high Current Account Deficit as highlighted by Finance Minister.”

Since there will be financing from IREDA, extra financing would be available, added Sumant Sinha, Chairman and CEO, ReNew Power.

Shruti Shukla, senior policy advisor in the Global Wind Energy Council (GWEC), felt that this will offer some respite and help ease the high costs of borrowing for wind farm developers in India.

Making cheaper funds available for renewable energy projects through clean energy fund is a commendable initiative, reasoned Shubhra Mohanka, Director, Solid Solar. “Given the limited reach of IREDA, it should now evolve a mechanism that it can further on lend through banks. It can also work with banks that are willing to provide equivalent amount of additional funding for such projects.

This will make a larger pool of funds available for clean energy projects.”

However, she suggested that it would have been helpful if funding to such projects would have been classified under priority sector thus making more funds available at a lower cost to such projects.

Reintroduction of GBI Yet another notable announcement was the reintroduction of the Generation-Based Incentive (GBI) for wind energy projects. “The nonconventional wind energy sector deserves incentives. Hence I propose to reintroduce ‘GBI’ for wind energy projects and provide ` 800 crore to the Ministry of New and Renewable Energy for the purpose,” the Finance Minister said.

Wind industry majors believe that this spells good news for the sector in India and will have a positive impact.

30 | Energy Next | March 2013

“Clean and green energy is a priority of the government. However, despite cost advantage in labour, land and construction, consumer pays a high price for renewable energy. One of the reasons is the high cost of finance.” – P Chidambaram “It has been in the works for some time, we were expecting and it and planning in accordance with that,” admits Sinha.

As Prof K Kasthoori Rangaian, Chairman, Indian Wind Power Association (IWPA) too confesses, with such a positive policy in place, wind energy investment in 2013-14 would revive. “Those investing more than ` 100 crore in the infrastructure sector will get 15 per cent of investment allowance, according to the budget. This is a good move and we hope that large investors in wind generation will also opt for such an investment.”

The IWPA chairman hopes that adequate allocation for wind is made out of it, especially to finance small self consuming investors.

For companies like Mytrah Energy (India) Ltd, which have fared well, despite problems last year in the wind energy sector, this is a great boost.

Confesses Vikram Kailas, MD, Mytrah Energy (India) Limited, “This is sure

Sumant Sinha

Chairman & CEO, ReNew Power to encourage not only domestic investors but also foreign investors, who will recognise wind as a potential investment opportunity.”

Agreeing, Shruti Shukla adds, “India has consistently been in the top-five rankings for wind energy installations since 2004. It had a stellar year in 2011 (3019 MW). Subsequently in 2012, the industry was significantly impacted by the removal of AD and GBI and witnessed an over 22 per cent drop in installations. With the reintroduction and revision of the GBI, we once again see the prospect of rising investments in the wind sector in 2013 with the prospects of a full recovery by 2014. GBI will add to the attractiveness of the Indian wind market to both foreign and domestic investors, however, we look forward

to more clarity on how the scheme will be rolled out.”

WHERE TN STANDS

But there are concerns too which are likely to be raised, till this is approved by the Cabinet. As Sinha explains, “We do not have the details yet, as to whether the structure is the same or it will be different. Also, it needs to be approved by the Cabinet.

Moreover, what the wind sector needs to know is whether it is going to be reintroduced from April 1, 2012 onwards. That is something which we are not clear about, as yet.”

He believes that while some of the minor issues have been positively impacted, with the fiscal deficit going down and the RBI reducing interest rates, issues such as enforcement of RPO and tariffs in different states are pressing concerns for the wind industry. “As far as the wind industry in India is concerned, it all now depends on the tariff mechanism in states, the state DISCOMS and also the RPO enforcement.”

On the whole though, the move has been hailed even by those who are not a part of the wind industry. As Siddharth Malik, Managing Director, Megawatt Solutions Pvt. Ltd reasons, “The reintroduction of GBI in wind sector might have some impact on solar projects, given that each investment dollar has an opportunity cost.”

Adds Hemant Kanoria, chairman, DPSC Ltd, “This is a major incentive announcement for the RE sector.

The GBI reintroduction will help the sector in terms of motivation for installing additional capacity and reducing power deficit of the country.”

What of solar?

As far as the solar sector is concerned, status quo has been maintained, there being no customs duty on solar cells and modules, as has been demanded by domestic manufacturers, according to a report in Business Line. It adds that the Budget does not set apart any sum for providing ‘viability gap funding’ to the projects that would be set up under the Phase II of the Jawaharlal

Shubra Mohanka Director, Solid Solar

Nehru National Solar Mission. The plan of the Ministry of New and Renewable Energy (MNRE) was to engender creation of 750 MW of solar photo voltaic capacity in 2013-14 by providing viability gap funding.

Some like Shubhra Mohanka, Director, Solid Solar, feel that the Finance Minister could have supported the domestic solar industry by increasing the budget outlay for solar energy and imposing duties on import of solar products. “Currently, there is an inverted duty structure on solar products, meaning it is cheaper to import finished product than raw materials.”

According to Prof K Kasthoori Rangaian, Chairman, IWPA, in 201112, investment in the wind sector in India was 3,200 MW with an investment to the order of ` 19,200 crore. After the withdrawal of AD and GBI, investment in windmill installation fell.

“We had an installation of 1,200 MW up to end of Jan 2013. In fact, in 2012 -13, we may end up with a installation of 1400 MW, resulting in a loss of 1800 MW of installation and vanishing of ` 10,800 crore in investments.”

Now that ` 800 crore has been allocated to MNRE for GBI, it would be for the Group of Ministers (GOM) Finance, Power and MNRE to finalise modalities of providing GBI for wind investors. At such a meeting, the GOM may also have to bring back AD. In 2011 -12 out of 3200 MW, 1000 MW opted for GBI, the rest was through AD. “If the AD route, which is not a dole or a subsidy but only a deferral in collection of revenue for government is also brought back by GOM for plan period – (for which we, a 1,400 member investor strong wind power association will appeal for), possibly the growth in wind energy will be back on track.” Additionally, 2013-14 may see an installation of 4,000 MW and 5,000 MW in 2014-15. In fact, AD will enable small investors to get margin money for investment and all consumers like SSI will be back to investment in windmills.

Stressing on the significance of this sector, she adds, “Being a growing economy, India has very crucial March 2013 | Energy Next | 31

Budget 2013-14

Industry Speak

Vikram Kailas MD, Mytrah Energy

India plans to add 3,000 MW of capacity from wind, small hydro, biomass, industrial waste-to-energy and solar power plants in the year to March 2014, as per the budget documents

energy needs. With coal and oil becoming scarce and nuclear being dangerous, solar remains the only viable option for future. In the current stage of evolution, it requires huge support from government but there was virtually no mention of solar in this budget.”

cost of imported steam coal, which can impact the unit cost of electricity by up to 10 paise per unit. This does reinforce the business case for renewables in the long-term energy mix in the context of grid-parity, a measure of competitiveness of renewable energy.”

However, Malik is of the firm belief that solar is here to stay. “It is the cornerstone of long-term sustainability in the Indian economy.”

There is also a recommendation for low interest bearing funds being made available for renewables, which will be a key growth driver.

The larger call to state power utilities to implement prudent financial restructuring is significant too, since states eventually have to take a call on how aggressively

Favouring RE? Malik feels that the budget impact on renewables at large is interesting. “The hike in customs and countervailing duty will increase the 32 | Energy Next | March 2013

Prof. K. Kasthoori Rangaian

Chairman, Indian Wind Power Association they want to promote renewables.

Lastly, the rural sector has been in the limelight, which off-grid players in renewable industry can benefit from. Reacting to the power sector’s proposals, Kanoria states that the Finance Minister’s announcement in the Union Budget for 2013-14 to extend tax holiday up to March 2014 is a welcome move for the power sector, which has been facing many bottlenecks in recent past. “However, the announcement to impose 2 per cent customs duty on coal import is disappointing as many power projects in the country are suffering from fuel linkage issues” he laments.

Perspective

Anil Kakodkar

Q: The Solar Energy Corporation of India (SECI) has taken over from NTPC Vidyut Vyapar Nigam Ltd. (NVVN) as the nodal agency for JNNSM Phase-II. How does SECI plan to manage this enormous exercise?

A: SECI is a vehicle to implement the mission; you’ll have to look at a variety of options. Due to the strategy of competitive bidding and international market conditions, solar power is fast becoming competitive and expected to achieve grid parity. The question is how to accelerate the implementation of this programme in such a scenario and at the same time, do it in a manner that the implementation remains stable. In order to deliver energy in a competitive economic condition, it has to be at an optimum overall cost. This is something which needs constant evaluation – that is one part.

‘DCR is a saving grace for Indian manufacturing’ Eminent nuclear scientist and Chairperson of the Solar Energy Corporation of India, Dr Anil Kakodkar, in an interview to Sayantani De, shares his thoughts on the future of the country’s solar power industry and plans for indigenous development of solar technologies and components

The second part is, the bundling of power which was the route adopted earlier. We can still continue on that route wherever possible but we could reach a limit. The other incentive or driver is the regulators’ insistence on minimum renewable purchase obligation (RPO) on part of the discoms – some states are very aggressive and some are not. Yet, there is a third mechanism – we need to explore direct links with potential buyers. For example, there are people who buy merchant power which is expensive at times. We can’t control the time of the day when energy can be supplied, but there may be opportunities to still explore that way. There are renewable energy certificates as well – they have just begun and one has to wait and watch as to how it transforms. If that becomes an attractive option, it can become a potential route. There are different routes possible and as things unfold, we can explore more.

The other aspect is to address some of the key technology issues. For example, now there is possibility to connect solar power to grid even at a very low level of generation, like rooftop may be connected to the grid. Now the question is how to use that as a major incentive? There March 2013 | Energy Next | 33

Perspective

Anil Kakodkar

should be a decentralised investment in rooftop and even if it is used at household levels, that much power from the main electricity grid offsets.

Now, if we address all these technology issues, for example, we produce spcolar energy and integrate into the grid – this will again bring in the question of efficiency, do we have the most efficient conversion technology? There is the question of generating very large capacity of power through solar thermal.

Today, there is perception that solar thermal technology is very expensive.

So what needs to be done to bring that cost down? We may do some exercises in terms of developing and demonstrating technology of solar thermal, so that one can make sufficiently informed investment decisions. There are issues like domestic supply chain – we are quite weak in that.

