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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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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
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.
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’
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
Science of Customize Product
Wind Energy
Q - Air Density, V- Wind Velocity, D- Wind Turbine Rotor Diameter.
• 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
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
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))
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
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
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
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
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
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
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
Transmission Process of Wind Energy
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
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
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
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
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
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
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
Inauguration Ceremony of ONGC
Shri R S Sharma – CMD - ONGC Inaugurating 50 MW Wind Power Project in Gujarat
Inauguration Ceremony of NMDC
Shri Rana Som – CMD - NMDC Inaugurating 10.50 MW Wind Power Project in Karnataka
Inauguration Ceremony of Indian oil
Shri Sarthak Behuria CMD IOCLinaugurating 21 MW Wind Power Project at Kutch Gujarat
Inauguration Ceremony of
Integral Coach Factory
Shri Sukhbir Singh – Member Electrical – Ministry of Railways Inaugurating 10.50 MW Wind Power Project in Tamil Nadu
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”