Power & Renewables: Power & Renewables: context, promise and context, promise and

policy policy AIBC 2010AIBC 2010

Session on Power and RenewablesSession on Power and Renewables Energy, Resources and Associated Energy, Resources and Associated

Infrastructure Conference Infrastructure Conference 11 June, 201011 June, 2010

Ligia NoronhaLigia NoronhaDirectorDirector

Resources, Regulation & Global SecurityResources, Regulation & Global SecurityTERI, IndiaTERI, India

OutlineOutlineI.I. The ContextThe Context

II.II. The potential for renewable powerThe potential for renewable power

III.III. Policy Innovations to address energy Policy Innovations to address energy challenges and create markets for challenges and create markets for renewable powerrenewable power

IV.IV. RE business and research opportunities RE business and research opportunities

I I The Context The Context

Key Challenges Key Challenges Low accessLow access: Over 500 million without : Over 500 million without

electricity and 700 million dependent on electricity and 700 million dependent on traditional fuels; traditional fuels; a per capita annual a per capita annual consumption of 650 units consumption of 650 units

High electricity shortagesHigh electricity shortages: estimated at : estimated at nearly 10% in energy terms and over 13 % in nearly 10% in energy terms and over 13 % in peak demand peak demand

Humungous projected energy resource Humungous projected energy resource needs needs to deliver 8% growthto deliver 8% growth

High dependence on fossil fuels and High dependence on fossil fuels and importsimports: 70: 70% of its oil is imported; 11% of its % of its oil is imported; 11% of its coal and 17% of its natural gas coal and 17% of its natural gas

Carbon concerns: Carbon concerns: an additional constraintan additional constraint

IEP, 2006

( figures In brackets, mtoe in 2002)

India’s Energy Resource India’s Energy Resource NeedsNeeds

2002-2031/32 2002-2031/32 (for 8% growth p.a)(for 8% growth p.a)Range of Imports in Range of Imports in

20312031

Fossil fuel imports: Fossil fuel imports: 387-1010 Mtoe; 387-1010 Mtoe; (Import dependency: (Import dependency: 29-59%)29-59%)

Coal imports : 72-462 Coal imports : 72-462 mtoe; (mtoe; (Import Import dependency:11-45%)dependency:11-45%)

Oil import: 315-451 Oil import: 315-451 MT;MT;(Import dependency: 90-(Import dependency: 90-

93%)93%) Natural Gas import: Natural Gas import:

0-97 Mtoe0-97 Mtoe(Import dependency: 0-(Import dependency: 0-

49%)49%)

Projections to 2031Projections to 2031

Coal – double Coal – double (300 )(300 )

Gas – 4 times (29 )Gas – 4 times (29 ) Oil –2.3 Oil –2.3

times(148)times(148) Hydro – 3.6 times Hydro – 3.6 times

(13)(13) Nuclear - 5.8 Nuclear - 5.8

times (24)times (24)

Electricity fuel mixElectricity fuel mix

71%

7,231 MW

29%

2,944 MW

Other REWind

Total installed capacity as on 31.3.2009 is 148 GW

78%

39,222 MW

90%

9,755 MW

10%1,141 MW

Other REWind

RES34%

Nuclear3%

Gas10%

Diesel1%

Coal52%

RES Gas Nuclear Diesel Coal

10,897 MW23%

Hydro

Renewable Power in Renewable Power in India, 2010India, 2010

Off Grid/Distributed Renewable Power (MW/MWeq)

57%30%

12% 1%0%

Biomass Power /Cogen.(non-bagasse)Biomass Gasifier

Waste-to- Energy

Solar PV PowerPlants

Aero-Generators/HybridSystems

Source MNRE as on 31.3.2010

Total : 404.56 MW/MWeq

Total: 16817.29 MW

5%

70%

16%

8%1%

0%

Grid Connected Renewable Power, 2010

Biomass Power

Wind Power

Small Hydro Power

Cogeneration-bagasse

Waste to Energy

Solar Power

Key policy directions and Key policy directions and challengeschallenges

All available energy sources to be used; All available energy sources to be used; special focus on renewable energy, energy special focus on renewable energy, energy efficiency and DSM, and nuclear powerefficiency and DSM, and nuclear power

The power sector is seen as best placed to The power sector is seen as best placed to make the transition to renewable energy make the transition to renewable energy technologies, given that 80% of investments technologies, given that 80% of investments to 2031 are yet to cometo 2031 are yet to come

Markets have been liberalized; prices to be Markets have been liberalized; prices to be market determined; efficiency across the market determined; efficiency across the value change, subsidies to be value change, subsidies to be targetedtargeted

Key challenges: time to make the transitions Key challenges: time to make the transitions and costsand costs

II The Potential for II The Potential for Renewable EnergyRenewable Energy

Electricity Capacity in best Electricity Capacity in best case scenario (2031/32)case scenario (2031/32)

Source: Integrated Energy Policy, Planning Commission 2006Source: Integrated Energy Policy, Planning Commission 2006

The Potential: Solar The Potential: Solar radiation over Indiaradiation over India

Most parts receive 4-Most parts receive 4-7 kWh/sqm/d7 kWh/sqm/d

Incidence: 5000 Incidence: 5000 trillion kWh/year trillion kWh/year energyenergy

Both solar thermal Both solar thermal and solar PV can and solar PV can be harnessedbe harnessed

