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Presentation on Renewable Energy Projects (Wind Power) on 16 th April’10 by Mr Deepak Sangal, Dy. General Manager (Tender Business), Suzlon Energy Ltd. National Conference on Project Finance Management for Energy Sector Organised by UPES Dehradun

Presentation on Renewable Energy Projects (Wind Power)

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Presentation on Renewable Energy Projects (Wind Power) on 16th April’10 by Mr Deepak Sangal, Dy. General Manager (Tender Business), Suzlon Energy Ltd.

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Page 1: Presentation on Renewable Energy Projects (Wind Power)

Presentation on Renewable Energy Projects (Wind Power)

on 16th April’10

by Mr Deepak Sangal, Dy. General Manager (Tender Business),

Suzlon Energy Ltd.

National Conference on Project Finance

Management for Energy Sector

Organised by UPES Dehradun

Page 2: Presentation on Renewable Energy Projects (Wind Power)

Renewable Energy Technology

• Wind Energy : Represents 70% of total RE installed capacity, Matured /

commercially viable, Organized industry, End to End Solution, Low Gestation

period, all major players have presence in India.

• Solar (PV + Thermal) – Sunrise sector in RE

- Currently burdened with high capital costs, Big Players venturing, lack of

operational systems, with new tariff for solar mission; prospects promising.

• Small hydro – Oldest RE source, Limited resources, high gestation period.

• Bagasse Co generation / Biomass – Slow, but promising, Fuel Linkages are a

major concern for Biomass project.

Page 3: Presentation on Renewable Energy Projects (Wind Power)

Why Renewable Energy

• “Availability of Energy on a long term basis” a sacrosanct part to realise economic growth

– Fossil fuel depleting to fuel the future needs of Developing Economies

• Fossil based economy : Rising crude oil prices – May touch more than $100 per barrel according to several

estimates

• Important to take into account the much required ‘Energy Security’

• Above all an important mitigation option for stabilizing ‘Green House Gases’

Page 4: Presentation on Renewable Energy Projects (Wind Power)

Set-up cost

Running cost

Technology Maturity

Proven Installed-base

End-to-end Solutions

Why go with the wind

Wind has been the largest & most preferred RE source because of its scalability to GW sized projects and the proven techno-commercial viability amongst the various renewable energy options available today

Wind Solar Biomass Small Hydro

Low running cost as fuel (Wind) is available FREE for life

Proven over 2 decadesFaster project execution (within 6-9 months)

Hassle-free end to end solution is available in wind

power

161GW installed globally which is 43% of global RE

capacity

Competitive set-up cost& faster payback

Page 5: Presentation on Renewable Energy Projects (Wind Power)

Science of Customize Product

Wind Energy

Q - Air Density, V- Wind Velocity, D- Wind Turbine Rotor Diameter.

Page 6: Presentation on Renewable Energy Projects (Wind Power)

• Installations in 2009 : 38,103 MW (35% YoY growth)

• Cumulative installations: 160,084 MW

Cumulative installed capacity in MW Cumulative installed capacity in MW Cumulative installed capacity in MW Cumulative installed capacity in MW

Source : BTM Consult ApS World Market Update 2009*

160,084

122,158

94,005

74,306

59,399

47,912

CY04 CY05 CY06 CY07 CY08 CY09

CAGR 36.1%

Wind Energy: Global Scenario

1,172

1,838

2,331

13,972

8,612

India

Germany

Spain

China

USA

2009 Capacity Addition (in MW)2009 Capacity Addition (in MW)Capacity Addition (in MW) 2009Capacity Addition (in MW) 2009

Page 7: Presentation on Renewable Energy Projects (Wind Power)

Top-10 Suppliers in 2009

ENERCON (GE) 8.5%

GOLDWIND (PRC) 7.2%

DONGFANG (PRC) 6.5%

Others 18.5%

REPOWER (GE) 3.4%

SIEMENS (DK) 5.9%

SUZLON (IND) 6.4%

GAMESA (ES) 6.7%

VESTAS (DK) 12.5%

GE WIND (US) 12.4%

SINOVEL (PRC) 9.2%

Source: BTM Consult ApS - March 2010

% of the total market 38,103MW

Global Market Share – Top Suppliers

SUZLON has grown to be 3rd largest* WTG Manufacturer in the World in 15 Years

Page 8: Presentation on Renewable Energy Projects (Wind Power)

Wind Potential - India

Estimated Wind Power Potential in India

State Gross Potential (MW)

Installed Capacity (MW)

Capacity Add. in 09-10 (MW)