There is a whole set of opportunities available based on the policy announcements by the governments – both central and state. There are different players and SECI is one of them, while we complete the assigned task, we also need to create some questions, on the basis of which we can work. We also need to develop a number of new products such as rooftops, mini-micro grids along with solar photovoltaic and may be hybrid PV that can deliver energy for a longer period of time – hybridised with wind or biomass. Developing solar lights can be another area – I personally believe developing niche areas like solar lights should be developed in rural areas where today most of people use kerosene that has a huge subsidy; making solar lights popular would help government save on kerosene subsidy as well as avoid use of kerosene there. One could do this in a manner so that you have good branded products, but at the same time it also serves as cottage industry – lot of people in villages will assemble them. With this, a new way of livelihood in villages can be created. There can be growth in agricultural pumping also – farmers find stand-alone solar 34 | Energy Next | March 2013

India has an industry for assembling and that is also in difficulty, primary manufacturing is hardly anything. That is a major challenge; there is a need to take a strategic view

power-driven pump disconnected from the grid attractive as compared to grid-power driven pump. The grid power is subsidised by the industrial consumers – they pay higher tariff so the agricultural consumers can get subsidy. If the proportion is brought down, the amount that industrial consumers have to subsidise out of their consumption would come down, which in turn would mean that the tariff would become cheaper. That actually is a big boost to the economy. I think paying extra attention to solardriven agricultural pumps to make them attractive makes immense sense, not only from the point of delivering energy for pumping but also making the whole economy healthy. The pumps used are AC pumps and solar energy produces DC power. Now the question is can we develop DC motors which are as cost-competitive as AC ones? In terms of efficiency, they’ll be always better. These are a few directions that will not only promote growth of solar energy but it will also create very substantial collateral benefits either in terms of savings on kerosene or making industries more efficient.

Q: What is the status of indigenously developed renewable energy technologies in India? What policy

measures have been taken to encourage them?

A: Unfortunately, as far as solar is concerned, today things are mostly imported which is not a good thing. The world of photovoltaic is over capacitated today; the costs are going down and dumping is taking place, it is creating fair bit of difficulty. India has some industry for assembling and they are also in difficulty, primary manufacturing is hardly anything – a few may be.

That is a major challenge; there is a need to take a strategic view. While setting up a solar manufacturing unit, on the face of it, it may appear that it may not become commercial because the cost of production is higher than the rates in which one can buy from outside. If it goes on like that, it makes us vulnerable to supply shortage. There are other technology challenges in terms of finding materials that may help enhancing reliability of solar and making it cheaper. Today, one should have enough capacity on solar cells, LED and glass for variety of purposes including other reflector materials for solar cells.

One way of addressing it is to getting the industry and R&D labs to work together and develop products on a competitive rate. If you just leave it

to industry then they get technology from somewhere, some industries do their own in-house R&D, but otherwise the technology becomes stale over the period of time and uncompetitive. If we do it purely in R&D lab, we can’t drive the way the industry can drive. It is better we create craftsmanship in the sense that development should be done with the help of both industry and laboratory. The government can also set up laboratory to carry out longterm development.

Q: The clause of domestic content requirement during the JNNSM Phase-I was criticised by industry and experts. Even internationally, such provisions have attracted adverse reactions from countries, prompting them to lodge complaints with WTO. Do you think DCR promotes protectionism and amounts to unfair trade practice?

A: In a situation where Indian manufacturing is suffering so much, I think domestic content requirement is a saving grace. The answer lies in creating capacity for those and insists on domestic content requirement so that you can protect that. We cannot take an extreme view of anything. If solar energy has to grow, you need investment and finance. We want Indian manufacturing industry to grow hand in hand, if not anything else, why should so much of value addition opportunities should be given to others, it should be here. If that has to be done, then you have to create conditions that the domestic manufacturing remains competitive; for some uncontrollable reasons, if that doesn’t remain competitive then there has to be some measures like giving preference to domestic sector.

I think it has to be a mixed basket – if you insist on one pattern, you’ll always have some difficulty or the other. If you say everything has to be domestically produced or supplied and if that doesn’t create any difficulty in accessing financial resources, it’s okay.

But if it doesn’t allow access to financial resources, then what good will happen?

The dynamics should be not to give away but to exercise optimisation.

Q: But financing renewable energy

projects, especially by Indian lenders such as banks and financial institutions remain a challenge.

A: They all see this as a ‘not-safeenough’ investment. There is priority sector lending; I think some of these should be brought under this. From the banks perspective, their risk perception about solar projects has to be minimised. We also need a lending mechanism where interest rates are low, repayment periods are long – there should be some such mechanism for developmental objectives. At this moment, we are not a player in solar large enough on an international level. Therefore, the solar business in India is subject to risks arriving from external parameters. We plan some business and then something happens in China and the whole business haywire.

Obviously, this makes lenders feel that this is risky. So it’s an egg-andchicken problem. On the other hand, you want solar energy in a big way,

that; we are in transition. In any case, we expect grid parity pretty soon; I think in another 3–5 years if solar can be brought into the domain of costcompetitiveness, the question of RPO will not arrive at all. The thrust should be to drive costs down, both by scale-up as well as technology and in doing that you have to cash in on the initiatives and opportunities.

We would like to benefit from RPO mechanism and I think government would do something about it. The state regulators should impose penalty for non-adherence to RPO; the point is that regulation has to be effective, but there may be state regulators who may not be as enthusiastic as others and may not put obligation at a reasonably higher level. Some have RPOs, some have solar specific SPOs – that is a part of the state policy. Certainly, there should be dialogue between central and state government on this. I would personally like to see as much

Public perception sees solar and nuclear in contradiction to each other and that is the whole problem why can’t we do things in a manner that helps in it, and avoid conditions like supply shortage; if that happens, the lenders will see it as risky.

Q: RPO implementation in India is in a shambles in a way due to the poor economic health of the state discoms among others. What do you think should be done to improve the situation?

A: That’s an action at the government level, purely. An example from nuclear can explain it probably – there was a time when everybody was criticising the nuclear projects as expensive and people were refusing to sign PPAs. I kept them aside and went on with the plants. The moment they completed, people came in for their power demand. In fact, several chief ministers called me at that time despite giving me letters refusing nuclear power. Solar, I think, is like

benefit derived out of this. However, the larger picture is, the gap is narrowing down –solar power can’t get subsidy in perpetuity, so why not hasten the process. Our objective is to have larger penetration of solar power. More targets as a result of solar policy at national and state level will ensure it as generation is a concurrent subject.

Q: One of the objectives of JNNSM Phase-II is to “encourage solar park cluster development”. How does the government plan to ensure the land required for these parks?

A: You have to find out required land depending on how many megawatts to be produced. But, it has to be done in a manner where it doesn’t get into conflict with other land requirements – agriculture, habitat and other developmental projects.

Rooftops are a good idea as well as March 2013 | Energy Next | 35

Perspective

Anil Kakodkar

using the land that comes under the barren and uncultivable segment.

Such lands away from cities and human habitat should be targeted for large capacity generation. But there is a technology challenge there –if that land happens to be in desert or in mountains, then the technology should be fit to survive the environment there and that’s what I meant when I said creating products.

I have myself started working on such products but it will take time.

Q: Rooftops, as you said, are a good option and are said to have immense potential. What is the reason that they are yet to take off in a big way in India?

A: It is taking off, certainly. So far, there was the issue of grid connection – normally unless the installation is larger than a particular capacity, it was not possible to connect to the grid.

But now, there are changes in the offing where even smaller capacity rooftop generation can be connected.

Once that becomes possible, it will of immense help. It is a cost-effective solution and should become more popular in coming days. For large installations such as workshops, the tariff may at times depends on the connected load. The electricity consumption may be actually much lower, but since my connected load is higher, the cost increases. If there is a solar rooftop installation, one can cut down or add the amount of connected load as required and will hardly require depending on the grid for power and save a substantial part of tariff as well. There are instances where the investment was paid off in two years.

I am sure that such niche areas will definitely grow.

36 | Energy Next | March 2013

Q: The policy document for Phase-II has a provision for solar resource monitoring and assessment, do you think India has adequate expertise in finding out right places for projects?

A: On a macro scale, if one-fourth of the total barren and uncultivable land away from the human habitat is devoted to solar, it can generate enough power to meet India’s demand in 2050. It requires a proper planning – the grid has to transport power and other related issues have to be taken care of – all that investment has to be made. It may become an issue like inter-connecting of rivers.

You have to build the infrastructure suitable for it– when large-scale capacity addition is planned; one has to take care of these. Whoever is in the business of grid has to run it in a way which is viable. Now if there are grid issues in areas where wind energy is generated, one has to see if the wind farms are able to give the grid a viable business. It has to be checked whether only wind is sufficient or a combination of sources is required.

Q: Does your expertise in nuclear technologies align with your current responsibilities as SECI chairman?

A: I am an energy person and if you take a long-term view of the energy scenario in India, nuclear and solar are the only two sources which can supply electricity at a level that India would require. Today the consumption is at 700-800 units per capita; if you look at the Human Development Index (HDI) vis-à-vis per capita consumption of electricity, it sharply rises and then plateaus –

that transition is of around 5000 kWh, which means that if you want to get at the highest HDI, you have to reach that electricity supply, at least. The average consumption of OECD countries is at 10000 kWh while developed countries have 15000 – 20000 kWh consumption.

If India is to become an economic superpower, it has to increase the energy supply. That, coupled with India’s growing population, corresponds to ten times the electricity we produce today.

The incremental energy that we would require in coming days will correspond to 40 per cent of global electricity supply today.

In the context of the huge energy challenge, nuclear and solar are the only sources which have some substance, although other sources should be tapped as well. I think most of them are living in a fantasy world, they are not realising the challenge. Nuclear, as it is today with Uranium, is not going to meet the requirement coming up and elements like uranium and thorium have to be recycled. Solar energy is also in that category, it can address the challenge, provided the right technologies are developed. This sector’s rapid growth is going on due to policy and market push; I would also like to ride on that momentum.

The focus has to be to drive it in terms of technology which is appropriate and relevant to India.

Public perception sees solar and nuclear in contradiction to each other and that is the whole problem. Both are clean energies, but they come from two different ideologies, mainly from social activists’ perspective. Any technology produces waste and therefore comes with waste disposal mechanisms; nuclear radioactive waste decays while that produced by solar manufacturing doesn’t. As the segment is yet to develop in India, we have to find out suitable mechanism for waste disposal. Regulations must be proper and if people don’t adhere to them, they should be forced to follow the rules along with strict monitoring and imposition of penalty for violations.

Solar Trade War

PV Tech

The curious case of The US complaint to the WTO over India’s domestic content condition in its National Solar Mission not only shows signs of rising trade tensions between the two countries, but also highlights the increasing importance of renewable energy as the new battleground in global trade. Dr PC Maithani explains why India should leave no stone unturned in its fight to win the case

DCR and US grouse I

ndia is in the process of finalising the contours of the second phase of its Jawaharlal Nehru National Solar Mission (JNNSM). According to the draft policy document posted on the website of the Ministry of New and Renewable Energy (MNRE), “National Solar Mission envisages installation of around 10 GW utility scale and 1 GW off-grid solar power projects by the end Phase-II. … It is envisaged that out of this 10 GW target, 4 GW would be developed under central scheme and 6 GW under various State specific schemes.”

