The Indian energy sector has undergone major changes by way of a reform process in the last few years. The monolithic structures of many state electricity boards, which so far controlled the supply of electricity, have been unbundled into transmission, distribution and generation entities, leading to the creation of a free energy market scenario. The numerous policy and regulatory changes have had a far reaching impact on pricing, planning and logistical decisions of power producers, fuel suppliers, state utilities, distribution companies and end consumers.

Electrical Energy Sector Overview

(Data as on Dec 31, 2008, Source: Central Electricity Authority)

Total installed capacity: 147'403 MW Energy sources (> 1 %) (graphic 2)

Today, most of India's energy needs are met through coal-based thermal power plants, oil imports and hydropower. The import of oil costs exchequer over 30 % in forei gn exchange reservesThe energy nee the country are bound to rise if the economy has to grow 7-8 per cent per annum. To meet its energy deficit of 12 per cent as well as cut its carbon footprint, the country is aggressively promoting renewable energy sources.

In 2003, the government of India enacted the Electricity Act 2003 which has specific provisions for the promotion of renewable energy sources. The

implementation of the Act set the tone for effective regulation of the energy sector, including the renewables, under the supervision of the regulator.

implementation of the Act set the tone for effective regulation of the energy sector, including the renewables, under the supervision of the regulator.

Wind Energy Sector Overview

Installed capacity of wind energy (end of 2008): 9'654,8 MW

National target: The Indian government has set a target to add another 10'500 MW during the Eleventh Plan period (2007-2012).

Table 1 State-wise wind installed capacity as on 3 December 2008 (in MW) (Source: C-WET) (graphic 3)

Wind Energy Resource Information

India's Wind Resource Assessment Programme is one of the largest in the world. The programme is being implemented by the Ministry of New and Renewable Energy (MNRE) through the Chennai-based Centre for Wind Energy Technologies (C-WET). The Programme covers research and development, survey and assessment of wind resource. The main activities of C­WET include resource assessment and, testing and certification of wind turbines Until now, 25 States and Union Territories have been covered under the Wind Resource Assessment Programme. As on 28 February 2009, the total number of wind monitoring stations (established) stood at 618, while the ones in operation are 91, according to C-WET data. As many as 216 potential wind sites have been identified in the country. Besides, wind speed measurement is also being undertaken by the private sector for development of wind power

Wind power installations and potential

The country ranks 5h in the world after the US, Germany, Spain and China in grid connected wind power installations According to MNRE, a cumulative total of over 54 billion units of electricity have been fed into the State Electricity Grids till December 2008.

The high wind potential states in the country include Tamil Nadu, Gujarat, Maharashtra, Rajasthan, Karnataka, Andhra Pradesh and Madhya Pradesh. There are some coastal states like Kerala, Goa and Orissa hat seem to have the potential but where wind resource assessment is yet to be completed. Lately, the state governments have started hiring the services of wind energy firms to get wind mapping of their regions done. A recent example is of the Jharkhand Renewable Energy Development Agency that authorised Suzlon Energy to do wind mapping of the state.

The onshore wind power generation potential has been estimated by C-WET at about 48'561 MW. This potential covers the sites having wind power density greater than 250 W/sq m at 50 m height and assuming 1 % land availability in potential areas for setting up wind farms with average land requirement of 12 ha/MW.

Offshore: In India, the potential sites that qualify for offshore wind farming are the Gulf of Mannar in southern tip and coastal areas of Gujarat. The coastal regions along both east and west coasts

recorded rather low wind power densities. To further explore the possibilities of offshore wind in the country, a working gro up has been formed by the governm.

An offshore wind demonstration project has been put up near the Bandra-Worli sea link in Mumbai, Maharashtra by Suzlon Energy at a total cost of USD 10 million.