Karnataka 11,531 1649.25 140.7

Gujarat 10,645 1880.11 295.8

Andhra Pradesh 8968 122.50 13.6

Tamil Nadu 5530 4743.88 616

Rajasthan 4858 938 350

Maharashtra 4584 2116.98 143.1

Madhya Pradesh 1019 236.4 16.6

Kerala 1171 45.6 0.8

Orissa 255 - -

West Bengal   - 1.10 -

Others  - 3.20 -

TOTAL (All India) 48,561 11737.02 1576.6

Note :Gross potential is based on assuming 3% of land availability for wind power generation in potential areas. (Source: MNRE (Erstwhile MNES))

Page 9: Presentation on Renewable Energy Projects (Wind Power)

India Market TotalSuzlon’s Share

Leading with nearly 50% market share each year over a decade

SUZLON Enercon

No. 1 for 11th Year in a row (H1 FY09-10 capacity addition in India)

Market maker and market leader in India

RRB All OthersVestas

YoY

Cap

acity

Add

ition

(M

W)

YoY

Mar

ket S

hare

Cap

acity

Add

ed (

MW

)

Way Ahead – Suzlon Milestones

Page 10: Presentation on Renewable Energy Projects (Wind Power)

Power sector Challenges in India

*Ref: WISE & GWEC Report and CII Report on Power Sector & * Wikipedia 2010 Statistics on GHG emissions

Thermal 63.2%

Large Hydro 25%

Nuclear2.8%

Renewable9%

Wind 71%

10.2GW

Other RE29%

Capacity Augmentation

•Current capacity:

more than150 GW

•Peak Shortage: 13.8%

•Addition Req. by 2020: 150

GW

Sustaining Fuel Mix

Fuel Mix for Power

Generation:

Coal :52%, Hydro:25%,

Gas & Oil:11%, RE:9%,

Nuclear:3%

Climate Change

India is the 4th largest

emitter of GHG gases

globally (total emission

of 1293 MT CO2e* pa)

Solution : Wind Power

•Proven ability & readiness to quickly

augment capacities

•Lowers burden on fossil fuel need

•Mitigation of climate change by

substantial CO2 displacement

Page 11: Presentation on Renewable Energy Projects (Wind Power)

Compelling Industry Growth Dynamics

Cost competitiveness

and hedging

Cost competitiveness

and hedging

• Improvement in yields (cost/ kWh)

• Cost / kWh of generation: US$ 0.03 - 0.06

• Wind Energy directly competing with conventional power

• Frozen lifecycle power cost for utilities

• Improvement in yields (cost/ kWh)

• Cost / kWh of generation: US$ 0.03 - 0.06

• Wind Energy directly competing with conventional power

• Frozen lifecycle power cost for utilities

Climate Changeand

Global Warming

Climate Changeand

Global Warming

Aggressive global targets

• Kyoto Protocol: CO2 emissions to reduce by 5.2% of 1990s levels by 2012

• EU declaration: 20% from RE by 2020

• US: 21 States with 10% to 20% RPS mandates

• China targets 100,000 MW from RE by 2020

• India: 10 States with 2% to 10% RPO mandates

Aggressive global targets

• Kyoto Protocol: CO2 emissions to reduce by 5.2% of 1990s levels by 2012

• EU declaration: 20% from RE by 2020

• US: 21 States with 10% to 20% RPS mandates

• China targets 100,000 MW from RE by 2020

• India: 10 States with 2% to 10% RPO mandates

Energy SecurityEnergy Security

• Hedge against geo-political risks - local and secured supply

• No risk of fuel price volatility

• Socially, ecologically and economically sustainable growth

• Hedge against geo-political risks - local and secured supply

• No risk of fuel price volatility

• Socially, ecologically and economically sustainable growth

Increased Electricity Demand

Increased Electricity Demand

• Energy - key to economic growth in developing countries (India, China etc. require all sources quickly to bridge gap)

• Wind’s global electricity generation contribution expected toincrease from 0.82% in 2006 to 3.4% in 2030

• ,Energy - key to economic growth in developing countries (India(China etc. require all sources quickly to bridge gap

• Wind’s global electricity generation contribution expected to increase from 0.82% in 2006 to 3.4% in 2030

Zero carbon solution

Zero carbon solution

Local availability

Local availability

Abundant resource

Abundant resource

Zero fuel cost

Zero fuel cost

ConcernConcern DemandDemand CatalystsCatalysts

Page 12: Presentation on Renewable Energy Projects (Wind Power)