The 10 GW target will create market and economic opportunities of the order of Rs 80,000 crore or around US$ 16 billion, as per broad estimates.

The current manufacturing capacity of the country is only of 15MW ingots and wafers, 850 MW solar cells and around 2000 MW modules.

Even if we assume that the entire quantity of modules required would be domestically manufactured, considering that approximately 60 per cent of the cost is on account of wafers /ingots, and only 7 GW target is met through solar PV route, the import bill would be of nearly US $7 billion.

One of the important objectives of JNNSM is to promote local manufacturing. So, the developers are expected to procure their project components from domestic manufacturers, as far as possible.

March 2013 | Energy Next | 37

Solar Trade War

PV Tech provide less favorable treatment to imported solar cells and solar modules than that accorded to like products originating in India; Article 2.1 of the TRIMs Agreement because the measures appear to be trade-related investment measures inconsistent with Article III of the GATT 1994; Articles 3.1(b) and 3.2 of the SCM Agreement ( read Subsidies and Countervailing Measures) because the measures appear to provide a subsidy contingent upon the use of domestic over imported goods; and

During Phase-I of the Mission, the domestic content requirement (DCR) condition that projects based on crystalline silicon (c-Si) PV technology should use modules manufactured in India, was comfortably bypassed through thin film solar cell imports.

The US companies had a major market share in JNNSM Phase-I. Thin-film PV technologies, mostly First Solar cadmium telluride PV, comprise the majority of US exports to India. Around two-third of the panels installed in India is thin-film, while globally its share is in the range of 10-15 per cent.

The US Exim Bank and the Overseas Private Investment Corporation (OPIC) offer low rates of interest (about 3 per cent) and a long repayment schedule (of up to 18 years) to Indian solar project developers, provided they buy thin-film panels manufactured by US companies. This has distorted the market completely in favour of US companies. Such protective and promotional measures of the US, coupled with low-priced Chinese solar cells have led to the forced closure of almost the entire domestic solar industry.

The United States, on 6 February 2013, notified the World Trade Organization (WTO) Secretariat of a request for consultations with 38 | Energy Next | March 2013

Achieving indigenous manufacturing in solar in particular and renewable energy in general is of strategic importance for our country India on certain measures related to domestic content requirements for solar cells and solar modules under the Jawaharlal Nehru National Solar Mission.

In a typically American move, the present petition in WTO is preemptive in nature, eyeing the country’s own business interests and chasing markets and profits.

US contention The US request for consultation says: “… it appears India requires solar power developers, or their successors in contract, to purchase and use solar cells and solar modules of domestic origin in order to participate in the NSM … India’s measures appear to be inconsistent with: Article III: 4 of the GATT 1994 because the measures appear to

Articles 5(c), 6.3(a), and 6.3(c) of the SCM Agreement because the measures appear to cause serious prejudice to the interests of the United States through displacement or impedance of imports of U.S. solar cells and solar modules into India and through lost sales of U.S. solar cells and solar modules in India.

As India has not appropriately notified these measures, India appears to have failed to comply with Article 25 of the SCM Agreement.

India’s measures also appear to nullify or impair the benefits accruing to the United States directly or indirectly under the cited agreements.”

DCR: Bone of contention India has been a WTO member since 1 January 1995. As per the WTO charter, the request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation. If this doesn’t work even fail after 60 days of consultations, the complainant may request adjudication by a panel. The point in question is that a country should not discriminate between its trading partners and between its home-grown and foreign-made products, services or nationals. Further, foreign companies, investors and governments should be certain that trade barriers should not be raised arbitrarily. For, a stable trade environment encourages investment, and hence creates opportunities for

employment, and consumers can fully enjoy the benefits of competition in terms of choice as well as lower prices.

The competition for increased renewable energy market share has resulted in a number of trade disputes.

Over the years, policy initiatives have spurred renewable energy growth in many countries, including India – JNNSM is one of the examples. In fact economic activity linked with manufacturing of renewable energy systems and components, and associated spillovers such as local employment, etc. are becoming increasingly important components for policymakers. At the same time, this has become an increasingly contentious issue at the international level. In the recent past, trade disputes were witnessed between the United States and China over solar PV, and Japan and Canada for renewable energy support policies.

US manufacturers contended that allowing Chinese companies to produce and sell products at artificially low prices and dump them on the US market is a challenge to US manufacturers. Consequently, it became very difficult to keep their production cost-competitive with cheap Chinese imports. Solar manufacturing company Solyndra’s bankruptcy is primarily attributed to cheap Chinese imports. This led to the imposition of tariffs on Chinese solar PV and also the creation of a trade enforcement unit to protect domestic manufacturers.

So, with faster growth of renewables, there will be more money at stake and more disputes to deal with.

Providing support to the domestic renewable energy industry is not an isolated case. Around the world, many countries have been doing the same.

Some examples are enumerated below: In 2009, the Canadian province of Ontario introduced a rule that its generous feed-in tariff for solar PV projects of more than 10kW would only be available for developers using modules with at least 50 per cent of their cost based on local goods and

services. With effect from 1 January 2011, that proportion has gone up to 60 per cent.

The first country to use local content rules to tilt the playing field in renewables was China. Soon after the introduction of its first renewable energy law in 2005, it demanded that a certain proportion of the value-add of wind turbines had to be produced in China in order for them to qualify for the national wind tender programme. At one point in 2007, the local requirement reached 70 per cent.

The renewable energy programmes supported by governments are not going to go away anytime soon, but the outcome of international disputes could significantly affect the tools they have at their disposal for promoting their countries’ renewable energy sectors

In Brazil, the Proinfa wind feed-in tariff programme, which was replaced last year by a tendering system, also stipulated 70 per cent local content, but the requirement was later dropped - at least for 1.5MW-plus turbines, after it became clear that the capacity of the local factory was not sufficient to meet the programme target.

Procurement of photovoltaic devices for defense purposes in US is covered under Buy American Act, i.e. local manufacturing condition, with certain exceptions.

Market access When one country allows another country’s entity to do business in its own territory on equal terms, it is called market access. Reserving the entire or certain percentage of market to domestic entities (or to the entities from favoured nations) amounts to restricting market access or putting trade barriers. In the case of renewables, the market access issue has become pertinent for two reasons: a) fast growing deployment; b) unilateral flow of products and services from technologically superior countries.

From the national perspective, the domestic content condition is justified on many counts. The Indian solar industry is lacking in terms of a complete value chain and almost the entire demand for solar cells is met through imports. Lack of levelplaying field with competing nations March 2013 | Energy Next | 39

Solar Trade War

PV Tech

on account of their subsidies and other incentives and also several domestic disadvantages such as high cost of finance and power, infrastructure bottlenecks, etc. have compounded the problem of solar cell manufacturing in the country.

Besides, inadequate investments in this vital sector, as there is no protection from imports in the form of import duties has rendered the country unable to match the incentives offered - both direct and indirect, by other countries. As a result, the solar cell technology, its huge potential notwithstanding, has become more or less a moduleassembling sector with little value addition at the domestic level.

India’s likely position India is not a signatory to the Government Procurement Agreement (GPA) of WTO. India’s WTO member status alone does not prevent incentives being provided to government procurement. JNNSM is a government policy-driven programme and contains very high levels of government subsidies.

Assuming an additional expenditure of `3 per kilowatt incurred on procuring solar electricity, over and above the marginal cost of the baseline electricity, the government is incurring an additional expenditure of around `500 crore per year for each 1 GW installation. Providing such a high level of support without any 40 | Energy Next | March 2013

measure for creating an indigenous manufacturing eco-system cannot be justified.

The JNNSM is in fact seen as an opportunity to develop the domestic manufacturing base for the entire solar cell value chain.

The domestic content condition provides equal opportunities to both national and international developers for investment in setting up manufacturing units. Therefore, it is aimed at acquisition, gaining expertise, diffusion and indigenisation and absorption of knowledge, technology and skills by local actors in India.

Achieving indigenous manufacturing in solar in particular and renewable energy in general is of strategic importance for our country. Lessons from JNNSM Phase-I suggest that conditionalities for deployment systems and devices (read domestic content) alone cannot boost manufacturing in India. There are lessons within the country itself.

The electronics industry is a case in point where initial efforts to create an infrastructure for manufacturing failed and according to some projections electronics import alone could soon rival the crude oil import bill. Given the surge in expectations from the renewables industry, a situation similar to electronics industry could be witnessed unless there’s proactive action on the government’s part.

Steering a course The renewable energy programmes supported by governments are not going to go away anytime soon, but the outcome of these international disputes could significantly affect the tools they have at their disposal for promoting their countries’ renewable energy sectors. However, in a country like India, which is strategically placed with both demand and supply of renewable energy co-existing, all we need is to concentrate on the big picture. And one of the most significant efforts required would be to design an innovative policy that can support the industry directly and substantially to reduce input and other transaction costs and encourage the development of knowledge, skills and entrepreneurial resources while having an eye on the global market instead of just catering to the domestic market. To make this possible, we should first get our priorities right, not only in terms of our targets for attaining the necessary deployment levels, but there also needs to be a balance between support towards deployment and manufacturing. It is logical for the country to support the development of domestic manufacturing capacity in solar technology hand in hand with market creation.

There is another dimension to the whole issue that demands attention. The duty structure of the components that go into the manufacturing of solar cells and modules is higher than the final product, i.e., solar cell and modules.

It makes solar PV manufacturing unattractive in India. Such a situation needs to be reversed.

In any case, India cannot afford to risk the fallout of the US trade complaint over its national solar programme. So it would be in the nation’s best interests to fight and win the case and retain its domestic content condition.

The author is Director, Ministry of New and Renewable Energy The views expressed by the author are personal

Reality Check

Wind Potential

you consider all of the real-world constraints,” Keith said. “The real punch line is if you can’t get much more than half a watt out, and you accept that you can’t put them everywhere, then you may start to reach a limit that matters.”

Research contests generation at large wind farms New findings suggest the potential for wind energy could be a lot less than previously thought

(Source: Harvard School of Engineering and Applied Sciences)

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arge-scale wind farms have played a crucial role in scaling up wind energy potential across the globe. However, a new study by a Harvard physicist contests the idea that the generating capacity of wind farms is directly proportionate to its size.

Harvard applied physicist David Keith’s research shows that the generating capacity of wind power installations which are larger than 100 square kilometres may peak at between 0.5 and 1 watt per square meter.

However, previous estimates had put that figure at between 2 and 7 watts per square meter as they ignored the turbines’ slowing effect on the wind.