Wind Energy Support Schemes and Wind Energy Legislation

A. Central Government

• Asper the Income Tax Act, an accelerated depreciation of 80 % in the first year of installation of wind power projects is allowed.
• Generation-based incentive (GBI) - It provides a benefit of INR 0,50 per unit for a period of 10 years to the eligible wind power projects through IREDA. The scheme is presently limited to a total capacity of 49 MW. I is meant for only those investors who do not avail of the benefit of accelerated depreciation. The GBI scheme, if extended beyond the above mentioned limit, is expected to give a tremendous fillip to the wind sector as a whole and is likely to promote efficiency in wind electricity generation.
• 10 year income-tax holiday for wind power projects.
• Concessional import duty on certain components of wind electricity generator
• Excise duty exemption
• Loan facility for setting up wind power projects by the Indian Renewable Energy Development Agency

B. State Governments

• Electricity Tax exemption
• Enabling utilities to: a) Purchase wind power; b) power wheeling and banking facilities

C. Wind Energy Legislation

The Electricity Act, 2003 was instrumental in the development of renewable energy. It repealed all the earlier electricity acts of 1910, 1948 & 1998 and further defi ned the role of re gulatory c ommissions in term pricing, competition and transparency. The Act provides for several enabling provisions to promote power generation from renewable energy sources such as :

Section 61 (h) which provides the framework for tariff determination and lays out directions for the formulation of the National Tariff Policy

Section 86 (1)(e) mandates SERCs to specify a percentage of RE power to be procured for consumption, and provide suitable measures for connectivity with grid.

National Electricity Pol icy 2005

It is formulated based on the directions given by the Electricity Act, 2003 and lays down specific provisions

for the promotion of power generation from non­conventional energy sources. The Policy underlines the need for efforts to encourage private sector participation through suitable promotional measures and calls for efforts to reduce capital cost of projects based on renewable energy sources.

Similarly, the National Tariff Policy, 2006 gives guidance on purchas tariff for powe generation from renewable energy. It (Provision 6.4) mandates that procurement of RE power by distribution companies shall be done at preferential tariffs determined by the appropriate commission through competitive bidding process.

According to the Act, provisions regarding tariff determination and percentage specification are implemented by state electricity regulatory commissions (see next table - graphic 4).

Some of the provisions which are used to promote power generation from non-conventional energy sources are:

Open access: As per the Electricity Act 2003, anybody can have an “open access” to grid for exchange of power with payment of necessary charge for use of the grid infrastructure. In case of wind power, the power can be wheeled for own consumption and sold to another consumer. For such a transaction, necessary transmission and wheeling charges and cross-subsidy

surcharge (for sale of power to any consumer) are required to be paid. Many of the states like Gujarat and Rajasthan have provided concessions in these charges for wind power.

Banking: In case of wind power, since power generation is variable, there is mismatch in generation and consumption if the power is used for self consumption or sold to any consumer other than the utility. In such a scenario, the energy generated from the wind project is “banked” with the utility and used whenever the consumption is more than the generation. Different states have different mechanisms for treatment of such banked energy with banking period extending from 1 month to 1 year. At the end of the banking period the full or part of the surplus energy is considered as sale to the utility.

Wind Energy Projects

There are several wind farms in the country that now exceed 50 MW. The 270 MW wind farm in Sat and 50 MW wind farm in Supa in the state of Maharashtra, set up by Suzlon Energy Ltd for its clients are some of the examples.

The state of Gujarat which was a top performer in the wind power installed capacity renewable energy sector in 2007-08, has planned various wind farms. Besi Maharashtra, Karnataka and Tamil Nadu are also looking to capitalise on their wind potential further with wind farms of the size of 1'500 MW and more. Many states such as Tamil Nadu, Gujarat, Madhya Pradesh, Andhra Pradesh and Rajasthan have revised renewable energy tariffs to provide a better risk return ratio do attract investments in renewables.

References

• Ministry of Power: www.powermin.nic.in
• Ministry of New and Renewable Energy: http://mnes.nic.in/
• Indian Wind Energy Association InWEA: www.inwea.org

Anagha Bhambr

Editor, InWind Chronicl

New Delhi, Indi

E-Mail: inwea01@gmail.com

www.inwea.org

www.inwindchronicle.com

World Wind Energy Association 2009