Wind Energy Development

Wind Resource Assessment and

Estimation of Potential

Conducive Policy & Regulatory Framework

Framework: Stakeholders -

Technology Providers, Investors & Financiers

Infrastructure for Grid Integration & Power Evacuation

Page 13: Presentation on Renewable Energy Projects (Wind Power)

Policy & Regulations Pushing Wind Energy In India

Central Government • 80% accelerated depreciation• Sec 80 IA benefits under IT Act*.• Generation Based Incentives

State Level frameworks • Tariffs for sell to utility • Wheeling & banking framework• RPS/RPO framework under Section 86(i)e of EA 2003

Global Framework• Carbon credits under the Kyoto Protocol

Page 14: Presentation on Renewable Energy Projects (Wind Power)

The End to End Solutions

• Single source solutions:from land & infrastructure to supply of WTG, project commissioning & life cycle operation & maintenance

• Active assistance for – Liaison activities, regulatoryapprovals, loan processing

• Customer time & manpower resources are not blocked

Page 15: Presentation on Renewable Energy Projects (Wind Power)

Project Cycle

Infrastructure & access road development

Movement of material at siteTurbine erection and commissioning

Scientific wind study at location using a met-mast

Sourcing the suitable land –bank for project

Ensuring required sub-station capacity for enabling power evacuation to nearby transmission grid

Page 16: Presentation on Renewable Energy Projects (Wind Power)

Transmission Process of Wind Energy

Page 17: Presentation on Renewable Energy Projects (Wind Power)

Captive : How it happens

Wind farm

Metering

~100 units~X units deduction as

Wheeling & transmission charges

Consumer

Wind as Captive unit

~(100-X) units as credit in monthly bill

Investment by industrial/commercial unit

For captive consumption Savings/earnings•HT bill•Electricity duty •Demand cut Other benefits

•Tax benefits through accelerated depreciation •Section 80 IA benefits

Page 18: Presentation on Renewable Energy Projects (Wind Power)

Year 2006 2007 2008Total MW supplied 16,007 22,181 31,281Product (Size range)

"Small WTGs" <750 kW 2.4% 1.3% 0.5%"One-MW " 750-1499 kW 31.0% 29.8% 13.1%"Mainstream" 1500-2500 kW 62.2% 63.7% 80.4%"Multi-MW Class" >2500 kW 4.3% 5.3% 6.0%Total 100.0% 100.0% 100.0%Source: BTM Consult ApS - March 2009

% of total MW

Segmentation of Product Size

Page 19: Presentation on Renewable Energy Projects (Wind Power)

Wind : Market framework

InvestorInvestor

FinancierFinancier

End to End Solution Provider

Equipment Supply, EPC, VAS Life Cycle Asset Management

End to End Solution Provider

Equipment Supply, EPC, VAS Life Cycle Asset Management

Local Power Utility

Local Power Utility

State ERC &

Nodal Agency

State ERC &

Nodal Agency

Key Stakeholders

Power Trading Options

Sale / Wheeling ofPower GeneratedSale / Wheeling ofPower Generated

Fiscal Incentives – IT Exemption (S80IA),

Acc. Depreciation / GBI

Fiscal Incentives – IT Exemption (S80IA),

Acc. Depreciation / GBI

Sale of CERs / VERs under Carbon Trading Sale of CERs / VERs under Carbon Trading

Multiple Revenue Streams

Procurement by Local Utilities at a committed

feed-in tariff under long term PPA

Procurement by Local Utilities at a committed

feed-in tariff under long term PPA

Allowance of set-off for captive usage under energy wheeling PPA

Allowance of set-off for captive usage under energy wheeling PPA

Page 20: Presentation on Renewable Energy Projects (Wind Power)

State Policies In India

State RPO (%)

Specified

PPA rate per KWH in INR – PPA

tenure

Validity of

PPA

Wheeling &

Transmission

Chg.

Rajasthan 7.5% 3.83 levelized tariff 20 15-17%

M. P. 10% 4.03 reducing at 17 paisa

every year fixed at 3.36 *

20 2% + Trans.

Gujarat 2% 3.56 20 10%+ trans.