The latest research conducted on the basis of mesoscale atmospheric modelling and published in the journal Environmental Research Letters says that each wind turbine creates a “wind shadow” behind it where the air slows down by drag on the turbine’s blades.

An ideal wind farm accommodates as many turbines as possible while maintaining the space among them, enough to reduce the impact of these shadows. As the farms grow larger, the blades start interacting. “If wind power’s going to make a contribution to global energy requirements that’s serious, 10 or 20 per cent or more, then it really has to

contribute on the scale of terawatts in the next half-century or less,” Keith said.

Co-author Amanda S. Adams, assistant professor of geography and Earth sciences at the University of North Carolina at Charlotte said, “One of the inherent challenges of wind energy is that as soon as you start to develop wind farms and harvest the resource, you change the resource, making it difficult to assess what’s really available.”

He said if the entire Earth is covered with wind farms, “the system could potentially generate enormous amounts of power, well in excess of 100 terawatts, but at that point my guess, based on our climate modelling, is that the effect of that on global winds, and therefore on climate, would be severe – perhaps bigger than the impact of doubling CO2”, adding: “Our findings don’t mean that we shouldn’t pursue wind power, but these geophysical limits may be meaningful if we really want to scale wind power up to supply a third, let’s say, of our primary energy.”

“It’s clear the theoretical upper limit to wind power is huge, if you don’t care about the impact of covering the world with wind turbines. What’s not clear is that what is the practical limit to wind power would be if

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March 2013 | Energy Next | 41

Green Tracks

DMRC

Bombardier coach being used by DMRC (Photo: Bombardier)

Aiming quality service with less energy The Delhi Metro Rail Corporation is contributing big time to electricity-saving efforts in the city by undertaking a number of initiatives. Besides, it has plans of adopting solar energy in order to minimise dependence on the existing power supply mechanism. Sayantani De brings you the details 42 | Energy Next | March 2013

T

here was a time when travelling in Delhi used to be a nightmarish experience with irregular, crowded buses and wayward autorickshaw-wallahs ruling the roads. But as the millennium dawned, the city witnessed a drastic development in its public transport system with the advent of Metro, a world-class service for the capital of a country which is poised to become an economic superpower.

All through its journey in the past 11 years, the Delhi Metro Rail Corporation (DMRC) has been lauded for many firsts and brining in innovations in its day-to-day operations. Not only that, those seemingly unending traffic snarls are no longer a common sight, on Delhi’s roads and a lot can be attributed to the Metro service. It has made travel safer for the city’s women also. However, a much bigger credit probably lies in its efforts to reduce energy needs and being environmentfriendly – Delhi Metro is the first Railway project in the world to be registered for carbon credits by the United Nations Framework Convention on Climate Change (UNFCCC).

Energy-saving initiatives For an energy-intensive sector like the railways, reducing energy consumption is a huge challenge, considering that all aspects of operation of running of trains, air conditioning of underground stations, lighting of stations, lifts, escalators, etc. require heavy electric energy usage. “While traction for train operations accounts for 55 per cent of our total energy consumption, the rest is required for other aspects such as air conditioning and ventilation in stations,” Satish Kumar, Director (Electrical), DMRC tells Energy Next.

It was an innovative energy recovery mechanism that generated energy even as the trains prepare to halt at the stations. Termed as the regenerative braking process for which DMRC earned carbon credits, as trains apply brakes, traction motors install ed on these trains act as generators to produce electrical energy that is fed into the Over Head Electricity (OHE) lines. This regenerated electrical energy supplied to the OHE is used by

Rail yard rooftop potential up to 2.5 MW (Photo: ComSolar, GIZ India)

The regenerative braking process allows DMRC to produce 3035 per cent of power that contributes to our energy-saving initiatives other accelerating trains in the same service line, therefore saving overall energy consumption during train operations.

“The regenerative braking process allows DMRC to produce 30-35 per cent of power that contributes to our energy-saving initiatives as well,” Kumar says, adding that a host of careful measures taken by the mass rapid transit connoisseur has been effective in bringing energy efficiency in its day-to-day operations. The train coaches, supplied by Bombardier, also play an important role in reducing energy requirements of DMRC – the lightweight coaches made of stainless steel require far less power to operate.

While other coaches consume 80 units of electricity, DMRC coaches require around 50 units of power to run.

The modern, high-capacity MOVIA vehicles by Bombardier are designed to accommodate 1,480 passengers per four-car train set which can be increased to 2,220 passengers per six-car set and 2,960 passengers per eight-car set. Some of the key features

of the trains are its sustainability and eco-friendliness of the technologies used – the MITRAC propulsion system with regenerative braking which creates up to 30 per cent in energysavings.

Delhi Metro is also a member of the NOVA group of Metros, a programme of international railway benchmarking that comprises many international small to medium-sized Metros across the world and strives to maintain world-class services. “The main efficiency measure is installation of energy- efficient VRV (variable refrigerant volume) type chillers in Phase-II, whereas in Phase-I, Split Chillers were installed. The energy efficiency project also involves other measures to improve energy efficiency through efficient lighting system and more efficient building architecture, resulting in maximum utilisation of daylight and reduction in cooling requirement. The project also contributes to sustainable development for the well-being of the country in terms of environment, socio-economic benefits. Since the project is more energy-efficient as compared to Phase-I of Delhi Metro, it consumes less electricity and thus results in reduction of carbon dioxide emissions,” the organisation states.

“The DMRC saved 1, 12,500 megawatt hours of power generation by restricting and reusing power on its trains through regenerative braking, thus saving the emission of 90,004 tonnes of carbon dioxide into the atmosphere from 2004 to 2007. It is estimated that in 2008, 39,000 tonnes March 2013 | Energy Next | 43

Green Tracks

DMRC

Moreover, there are advantages for DMRC of going solar. “Diversification of energy supply and revenue sources, attractive investment, long-term hedging of electricity supply costs and environmental benefits” are some of them, according to Herzog.

Solar panels at the terrace of DMRC office in Connaught Place, New Delhi.

(Photo: DMRC)

of CO2 were prevented from being emitted and this figure will increase to over 100,000 tonnes per year once Phase-II of the Metro project is fully operational. DMRC can claim 400,000 carbon credits for a 10-year crediting period beginning December 2007 when the project was registered by the UNFCCC,” a statement by the organisation says.

Various energy-saving measures at the Metro stations too are crucial in implementing energy efficiency measures. Sensor-powered escalators, chiller systems to maintain a comfortable temperature at underground station and constant monitoring of facilities are some of them. In a pilot project at Naraina Metro station, Delhi Metro aims to reduce energy consumption by 15-20 per cent by using a thermal energy storage system that will chill water overnight, when power rates are low, and use it during the day to cool the underground station.

Adopting solar energy As a means to minimise its dependence on the existing power supply mechanism, DMRC plans to adopt solar energy. While the Metro Bhawan – the main office building of the organisation at the heart of New Delhi houses a 2kw solar plant on its terrace, plans are on to install solar panels in Metro stations apart from those already installed at the parking areas. In collaboration with GIZ, it is exploring more opportunities to 44 | Energy Next | March 2013

harness the sun power. After detailed study of the sites such as Indraprastha station, Yamuna Bank yard and Karkardooma station, it was found that the stations and yards of DMRC offer huge open spaces which can be utilised for solar PV systems with a capacity between 90 to 2.500 kWp, thereby generating 400 to 10.000 kWh of electricity daily. The total potential for generation capacity of PV systems on all existing and planned DMRC sites (Phase-I, II and III completed) would be around 52 MW, equaling annual potential emissions savings of around 60,000 ton CO2 equivalent.

“GIZ is supporting pilot PV rooftop projects as a facilitator. It conducted a feasibility study, prepares the initial detailed project report, including suitable business scenarios for DMRC and will support execution of the first three pilot projects with an estimated potential of 2.5 MWp. Based on the results of the pilot projects, DMRC will decide on its further solar strategy – one option would be to equip all new DMRC overground stations with PV systems,” Timon Herzog, Technical Expert, ComSolar Project, GIZ India, tells Energy Next. “…generating all the electricity needed for operation of the Metro system is not intended. The electricity generated on the roofs of the various DMRC sites can contribute to cover the load of the stations but as well be sold to the grid. The final solution will depend on the results of the techno-commercial optimisation,” he adds.

Financially, the most attractive option for DMRC would be of feeding the generated electricity to the grid; leasing of roof space, advertisement and e-vehicle charging were also identified as potential models, according to ComSolar, which adds that another lucrative option for DMRC can evolve under the Renewable Energy Certificates mechanism (REC), a market-based instrument to promote power from renewable energy sources.

Building it green Green building is another area where DMRC has been focusing in recent years. The main office of the Delhi Metro is an 11-storey tall edifice with a number of relevant technologies and sufficient exposure to natural light.

All the lighting fittings at the Metro Bhawan are intelligent fixtures with built-in sensors that automatically gauge the amount of sunlight available in the room and adjusts the brightness on a scale of 3 to 100. Besides, they are sensitive to the occupants in the room as well and automatically switch off when the room is empty. The orientation of the building towards north and south helps cut down temperature, while keeping glazed windows under shades further cools the interiors, and installation of extra sunshades of lightweight stainless steel creates a protective girth around the north-south perimeter of the complex.

The DMRC building also has rainwater harvesting system.

The magnificent HUDA City Centre station in Gurgaon is the first green station of the Delhi Metro Rail Corporation (DMRC), with Green Rating for Integrated Habitat Assessment (GRIHA) certification.

The design of the building helps in exploiting climatic factors like wind loads, use of solar energy and air movement patterns besides ample natural light that minimises the use of electricity for lighting purposes.

Wind of Change

Repowering

Breathing new life

into old wind turbines

With most of the high wind sites currently occupied by low capacity turbines, India has a good potential for repowering with higher capacity turbines to increase yield; however, to make this possible, favourable policy guidelines are needed, writes Upendra Singh

W

ind energy, considered as an efficient and reliable source of clean power, has completed more than two decades of its existence in India, and is ready to go to the next level. During these years, the wind power industry in the country has undergone many changes – from being a clean alternative energy to becoming a potential player in the efforts towards realising the goal of having 15 per cent renewables in the country’s total energy mix by 2020, under the National Action

Plan on Climate Change (NAPCC).

With time, several new and more efficient technologies arrived on the scene, giving rise to a lucrative opportunity called ‘repowering’ – of old wind turbines for better output.

The term ‘repowering’ in wind energy primarily refers to the measures taken to increase the productivity of the older machines. The purpose is to efficiently enhance the operations of existing wind farms, built more than a decade ago, by adopting modern and improved

technology. Repowering has been in practice for almost two decades, and since 2003, the market for repowering got boosted primarily in Denmark, Germany, the Netherlands, the UK and the US. However, the industry has not been able to gain as much steam as it should have by now.