Key Constraints: Key Constraints: Land, storage, high Land, storage, high

costcost

Wind resources in IndiaWind resources in India

Potential : 45,000 Potential : 45,000 MWMW

The success story so The success story so farfar 70% of current grid 70% of current grid

connected RE (non connected RE (non hydro) is from wind hydro) is from wind (>10GW)(>10GW)

Indian companies Indian companies are already globalare already global

Has achieved grid Has achieved grid parity in costs parity in costs

Bio-energyBio-energy Large biomass resource baseLarge biomass resource base

> 600 million tonnes> 600 million tonnes Technologies of interestTechnologies of interest

Liquid fuels (ethanol, bio-diesel)Liquid fuels (ethanol, bio-diesel) Gaseous fuels (producer gas, bio gas)Gaseous fuels (producer gas, bio gas) Electricity (small-scale using Electricity (small-scale using

gasification, large-scale using steam gasification, large-scale using steam route)route)

Social benefitsSocial benefits Employment in rural areasEmployment in rural areas Modern energy services to rural Modern energy services to rural

populationpopulation Potential to “green” waste landsPotential to “green” waste lands

III Policy III Policy InnovationsInnovations

Securing conventional Securing conventional energy resourcesenergy resources

Overseas investments: Balancing Overseas investments: Balancing interests and principlesinterests and principles

Enlarging the engagement with the Enlarging the engagement with the near and expanded neighbourhood:near and expanded neighbourhood: Increased energy ties: West Asia, Increased energy ties: West Asia, Central Asia, Australia , SAsiaCentral Asia, Australia , SAsia

Sourcing oil and coal from Africa: Sourcing oil and coal from Africa: building on long term relationsbuilding on long term relations

Accessing global civil nuclear Accessing global civil nuclear markets: Collaboration with the markets: Collaboration with the USA and emerging ties post the USA and emerging ties post the NSG waiverNSG waiver

Managing the hyphenation with Managing the hyphenation with China: Risks and opportunitiesChina: Risks and opportunities

Renewable energy sector Renewable energy sector development in India (the development in India (the

policy story)policy story)1970s

1980s

1990s2000 Onwards

R&D programs initiated

Focus on developing RE technologies and products

Demonstration projects

Fiscal & financial incentives introduced (subsidy, tax incentives, etc)

Increased role of Public Sector Undertakings

Infrastructure development

More emphasis on fiscal incentives

Increased Private Sector Participation

EA 2003, NEP 2005, NTP 2006

Quota/Obligation system introduced

Preferential tariffs for RE

Integrated Energy Policy 2006

National Biofuels Policy

NAPCC

NSMSource: S Garud

WIND HYDRO

GRID

Stand-alone Solar Systems

1980

Mini HydroBiomass

Wind +

Solar

Solar Mini Grid

1990 2008

Smart Mini Grid

Trends in RET Systems innovations in India

Village Village systemsystemss

IntegratiIntegrationon

National Solar MissionNational Solar MissionTo sharply upscale grid connected solar To sharply upscale grid connected solar

power:power: 3 phases: 1000 MW -2013; 10000 MW-3 phases: 1000 MW -2013; 10000 MW-

2017; 20000 MW-20222017; 20000 MW-2022 To create favorable conditions for solar To create favorable conditions for solar

manufacturing capabilitymanufacturing capability To support off grid applications – 1000 MW To support off grid applications – 1000 MW

by 2017; 2000 MW-2022by 2017; 2000 MW-2022 To support this To support this

: Solar PO, REC, dedicated buyer-NVVN, fiscal : Solar PO, REC, dedicated buyer-NVVN, fiscal incentives, R & D incentives, R & D

IV RE business and IV RE business and research opportunities & research opportunities &

partnerships partnerships Well established legal system and Well established legal system and

financial marketsfinancial markets Large technically qualified Large technically qualified

workforce workforce Enabling policy regimeEnabling policy regime Many market opportunitiesMany market opportunities

Sustainable BuildingsSustainable Buildings Distributed GenerationDistributed Generation SMEsSMEs

Potential Indian Partners Potential Indian Partners (see (see www.mnre.gov.in)www.mnre.gov.in)

ConclusionConclusionIndia has a rapidly growing power India has a rapidly growing power

sector with a vibrant renewable sector with a vibrant renewable energy marketenergy market

− Australia already exports coking and thermal Australia already exports coking and thermal coal; LNG; will only increase over time.coal; LNG; will only increase over time.

− RE beckonsRE beckons− Estimated total investments in renewable Estimated total investments in renewable

energy projects estimated to be > US$ 10 energy projects estimated to be > US$ 10 billion in next 3-5 years.billion in next 3-5 years.

− Many BOP opportunities available through Many BOP opportunities available through decentralized systemsdecentralized systems

− Solar power costs are expected to fall to Solar power costs are expected to fall to grid parity by 2022; and to coal thermal grid parity by 2022; and to coal thermal power parity by 2030 through aggressive power parity by 2030 through aggressive supportive policiessupportive policies

− Pro investor and R & D friendly policy Pro investor and R & D friendly policy regimes in placeregimes in place

Thank you Thank you