Maharashtr

a

3-6% 3.50 + escalation of 15 paisa

for next 12 years*

13 10-27%

(linked with

voltage level)

Karnataka 10% 3.70 10 5% +2%

A.P. 5% 3.50 5 Yr. -

Tamilnadu 10% 3.39 20 Yr. 5%** Tariff under revision

Page 21: Presentation on Renewable Energy Projects (Wind Power)

Widest Product Range

600 kW – 1.25 MW 1.25 – 1.5 MW 1.5 - 2.5 MW 2.5 – 3.0 MW

India + South AsiaChina

USA/ Australia/ Brazil Europe

SuzlonREpower *

3.0 – 6.0 MW

Products spanning all capacities - sub-MW to Multi-MW turbines

Products spanning technologies - variable, semi-variable and fixed speeds

Product variants spanning climatic conditions and grid requirements

Ability to supply large volumes across various geographies

Offshore

*

* Suzlon Group controls or influences, either directly or through voting pool agreements, approximately 89% of the votes in REpower

Page 22: Presentation on Renewable Energy Projects (Wind Power)

  Sale to Electricity Board Captive

Model S - 82 S - 82

No. of Turbines 1 1

Project Size (kW) 1500 1500

Commissioning Period (in months) 4 - 6 4 – 6

Cost Per WTG (Rs. Lacs) 950 950

Service Tax Extra Per WTG (Rs. Lacs) AT ACTUAL

Project Funding thru’ FIs 70:30 70:30

Free Warranty Period 1 Year 1 Year

O & M Charges( Rs.Lacs) 17 17

Escalation 5% 5%

Generation @ controller @100% Grid per WTG 35 to 40 Lacs 35 to 40 Lacs

Project IRR (%) 19% to 22% 18% to 40%

Project Payback in Year 3 to 6 1 to 5

State Tarriff Rs./kwh 3.39 to 4.03 4 to 11

PPA / WBA State utility / DISCOM

Wind Power Project Snapshot

Page 23: Presentation on Renewable Energy Projects (Wind Power)

Major Clientele - India

• PRIVATE

• DLF Limited – 217.50 MW

• MSPL Limited – 133.75 MW

• Gujarat NRE Coke – 87.50 MW

• Tata Group – 110.00 MW

• Ruchi Group - 72.95 MW

• Reliance Energy – 42.00 MW

• Bajaj Group – 75.00 MW

• Aditya Birla Group – 75.00 MW

• J. P. Group – 50.00 MW

• Gujarat Flouro Ltd. – 42.00 MW

• K.S. Oil Ltd. – 42.00 MW

• British Petroleum – 40.00 MW

• Aarvee Denims – 21.00 MW

• Era Group – 20.50 MW

• KRBL – 37.70 MW

• STATE & CENTRAL PSUS

• Gujarat State Petroleum Corp. Ltd. – 105.00 MW

• GMDC Ltd. – 100.00 MW

• Raj. State Mines & Minerals Ltd. – 91.30 MW

• Gujarat Alkalis & Chemicals Ltd. – 83.75 MW

• Oil & Natural Gas Corporation Ltd. – 51.00 MW

• Hindustan Petrol Corporation Ltd. – 50.50 MW Guj. State Fertilizers & Chem. Ltd. – 40.00 MW

• Gujarat State Electricity Co. Ltd. – 40.00 MW

• Raj. Renewable Energy Corp Ltd. – 27.10 MW

• Indian Oil Corporation Ltd. – 21.00 MW

• Gujarat Narmada Fert. Corp. Ltd. – 21.00 MW Tamil Nadu News Prints Ltd. – 17.50 MW

• State Bank of India – 15.00 MW

• Integral Coach Factory – 10.50 MW

• National Mineral Dev. Corp. Ltd. – 10.50 MW

• Nuclear Power Corp. of India Ltd. – 10.00 MW

• Tirumala Tirupati Devasthanam - 06.00 MW

Page 24: Presentation on Renewable Energy Projects (Wind Power)

Inauguration Ceremony of ONGC

Shri R S Sharma – CMD - ONGC Inaugurating 50 MW Wind Power Project in Gujarat

Page 25: Presentation on Renewable Energy Projects (Wind Power)

Inauguration Ceremony of NMDC

Shri Rana Som – CMD - NMDC Inaugurating 10.50 MW Wind Power Project in Karnataka

Page 26: Presentation on Renewable Energy Projects (Wind Power)

Inauguration Ceremony of Indian oil

Shri Sarthak Behuria CMD IOCLinaugurating 21 MW Wind Power Project at Kutch Gujarat

Page 27: Presentation on Renewable Energy Projects (Wind Power)

Inauguration Ceremony of

Integral Coach Factory

Shri Sukhbir Singh – Member Electrical – Ministry of Railways Inaugurating 10.50 MW Wind Power Project in Tamil Nadu

Page 28: Presentation on Renewable Energy Projects (Wind Power)

Renewable: Towards Energy Independence

Priority to harness In ecologically sound manner

Priority to harness all sources within

our country

Priority towards Energy

generationFor sustainable growth, lets develop our world with the right social, economical, ecological balance

“Thank You”