Benefits Repowering not only steps up the efficiency of an older wind farm, but presents with a host of other benefits March 2013 | Energy Next | 45

Wind of Change

Repowering

also, which makes it even more desirable. Besides replacement of older and outdated wind turbines with high-performance modern turbines, repowering also leads to streamlining wind farm locations and addressing the land requirement issues for newer machines to an extent.

Explaining the benefits of the concept of repowering, DV Giri, Secretary General of Indian Wind Turbine Manufacturers Association (IWTMA), says, “Land is a finite source and we need to maximise generation. Repowering is a must to replace not so efficient turbines which have served beyond 10 to 15 years with efficient and larger turbines with higher hub heights and larger rotor diameter.”

With good operating conditions and maintenance, the second-hand plant could work for more than 10 years.

At the same time, there would be no need to set up new evacuation lines for repowered plants as in case of new machines installed at a new site.

The replacement of old wind turbines with modern turbines leads to improvement in the capacity utilisation factor (CUF) and reduction in the operation and maintenance (O&M) costs.

Repowering in India The development of wind energy in India began way back in 1986, but it was only miniscule before the sector picked up in the 1990s. Today, India is among the leading nations of the world in wind turbine installations. As far as repowering is concerned, India provides huge opportunity, as many of the country’s best wind sites are occupied by low-capacity wind turbines that were installed more than a decade ago. The World Institute of Sustainable Energy (WISE), in its report for the Ministry of New and Renewable Energy (MNRE), estimated India’s repowering potential to be around 2760 MW, which means old wind turbines worth 1380 MW could be repowered to achieve 2760 MW capacity.

There have been a few instances of repowering in India, but the idea is still in its infancy. Commenting over the 46 | Energy Next | March 2013

Disposal of old turbines is a major issue which might have an impact on the environment. This can, however, be turned into an advantage by selling the old turbines to countries where the wind sector is in initial stages prospects of repowering in India, Alok Srivastava, Joint Secretary, MNRE, says, “Repowering is a good way to enhance the energy output of older turbines by replacing them with new and modern machines. Many wind farms, especially in Southern Indian states, present the opportunity for repowering. However, there are a number of issues that need to be addressed. Some are technological issues while some have financial implications.”

Challenges and the way ahead Despite presenting a profitable opportunity for worn-out windmills, in India, repowering is faced with several challenges, one of the major being the reluctance on the part of the windmill owners who had erected the machines to garner tax benefits. Other issues like multiple owners of a single site, the existing power purchase agreements (PPAs), reluctance in investing more money for advanced machines, and various legal and technical problems have acted as barriers. “Repowering has its own challenge in terms of willingness of the existing owner to give up the land, evacuation facility to accommodate the larger turbines and willingness of the DISCOMs to enter into a new PPA with current feed-in-tariff,” explains Giri.

Disposal of old turbines is another major issue which might have an impact on the environment. This can, however, be turned into an advantage by selling the old turbines to countries where the wind sector is in initial stages or where low capacity turbines could come in handy for start-up wind power projects at low costs. Giri says India could consider exporting them to SAARC, Latin America and South African countries that are on start-up programmes of Class I and II turbines falling between the 250 KW to 500 KW range.

Experts feel that other than technical issues, one of the major roadblocks for the repowering industry in India is the lack of incentives and policy guidelines. As a result, the industry has approached the MNRE for a policy on repowering.

One of the states with ample opportunity for repowering is Tamil Nadu, the leader in wind power installations in the country. It has several sites with sub-megawatt turbines that were installed 10-15 years ago with low hub heights. DV Giri suggests that the state could be an ideal place to initiate a pilot project, with the land mostly privately held.

“Tamil Nadu will be the best state to initiate a pilot project for repowering, say for 300 to 500 MW as cooperative wind farming with multiple stakeholders which would include the land owners who are giving up their land and their old turbines,” he says.

It’s high time for the country to get its energy policy right with the twin challenges of energy security and climate change looming large. The Indian industry could take heart from the fact that MNRE is in the process of developing an exclusively policy for the repowering business. “The power purchase agreements (PPAs) that were signed for a span of 20 years or more have to be given a closure before going for repowering. Keeping all these issues in mind, the MNRE is in the process of coming out with guidelines on repowering,” says Alok Srivastava.

Hopefully, the proposed policy on repowering would bring about a significant change in the Indian wind energy landscape by refurbishing its older wind farms.

Energy & Development

DSDS 2013

RE, the driving force

W

hen Nobel Laureate Carlo Rubbia, Scientific Director, Institute for Advanced Sustainability Studies, Germany, said at the DSDS that “just like nuclear energy, renewable energy is also forever”, he was probably voicing what the world has largely come to believe and accept.

Prior to the event, at a media colloquium, addressing a group of journalists, Dr Jonathon Porritt, Founder Director & Trustee, Forum for the Future said, “What we need is more value from less inputs. Also, we must use resources more efficiently.

The demand for food is growing and the challenge is to meet that in the times to come. Since RE touches

It witnessed a number of deliberations and in the process, myriad issues were raised on the consequences of climate change. Conclusively though, what emerged from these talks was that clean and renewable energy is becoming an inevitable part of our lives.

Sapna Gopal reports on the three-day summit held in New Delhi recently

The theme for next year’s DSDS meet in Feb 2014 will be “Attaining energy, water and food security for all” every single aspect of our lives and makes good business sense, why can’t businesses take it up?”

Some of the other issues raised were the conflict over resources, how we can garner electricity in an economy which is coal based and how coal mining is now a huge issue. Global challenges in the energy sector also came up for discussion. While North China has now run out of water for coal mines, in the US, President

Obama has come up with a clean energy agenda. But how much of it translates into action, remains to be seen, the experts Dr Jonathon Porritt and Dr R K Pachauri added. While Porritt stated that some economies were entirely dependent on diesel fuel, Pachauri added that doing away with diesel subsidies could be a possible solution to the problem.

Stressing that knowledge and information should be the driving March 2013 | Energy Next | 47

Energy & Development

DSDS 2013

force for action, Pachauri said that the World Bank is now focusing on RE and energy efficiency. For instance, Philipines has more or less become energy secure, since it has become a RE resource. Biomass is producing power from forest and agriculture waste.

While the duo agreed that pricing is important, the mindsets needed to be changed as well. “Coal is the most problematic fossil fuel. Japan is four to five time more energy efficient than China. Thus, China needs to think about energy consumption.

At a time of recession, one needs to innovate, about RE and its applications.”

Dr Pachauri informed that TERI had initiated a programme with China which will focus on low carbon development and GDP growth.

Stressing on sustainability At the 10th World CEO Sustainability Summit, 2013, on the theme, “Resource revolution: a global imperative and how businesses can shape it”, Arun Maira, a member of the Planning Commission, spoke on how businesses should be about winning the trust of people.

In his inaugural address, Minister for New and Renewable Energy, Dr Farooq Abdullah said that as of now, India’s biggest challenge is energy. “Our own energy is possible only if we look at RE. Fossils have created problems for all of us. Thus, we need sustainable energy. “ Stating that man has created tragedy for this Earth, he spoke on the need for energy for all. “First it was 8 billion, now it is 48 Billion. So, the expenditure has gone up on an annual and yearly basis.”

The JNNSM was launched in 2010 and by the end of 2013, we are likely to generate 1,300 MW of solar energy. He informed that through JNNSM, 4,000 to 10,000 MW of power had been generated. He assured that prices will come down further. “We need to create a hub for this energy,” he stressed.

The challenge for us now is how do we store energy for a longer time? As of now, of the 26,000 MW of power, over 18,000 MW is from wind. We have 60 48 | Energy Next | March 2013

From Left to Right: TERI Director-General Dr RK Pachauri, Indian Minister of State for Environment and Forests Jayanthi Natarajan, Guyana’s President Donald Ramotar, Prime Minister of India Dr Manmohan Singh, President of Kiribati Anote Tong and Indian Minister for New and Renewable Energy Dr Farooq Abdullah, and Chairman Governing Counsel TERI Arcot Ramachandran, at the launch of the 13th DSDS, organised by TERI at the Taj Palace Hotel in New Delhi

There is a huge gap between demand and supply. We need to increase power supply by 3 to 4 times and heighten electricity generation. Apart from R&D, purchasing and service recycling, we need to look at the entire value chain.”

Nobel Laureate Carlo Rubbia at the meet

stations, we intend to have another 50 stations in a year, so we know the sun/ wind intensity, he added.

On the issues that the RE sector faced, with regards to finance, he admitted that there have been problems with banking, since they are not sure if energy is workable.

He also spoke on Ecovision, an initiative of the company, which focuses on people, planet and profits. Sahay added that in India, there is work on solar, solar and LED and in the case of Tamil Nadu, street lighting. “We are also working on lighting controls such as dim lights and occupancy sensors. He stressed on the need for energy efficiency and clean solutions.”

A lot remains to be done and it is on your (the people’s) shoulders, he mentioned. On the occasion, two reports were released, one on the electric vehicles in India and the other on power for the planet, sustainability development in the power sector.

Rakesh Bhargava of Shree Cement spoke on energy efficiency in power plants and said that fly ash generated from power plants is used to produce cement. Prosanto Pal of TERI revealed how industrial energy efficient solutions are offered by TERI. “We need to tap the energy saving potential. It is 5 to 15 per cent in large scale industries and 20 to 50 per cent in MSM enterprises.”

Energy efficiency At one of the sessions on “The Why and How of Mainstreaming Energy Sustainability”, Nirupam Sahay, Lighting, Philips India, said, “India is the sixth largest consumer of energy.

TERI, he added, has detailed energy audits and energy assessment of the industrial sectors. “We have also undertaken international ventures such as those in Africa, Indonesia, Malaysia, Singapore and Maldives.”

Citing the instance of Seychelles, he said, “They have realized that they need energy which they can call their own.”

RE and the challenges Notable among the discussions was the one thrown up by Nobel Laureate Carlo Rubbia, Scientific Director, Institute for Advanced Sustainability Studies, Germany, who said that natural gas is a fuel for the future. The RE sector, be it sun, wind or biomass, it has made remarkable progress, but the question is, will it be able to bridge the gap?

The Summit saw representation from Bhutan, Guyana, Pakistan, Congo, Nigeria, France, Switzerland, Sweden, Maldives, Norway, Poland, Quebec, UAE, Denmark, Phillipines, Canada, Belgium, Kiribati, Seychelles, Indonesia, Japan, Mexico, Djibouti, Cape Verde, Ethiopia, Australia, the UK, the US and India, besides distinguished thought leaders

Elaborating on the challenges of RE, he said, “Firstly, the cost problem needs to be tackled, also, it has to be reduced. Also, it should be available, whenever needed. In other words, energy should be available when it is needed and not where it is generated.

Elaborating on CSP, he added that it is a fundamental step forward. “Solar energy is abundantly available. Nature offers it as a solution. Around 300 million people in India have no power, so solar is a good asset. Cheapest energy has to be the best energy. People are thinking and now relooking at the solar sector. CSP will be a winner. The only question is, how long will it take.”

A coherent energy policy is needed, since it plays an important role. Also, resource efficient growth is necessary.

“Nuclear energy has an important role to play in the distant future. The present state of nuclear energy, 70 per cent, is not the solution for the supply of energy. Different nuclear sources are the answer to the future. It has a great advantage and is forever.”

Explaining how hydropower has been a success and Germany, he said, “It meets 3 per cent of its power needs from this source. However, a large amount is not produced.”

“Most of the RE is electric in nature, for instance CSP. In CSP, we are accumulating energy in the form of heat and preserving it. The key however, in RE, is storage. Only when we can identify storage, will it help.”

Explaining about the hydrogen fuel cell, he said, it is gigantic, but not a final product. The substitute of oil is going from a liquid material. The future for hydrogen fuel cell is bright.

On the relevance of waste to energy in a country like India, the Nobel Laureate said, “In India, even a small amount of electricity will make a huge difference.

It is a modest amount of electricity, but makes an enormous difference for India.

Waste to energy is an important solution.

We need to look at things which are simple, but still make a difference.”

Sultan Ahmed Al Jabel, UAE’s envoy for energy said, “The close relationship between food, water and energy has been undermined.” Jabel, who has also won the Zayed Prize, added, “Forty per cent more energy will be needed by the planet.” He lamented that there is a lot of talk, but nothing is being done in an inclusive manner to address the challenges. We are not taking the right measures. What we need to do is address income related challenges and look at opportunities in rural areas around the world. Informing of three pilot programmes in UAE, three water desalination plants that are fully

Prime Minister Manmohan Singh, who inaugurated the meet, said that the theme of this year’s sustainable Summit, “The Global Challenge of Resource-Efficient Growth and Development”, has a particular resonance. “Humanity has traditionally put its faith in advances of technology to resolve problems of resource scarcities. However, there is now a growing realisation that there may be no easy alternatives for some resources, particularly environmental resources. Resourceefficiency is, thus, a necessary condition for sustainable development, and a key element of the economic pillar of sustainability.”

powered by RE, he added, “We no longer can segregate energy and water issues. They are interlinked.”

Donald Ramotar, President of Guyana, spoke on how inequality has created poverty in many parts of the world.

“What we need is a low carbon development strategy. We are trying to preserve 99 per cent of our forests.

Thus, we will need to develop a model with Norway. They are paying us for the carbon services that we will provide.”

Adding further, he said, “We recognise our responsibility that we realize to fight climate change. More importantly, we need to go into clean and renewable energy so that it furthers economic development.” In a discussion on ensuring energy, water and food security, Arvinn Eikeland Gadgil spoke on how mere good governance is not enough, fair governance is also required. “We need to improve the policy.”

On the concluding day, Montek Singh Ahluwalia, chairperson of the Planning Commission of India, said the government must avoid subsidies of all kinds. “Many people think that subsidising renewable energy equipments is good for the economy.

They think only the fossil fuel subsidy is bad. They are wrong. If India wants to attain green growth, it has to stop all subsidies” and ensure businesses pay their fair share of taxes.”

Peter Bakker, president of World Business Council for Sustainable Development, a Geneva-based organization which encourages investment in sustainable business models, said, “India needs to support and promote a popular movement toward renewable energy as a sensible and sustainable choice.”

March 2013 | Energy Next | 49

State Initiative

Solar Lighting

TN empowers poor through

green energy In a first-of-its-kind project in the country, a solar-powered green house scheme for the benefit of the poor in rural areas is underway in the state.

Energy Next has the details

T

he government of Tamil Nadu has launched the country’s largest solar rooftop programme under the Chief Minister’s Solar Powered Green House Scheme (CMSPGHS).

The target is to power three lakh rural houses with solar lighting systems over a period of five years from 2011-12 to 2015-16. Under the scheme, 60,000 houses will be electrified every year.

The solar home lighting systems, each 50 | Energy Next | March 2013

consisting of a 100Wp solar photovoltaic (SPV) panel and five 9W CFLs, come at an estimated cost of ` 180 crore that includes financial assistance of ` 42.6 crore from the Ministry of New and Renewable Energy (MNRE).

The CFLs can be kept on for five hours a day. The solar home lighting system has an innovative design with storage facility for just a day and provision of grid backup. The Smart Hybrid Power

Conditioning Unit in the system allows the battery to be charged from grid during rainy or cloudy days when solar power is not sufficient to fully charge the battery. The intelligent algorithm permits charging from grid only between 10 am and 6 pm. This has been done to prevent charging during night (which would leave the battery fully charged when the sun shines in the morning) and has also excluded charging during morning peak. The reduction in

A solar module installation (Photo: TEDA)

comprehensive Enterprise Resource Planning (ERP) system. Manufacturers submit the lots online through their login, the PDI agency logs in and receives the random sample numbers of the components to be inspected and then submits the inspection report. Similarly, installation report is submitted online by the vendors. autonomy has resulted in considerable reduction in capital investment on additional battery and SPV panel capacity required for higher autonomy (usually three-day autonomy is provided). Since Tamil Nadu has more than 320 sunny days, no autonomy is provided. The system comes with a five-year replacement warranty (20 years for SPV panel) and will be maintained by the suppliers for five years. Quarterly servicing is mandated.

Third-party agencies have been appointed for 1 per cent sample predispatch inspection (PDI) at factories and 100 per cent post-installation inspection and certification.

The entire project runs on a

A house with solar home lights (Photo: TEDA)

This enables the third party inspection (TPI) agency to inspect and submit its report online. All reports are processed automatically by the ERP system for acceptance or rejection.

TEDA’s district engineers then do super-check inspections of the 5 per cent random numbers generated by ERP. Payment is automatically made for each batch of 60 installations.

A state-of-the-art call centre is being established through CMC for receiving complaints and monitoring rectification by the suppliers. The vendors selected are Tata Power Solar and Shandong. QSS is the predispatch inspection agency and TUV and SGS are the third party inspection agencies. The proposal for LEDbased DC SPV home lights instead of CFL-based AC system is under consideration for the coming years.

Under this scheme, rooftop SPV modules totalling 20-30 MW would be installed in five years.

Tamil Nadu has also launched the unique scheme of energising existing street lights with solar power in clusters through centralised solar power plants. One lakh street lights in village panchayats are targeted over a period of five years – from 2011 to 2016. For the year 2011-12, 20,000 street lights have been remodelled at an estimated cost of ` 50.5 crore that includes financial assistance of ` 8.1

crore from the Ministry of New and Renewable Energy (MNRE).

This scheme is a first of its kind in the country, as the existing street lights that were so far being powered by grid supply are now powered by solar energy in clusters of 10 with the provision of grid backup. The existing street lights with 40W tube lights and filament lamps are replaced with 20W LED lights. Similar to the home lights, the Smart Power Conditioning Unit in the system allows the battery to be charged from the grid only between 10 am to 6 pm during rainy or cloudy days when not enough solar power is available to fully charge the battery.

A remote monitoring unit is provided in each power plant in order to keep an eye on the performance of

A battery and an inverter (Photo: TEDA)

the street lights from the office of Tamil Nadu Energy Development Agency (TEDA) as well as from each district. A daily fault report is generated and sent to the suppliers for rectification within two days.

Any tampering of panel, battery and inverter housing is also monitored with the help of tamper alarm and SMS. To save energy, one-third of the full brightness of every street light is dimmed from 10 pm to 5 am.

The system comes with a five-year replacement warranty (20 years for SPV panel) and will be maintained by the suppliers for five years. Monthly servicing is mandated.

The vendors selected are Tata Power Solar and Sukam. QSS is the predispatch inspection agency and Salzer is the remote monitoring and third party inspection agency.

March 2013 | Energy Next | 51

Moving Ahead

SMWT

Small wind can make large strides Small-scale wind power may not be the first solution that comes to mind when thinking about rural electrification, but small and medium wind technologies offer excellent solutions for this purpose. Marcus Wiemann discusses the mid-term findings of an information campaign in developing countries

S

mall and Medium Wind Turbines (SMWT) offer the most environmentally friendly and cost-competitive technology for rural electrification in developing countries. Yet, they are often left out of the energy solution options by decision makers and project developers.

Here, we bring up some of the facts about SMWT and its promising market that cannot be ignored.

The global market for SMWT is estimated to double between 2010 and 2015, especially in developing and emerging markets, reaching US$634 million.

These technologies already have a track record of success in rural electrification projects. For instance, in China, the use of SMWT began in 1980, and by 2010, there were 400,000 systems reported.

The price of small wind ranges between US$0.15-0.35 per kWh over the lifetime of the system, making it, under favourable conditions, cheaper than small PV, small hydro and other renewable and non-renewable solutions, such as diesel or kerosene.

Furthermore, small wind can be easily integrated into hybrid systems with solar energy or diesel. Such hybrid systems offer a more sustainable, higher-quality and lower-costs solution than diesel-only systems.

So why aren’t these technologies used more widely, especially in developing countries where cost is such a big issue? Despite the lack of market information on SMWT in these areas, there

52 | Energy Next | March 2013

There is a widespread lack of quality standards and certifications for both the technologies and the installation process, which would guarantee the reliability and safety of the systems and avoid the production of low-quality products that damage the image of the technology.

In order to tackle these barriers, the Alliance launched a year-long Small Wind Campaign in June 2012.

One of the common elements in the barriers identified was the lack of information/awareness on the part of energy decision makers. Without proper knowledge and with such a small amount of small wind systems installed in developing countries, it is very difficult for those responsible to create a suitable legal framework for fostering SMWT. Therefore, the first step of the campaign was to pass on reliable, transparent, relevant and tailored information about SMWT. The approach favoured mainly small groups and personal meetings, and the content focused on real-life projects with challenges that the audience could relate to and apply in their own communities.

is the general agreement that they are only a small percentage of the offgrid market.

framework covering SMWT). The knowledge and the level of experience with small wind turbine remain rare amongst practitioners from the public and the private sector.

The answer is blowing in the wind With this question in mind, at the beginning of 2012, the Alliance for Rural Electrification (ARE) asked its members to identify the barriers they have faced while doing business in developing countries. The main conclusions are as follows:

The production of SMWT is highly concentrated in developed countries.

More than a third of companies manufacturing wind turbines are located in the USA and the United Kingdom.

SMWT remains relatively unknown to decision makers in developing countries. Through regulation, governments are directly responsible for the growth of the market and the performance and safety of the systems, but they are not fully aware of the potential of wind (as demonstrated by the very limited number of countries with a wellestablished policy and regulatory

Determining a proper setting and location for the wind systems is essential to maximise the energy production, so an exhaustive on-site wind resource assessment is key to the project’s formulation. Unfortunately, collecting this data is often too expensive and the study’s duration is simply too long for developing countries to invest, especially in such small-scale projects.

The pillar of the Small Wind Campaign is the position paper “The potential of small and medium wind energy in developing countries” (available for free download at ruralelec.org), which does not just describe the technology, but also includes recommendations and policy tools. The challenge of the initiative was to create opportunities for contact in a market that remains an extremely fragmented sector.

Six months into the project, activities included online webinar sessions, a side event during the 1st International Off-grid Renewable Energy Conference and Exhibition (IOREC), held in Ghana, visit by a business delegation to Ivory Cost and several virtual and physical workshops throughout the developing world.

The initial contact has been made, and the basics about SMWT delivered March 2013 | Energy Next | 53

Moving Ahead

SMWT

One of the common elements in the barriers identified was the lack of information/ awareness on the part of energy decision makers. Therefore, the first step of the campaign was to pass on reliable, transparent, relevant and tailored information about SMWT to an estimated 100 stakeholders from developing countries.

For the Alliance and its members, it was an opportunity to assess firsthand the real situation of SMWT in these largely unknown markets.

Although the ultimate objective of the campaign was the creation of partnerships and business opportunities, from very early on, it was clear that a step backwards was needed in order to fill the basic gaps in information.

price of fossil fuels, the increasing electricity needs in off-grid areas and even the increasing international financing for renewable energies, environment and climate change as well as energy access.

With the Alliance’s Small Wind Campaign, the foot is in the door – so how to move forward and what challenge to approach next?

Aspects such as how to evaluate whether the technology is suitable for a specific area, how to maintain it in the long term, how to choose the most suitable product, and most importantly, how to make realistic expectations, became the core of the presentations during the beginning of the campaign. In the next six months, the Alliance will build on this first stage to include other essential elements to its campaign.

Balthasar Klimbie, the Director of Dutch Small Wind Turbines, and one of the participating members, suggests, “In my opinion, this first step was quite good for raising awareness.

Next we should try to work on training and capacity building. Only through passing on knowledge to the local communities can we ensure the sustainability of the systems. We need to make sure that decision makers know how to deal with this issue.

There is a long way to go.”

A long way to go The good news is that decision makers in developing countries have shown interest and curiosity about renewable energies in general and wind in particular. Renewables seem to tick all the boxes of their particular energy needs: the decreasing renewables’ costs and the rising

Taking into consideration the conclusions and information needs detected during the first part of the campaign, new efforts will also address the financial side of projects.

For some of the next online and in-person meetings, the Alliance will partner with international organisations such as the Asian

54 | Energy Next | March 2013

Development Bank. A virtual business delegation covering Asia and the Pacific, and several webinars are already in the works. And, since the energy storage sector is facing similar barriers in developing markets, the Alliance is already planning the launch of the Battery Campaign in June 2013, in order to ease the path of a technology that ensures the provision of reliable electricity service.

During its first six months, the Small Wind Campaign has walked a few steps towards reaching its very ambitious goal, and although its impact may seem like a drop of water in the ocean (especially compared to the 1.3 billion people without electricity today), if the enthusiasm and belief of the people involved shows anything, it is that we are on the right track.

The author is Secretary General of the Alliance for Rural Electrification (ARE), an international business association focusing on the promotion and the development of off-grid renewable energy solutions for rural electrification in developing countries.

The views expressed by the author are personal

Global Voice

Milo Sjardin

‘Re will gradually

need fewer subsidies’

A recent report revealed that as far as clean energy was concerned, the US, Italy, Spain and India were among the biggest decliners while Japan and South Africa led the charge of “new markets”. This has been attributed mainly to regulatory uncertainty and policy changes in these countries. Milo Sjardin, Head of Asia Pacific at Bloomberg New Energy Finance, speaks to Sapna Gopal on the trends that will influence the clean energy sphere Q: Clean energy investment apparently declined by 11 per cent last year. What does this mean for other countries, more so India?

A: Investments in clean energy declined globally for the first time since we started tracking the market in 2004. This was primarily due to political uncertainty and subsidy declines across Europe and North America with 20 per cent and 27 per cent declines respectively. Asia, on the other hand, posted another year of strong growth with investments at $111 billion in 2012, up by 13 per cent from 2011 levels. China and Japan led the pack as their solar sectors boomed on the back of attractive subsidies. India posted the highest growth figure in 2011, but almost fell by half in 2012 to $6.9 billion due to the expiry of key subsidies.

Q: Figures reveal that unlike 2011, global investment in clean energy has reduced considerably. Why do you feel this has happened? Are things likely to improve in the coming year?

March 2013 | Energy Next | 55

Global Voice

Milo Sjardin

In 2012, the total amount invested in clean energy was a record $67.7 billion outlay by China, up by 20 per cent from 2011, due to a surge in its solar sector

A: This year is likely to see very similar investment levels as in 2012.

Since the cost of maintaining high subsidies for renewables increases and the price of renewables gradually declines, there will be more pressure to withdraw subsidies from the sector. This will therefore result in further subsidy cuts this year, at least across Europe. However, this decline will largely be offset by continued growth in China, Japan as well as many smaller countries that will see increased renewable deployment.

The number of countries in which renewables are deployed on a large scale has doubled over the past few years.

Q: How has policy impacted the growth of clean energy in countries such as US, Spain and India?

A: Policy is still the key driver of renewable deployment and any change therefore brings about a very different investment climate.

The US, Germany, Italy, the UK, India, France and Spain all reduced their subsidies for renewables, resulting in a decline from 68 per cent to 51 per cent in investments year-on-year. Although the nearterm effect is large, renewables will gradually require fewer subsidies in order to compete with fossil fuels as their costs are coming down rapidly. In particular, solar costs dropped by 60 per cent over the last two years. In Australia, renewables are competitive with fossil fuel generators now that it has implemented a carbon price.

Q: China, Japan and South African have posted an impressive growth.

Any particular reasons which can 56 | Energy Next | March 2013

be attributed to this rise? What will it mean for the clean energy sector in these countries?

A: China has been a great proponent of renewable energy since 2005 when it first started to incentivise wind projects. In 2012, the biggest change came from solar as prices had dropped precipitously, the government pushed for more development and the large equipment oversupply caused manufacturers to invest in downstream operations. Japan’s rise was also driven by solar, but for different reasons. After the Fukushima disaster and the shutdown of its nuclear plants, it was faced with a power shortage and put in place very attractive incentives to boost renewables. Solar was given a very

attractive subsidy and being one of the easiest and quickest generation technologies, it received most of the development money. South Africa attracted large investments too, with its solar and wind tenders.

Q: Why have Mergers and Acquisitions suffered such a setback? What can be done to reverse the trend?

A: M&A activity saw a 31 per cent drop to $51 billion in 2012. The decline was large and caused entirely by a drop-off in corporate mergers and acquisitions. This is reflective of broader trends in the global corporate M&A space. With respect to renewables, a few conditions are largely to blame. Both the solar and wind markets are struggling

In contrast, the market for acquisitions of renewable power projects remained in quite good health. With more operating renewable assets to choose from and large investors looking for low-risk assets with a solid revenue profile, this market will likely remain healthy and could possibly increase this year.

Q: While sectors such as solar, wind, biomass, energy efficiency and geothermal energy have witnessed a growth but not as much as earlier, the small hydro sector has done well. Any reason why? Is this true for India as well?

A: Small hydro is a technology which has not seen significant growth, but investments have consistently been around $4 to 7 billion during the past eight years. Last year, the activity was up by around 17 per cent, but this was mostly because of European projects. In Asia, investments have broadly stayed the same. The sector does provide good opportunities for growth, however; it is established, predictable and there is sufficient resource potential left. Especially in countries such as China, India and Southeast Asia, there will be more and more projects being developed though there will not be a significant acceleration in activity.

Q: What are the key factors which you feel could help in bettering the prevailing clean energy sector across the globe?

with consistent oversupply that is unlikely to be resolved within this year. Subsidies in traditional markets such as Europe and North America are likely to be scaled back further and we have not yet seen significant production capacity reductions across the globe. M&A activity is therefore focused on technology or market access rather than achieving scale as evidenced by the few deals that did take place in 2012.

Whether the M&A market will pick up again this year remains to be seen, but we will certainly see further acquisitions to obtain access to specific technologies, new geographies, or to expand downstream in the case of manufacturers. For example, China is still looking to further consolidate

its renewable industries, in particular solar. We are therefore likely to see further activity in that country throughout the course of 2013, especially now that the government is ensuring continued demand for wind and growing demand for solar projects.

A: A number of factors could greatly benefit the industry as a whole. First, the realization that renewables have become increasingly competitive with more established technologies and will become even more so over time, should be more widespread.

Renewables will have to be judged on their own merit rather than on the subsidies they bring, as these will be gradually phased out.

Secondly, renewables are already spreading to almost every country in the world, but it is imperative to ensure significant local company involvement. This will come with experience, but will ensure that March 2013 | Energy Next | 57

Global Voice

Milo Sjardin

finance costs come down and development expertise goes up.

Research by Bloomberg New Energy Finance reveals that overall global investment in 2012 was $268.7 billion, down from a revised figure of $302.3 billion in 2011. However, the 2012 investment total was the second highest ever, and five times that of 2004 58 | Energy Next | March 2013

Third, policymakers will need to deal with a fundamental shift from a centralized to a decentralized electricity system. This will require opening up the power sector to small players – from independent power producers down to the level of individual households –as well as ensuring hassle-free access to the grid without incumbents putting up barriers to protect their traditional business.

Q: How has energy efficiency fared overall? Is there scope for this sector in a country like India?

A: Energy efficiency remains one of the lowest cost opportunities to reduce energy consumption and carbon emissions. It should also be one of the easiest to achieve, but its development is generally held back due to a lack of awareness,

competing business priorities, and the landlord-tenant problem. There is significant scope for increasing energy efficiency in Asia across all segments of the economy, particularly in a country that has high energy intensity such as India.

As assets get replaced, there will automatically be an improvement in efficiency. But this is not enough.

Policy is required to provide a push to the sector. The most effective way has generally been through traditional command-and-control measures such as efficiency standards for compliances and industrial equipment. However, many different policies exist including voluntary agreements, efficiency targets and certificate trading. An added benefit of focusing on energy efficiency policies is that lower energy intensity should ultimately put the country in a good position with regard to global economic competitiveness.

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IREDA Corner

Green Quotient

I

REDA conducted an internal assessment in 2012 to determine its own greenhouse gas (GHG) emissions. Globally, the most widely used standard for carbon accounting by organisations was also employed by the organisation. This mechanism is the Greenhouse Gas Protocol, developed by the World Business Council for Sustainable Development (WBCSD).

The GHG Protocol is a building block which has been used as a reference to create many other standards and calculators such as Carbon Trust Standard, Carbon Disclosure Project, ISO 14064 Standards, etc.

Gauging

carbon footprint

As business operations can vary in their legal and organisational structures the GHG Protocol uses two distinct approaches to estimate facility-level GHG emissions. They are: the equity share approach and the control approach.

Under the equity share approach, a company accounts for GHG emissions from operations according to its share of equity in the operations. In case of the control approach, a company accounts for 100 per cent of the GHG emissions from operations over which it has control.

IREDA decided to use the latter concept and earmarked its Corporate Office and Registered Office, both located in New Delhi, and branch offices (2) and camp offices (2).

As emissions result from a variety of activities, IREDA took the sources mentioned under all the three Scopes of GHG Protocol – Scope 1, 2 and 3so as to measure its footprint. Scope 1 covers emissions from company owned resources; Scope 2 covers emissions from purchase of grid electricity; Scope 3 covers indirect emissions sources including business related travel, employee commuting, use of stationery items, courier and shipping services and usage of tea/ coffee paper cups.

Further, 2012 was taken as the base year.

To make the exercise more authentic, the emission factors were obtained from reputed research agencies including CEA, CPCB, IPCC and Carbon Neutral.

The data sources that included log books, electricity bills, rail and air ticket bookings, purchase bills for stationery 60 | Energy Next | March 2013

items, etc., were consulted to create a comprehensive data picture. Extensive use of IT was made to capture data as available in the intranet. Information pertaining to daily office commuting was obtained by way of a computer application hosted on the intranet, wherein, the employees were asked to provide in their details.

The total greenhouse gas emissions of IREDA have been estimated at 774-tonne CO2e (Equivalent Carbon dioxide), resulting in a per capita emission level of 5.95 Tons CO2e. The largest share is from Scope2 emissions (62 per cent), followed by Scope3 emissions (37 per cent).

Even before the baseline establishment of its carbon footprint, IREDA initiated several measures to reduce its impact on the environment and shift towards a sustainable way of working. Such measures included the use of nanocoated double insulated low energy-

The Indian Renewable Energy Development Agency (IREDA) plays a key role in funding renewable energy projects throughout India. As a member of the global community with a mission to encourage people to embrace an eco-friendly lifestyle, IREDA set out to lead by example.

Energy Next reports consuming glass, harvesting daylight, decked insulation of roof for reducing HVAC load, the use of LED, T-5 and CFL lamps, etc.

Moving forward, IREDA aims to reduce its emissions further by way of some low-cost and easy to adopt measures by sensitizing employees to follow a lowcarbon lifestyle. This includes switching off lights and computer systems when not in use, promoting use of public transport, use of coffee mugs in place of paper cups, encouraging video conference facility for communicating with customers (to obviate physical travel) and recycling of paper by waste segregation.

Last but not least, IREDA has purchased 100 Renewable Energy Certificates (REC) to show its leadership in the Indian cleantech movement as a true harbinger of Green energy revolution in the country.

First Ever Trade Magazine on Renewable Energy Topics Covered • Policy initiatives • Industry issues • Technological

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Event Coverage

WFES 2013

Preparing for the challenges ahead Each year, it witnesses world leaders, international policy makers, industry leaders, investors and experts deliberate sustainable solutions for future energy challenges. This time too, the World Future Energy Summit was host to a summit, an international exhibition, the Project & Finance Village, the Young Future Energy Leaders programme, corporate meetings and social events. Energy Next looks into what transpired

T

he sixth edition of the World Future Energy Summit (WFES), held in Abu Dhabi from January 13 to 17, 2013, witnessed over a 1,000 conference delegates deliberating on the need for greater support from governments with regards to policy development, investment and collaboration.

The link between water and energy was apparent when Masdar, host of the WFES, announced an ambitious long-term goal to develop large-scale commercially-viable desalination plants that are fully powered by renewable energy sources by 2020. Titled ‘Powering Future Energy Innovation’, WFES 2013 was co-located with the first International Water Summit, and the host venue for the biennial International 62 | Energy Next | March 2013

The event is dedicated to advancing future energy, energy efficiency and clean technologies Renewable Energy Conference in Abu Dhabi (ADIREC) which coincided with the third annual session of the Assembly of IRENA. During the International Renewable Energy Conference in Abu Dhabi

(ADIREC), also hosted by the World Future Energy Summit, 165 speakers led the discussions and this set the global future energy agenda for the next decade. Moreover, it also provided a solutions blueprint for the 120 countries which have already set renewable energy targets.

Innovation was a key focus of the ADIREC programme and included sessions on how technology and innovation will shape the future and drivers of innovation in future energy technologies. Leading experts were on panels during parallel sessions on solar energy, wind, geothermal energy, energy storage, innovation

Thousands of visitors thronged the 40,000 square metre gross exhibition space at WFES 2013 to see the latest technologies and solutions in areas such as energy efficiency, solar energy and electric transport and entrepreneurship, sustainable transport and the evolution of hydropower.

The REN21 Renewables 2012 Global Status Report, the sister publication of the Renewables Global Futures Report which was launched during the WFES, reveals that over US$257 billion were invested in renewable energy in 2011.

Globally, 200 million homes now collect solar hot water and there are 5 million jobs created in renewable energy industries.

During the event, the International Renewable Energy Agency (IRENA) allotted an initial US$350 million funding cycle in conjunction with the Abu Dhabi Fund for Development (ADFD).

According to officials, the two Abu Dhabi-based institutions are working together to incentivise innovative renewable energy projects in developing countries.

“This financing from ADFD, administered with the support of IRENA, will help projects which are innovative and

replicable to get off the ground,” IRENA’s Deputy Director-General, Frank Wouters said. “By making such projects bankable, we believe we can create substantial growth opportunities for renewables in energy-poor countries,” Wouters added.

Dhabi’s multi-faceted renewable energy company, was staged at the Abu Dhabi National Exhibition Centre and brought together project owners and solution providers with investors and buyers from both the public and private sectors.

As per the World renewable energy agency, GCC countries can achieve up to $200 billion in returns by 2030. The Project & Finance Village at the sixth World Future Energy Summit (WFES) in Abu Dhabi also provided an avenue for investors to evaluate new projects.

Encouragingly, there was an increase in the number of international cleantech and renewable energy projects on display at the village.

Around 650 companies from 40 countries showcased their products to an eager audience, including 70 new product launches. The Zero Tracer, an enclosed electric motorbike which can reach speeds of around 250 kmph, attracted a number of curious visitors, while the Estidama-compliant home in the new Sustainable Living area was the centre of attention for developers, engineers and architects, who were looking to incorporate the latest in energy efficiency in their projects.

Showcasing energy efficiency WFES 2013 saw the introduction of the Sustainable Living Area, incorporating the WFES Eco-Home endorsed by Estidama and the energy efficiency pavilion. The WFES Eco-Home is a real size, walk-in house featuring green and eco-friendly elements, complying with the Estidama Pearl Rating System.

The exhibit, hosted by Masdar, Abu

“We also want to keep up with the current trends in the renewable energy industries and support the sector as it becomes more important to the global economy,” Naji El Haddad, Show Director for WFES 2013, was quoted as saying.

Next year, the event will be held at ADNEC from January 21-23.

March 2013 | Energy Next | 63

Upcoming Events

Mar

CSP Today India 2013

12-13

Mar

T

New Delhi, India

he two-day event is a unique platform to provide the stakeholders with the exact information that is needed to win business, develop projects and make CSP viable in the Indian context. The event will try to shed light on various issues and discuss about ways to increase CSP’s market share in India and boost business.

London, United Kingdom

http://www.csptoday.com/india/index.php

Mar

National Conference on Green Energy (NCGE- 13)

30

th

T

Chennai, Tamil Nadu, India

he NCGE is a forum for the presentation of technological advances and research results in the fields of Green Energy.

The conference will bring together leading researchers, engineers and scientists on a single platform for discussing future road map of the green energy sector.

http://www.rmd.ac.in/NCGE13

APRIL

20-21

Apr

11-12 Moscow, Russian Federation

64 | Energy Next | March 2013

Offshore Wind Developer Supply Chain Forum 2013

Mar

Kyiv, Ukraine

T

he event is Europe’s one of the most important supply chain focused event on the off-shore wind energy market. The conference will provide an opportunity to get an insight into various topics of importance such as new technology, lead times, contracting and alliances and the emerging markets.

http://www.windenergyupdate.com

Apr

8-10 Dallas, Texas, USA

Apr

Wind O&M Summit USA 2013 he event serves the purpose of being a definitive commercial networking forum for the wind power project owners and developers in the US. The conference aims to address the O&M issues of the wind farms with an in-depth focus on the technology, post-warranty maintenance strategies, solutions and partnerships to ensure profitability.

he 2nd International Conference & Exhibition is one of the most important interactive platforms for the solar power players in the CIS and Eastern Europe region. The event is likely to have participation of delegates from over 25 countries discussing commercial opportunities of the solar power project development in the emerging markets of the region.

http://rencentre.com/en/cisolar

10-11

T

Solar energy in the CIS and Eastern EuropeCISOLAR-2013

Apr

CISWIND2013

T

he event is an important international conference & exhibition in the wind energy industry of the CIS and Eastern Europe region. It is an important meeting point for policy makers, business leaders and other stakeholders of the wind energy market in charting roadmap for the development of the industry in the emerging markets in Eastern Europe and CIS countries.

http://rencentre.com/en/ciswind

Edinburgh, United Kingdom

http://www.windenergyupdate.com

T

28-29

Wind Farm Development: European Offshore 2013

A

dedicated event for the off-shore wind energy sector aimed at enhancing networking and business development opportunities for the stakeholders. The event will witness participation from key industry players and decision makers who will throw light on the development and future of the sector.

http://www.wplgroup.com/aci/conferences

12-14 Hyderabad, AP

Vega solar India 2013

T

he event aims to provide a platform to the global leaders in solar power industry together to support the growing solar Industry in India. The show will connect industry to the entrepreneurs, experts, policy makers, consultants, professionals and corporate and work towards taking the solar power industry towards glory.

http://www.vegasolarindia.com/

VOLUME 3 ISSUE 5

march 2013

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In Conversation

S Padmanaban p22

Budget 2013-14

Industry Speak p29

Perspective

Anil Kakodkar p33

Moving Ahead: Small wind, big potential Energy & Development: DSDS 2013 Opinion: Beating the odds

VOLUME 3 ISSUE 5

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March 2013

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Listen to the high winds…

India’s potent wind energy sector has been wavering of late, yet there are reasons to believe that the rough weather will only make it grow stronger and faster