Wind power developments in India

Renewable and Sustainable Energy Reviews 48 (2015) 264–275

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Renewable and Sustainable Energy Reviews journal homepage: www.elsevier.com/locate/rser

Wind power developments in India Sanjay Kumar Kar a, Atul Sharma b,n a b

Department of Management Studies, Rajiv Gandhi Institute of Petroleum Technology (RGIPT), Rae Bareli 229316, U.P., India Non-Conventional Energy Laboratory, Rajiv Gandhi Institute of Petroleum Technology, Rae Bareli 229316, U.P., India

art ic l e i nf o

a b s t r a c t

Article history: Received 12 September 2014 Received in revised form 17 February 2015 Accepted 26 March 2015

The insatiable appetite for non-renewable fossil fuels in the past has resulted in a plethora of anthropogenic climate changes and pollution across the globe, causing serious threats to human beings and the environment. To avoid this contention, greater use of wind energy could be the solution for economic growth and sustainable environment, in the long run. This paper discusses the ways in which India has started the growth of wind energy and the country’s potential to expand its contribution to meet ever-increasing energy needs. The paper lucidly presents India’s progress to become the top five wind energy producers in the world. This paper also discusses the major achievements, programs, policy, and incentives for the installation of wind power in India. Opportunities and challenges have been discussed along with the ways to remove barriers to achieve higher growth. & 2015 Elsevier Ltd. All rights reserved.

Keywords: Renewable energy Wind energy Policy Incentive

Contents 1. 2. 3.

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Worldwide status of wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wind energy developments in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1. Wind energy potential in India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2. Growth of wind energy in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3. Wind market developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Wind energy programs and policies in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1. Wind programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2. Wind policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3. Incentive schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Benefits of wind power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Barriers to higher growth of wind power in India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1. Uneven spread of wind resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2. Insufficiency and high cost of evacuation infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3. Regulatory issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4. Project risk and financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5. Land availability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Strategic initiatives needed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1. Strengthening policy framing and implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2. Enhancing R&D activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3. Developing appropriate renewable markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4. Integrating renewable with national power grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5. Easy access to finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

n

Corresponding author. E-mail addresses: [email protected] (S.K. Kar), [email protected] (A. Sharma).

http://dx.doi.org/10.1016/j.rser.2015.03.095 1364-0321/& 2015 Elsevier Ltd. All rights reserved.

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1. Introduction Energy is the backbone of a country’s economy and plays a significant role in the growth and development of any country. During the recent years, the rate at which energy demand has grown in India is one of the fastest in the world. This has happened due to stronger economic growth of an average of 6.4 percent during 1990–2010 behind China’s average of growth 10.4 percent per year. Historically, the fossil fuel-based energy dominated the energy supply in India and continued dominance is a reality for the next couple of decades. Usage of fossil fuel has contributed to environmental degradation, so switching to an alternate renewable form of energy is the remedy. Renewable sources of energy such as wind, solar, biomass, and others offer an environment-friendly and sustainable option. The rising cost of fossil fuel, such as imported crude oil, coal, natural gas, and the shortage of domestic natural gas and desired quality coal, along with progressive government policies and programs to support renewable energy, will certainly allow renewable energy to compete with conventional fuel for producing electricity in India. Recently the Planning Commission released a report on ‘low carbon strategies for inclusive growth’ and the recommendations are strongly in favor of renewable energy. The cumulative costs of low carbon strategies have been estimated to be around $834 billion at 2011 prices, over the two decades between 2010 and 2030 [1]. In addition to the above points, greenhouse gases and other associated harmful gaseous emissions such as SO2 and various oxides of nitrogen and fine particles, which are byproducts of fossil fuel use, lead to environmental damage, poor health, and early death [2], which could strongly push the use of the renewable in all possible areas in India. Increased use of renewable may lead to reduced dependency on imported fossil fuel and help India move toward much-needed self-sufficiency and energy independence. Renewable energy, in general, and wind energy, in particular, produce significantly lower environmental impact than conventional fossil fuel-based energy. The use of wind energy for the sustainable growth of the society has a tremendous scope, as it is abundant, available free as a fuel, and can be scaled up or down based on the requirements. One of the hindrances in higher utilization of wind energy is about the installation cost, nowadays, which one can cover up easily as the payback period has reduced significantly owing to the improvement in technology and progressive renewable energy policies. India is blessed with plenty of alternate energy sources such as solar, wind, hydro, and biomass. However, as on May 31, 2014, the total cumulative contribution of renewable energy (excluding large hydro) was about 32.8 GW; out of which wind contributed about 21.26 GW (65.85 percent). This is an indicator that wind has been playing the most important role in renewable market developments in India. India occupies the fifth position in the

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world, after China, U.S., Germany, and Spain in generation of wind power. In terms of wind capacity addition in 2013, India was placed at fourth position just behind the UK. China was placed at the top, followed by Germany. India is one of the fastest growing, developing countries, and it needs more energy to sustain higher economic growth rate. Overdependence on imported fossil fuel has been adversely impacting balance of trade, balance of payment, and possibly economic growth. To reduce the magnitude of the negative impact on the economy and the environment, indigenous sources of energy, especially renewable energy, should be given the necessary impetus. The importance of renewable energy was recognized in the country in the early 1970s. But during 1970–2000, the focus was mostly on large hydropower projects. Therefore, the share of renewable energy was dominated by hydropower during the above-mentioned period. Over the last decade, all possible sources of renewable energy have been explored and promoted with necessary policy incentives. Today, India has many large programs for renewable energy. Many programs are targeted at producer and distributor levels, especially in wind and solar sectors. Numerous programs are running both at central and state levels to encourage penetration of solar and biomass targeted at the household and small-scale installation level. Due to several government initiatives, quite a large number of renewable energy systems and devices are now commercially viable and available in the market. It is to be noted that the development of wind power in India began in the 1990s and has significantly increased in the last few years. India has played an important role in the World’s Wind Energy market. Wind power programs were initiated toward the end of the sixth plan in 1983–1984, and by 2005 India became the fourth largest wind market in the world. India is placed in the fifth position in the world with an installed capacity of 237.7 GW in the electric sector; out of which 29.46 GW is contributed by the new and renewable energy— with a share of 12.39 percent of total installed capacity up to February 28, 2014 (Table 1). Based on the data presented in Table 1, the Southern region is leading with a renewable share of 22.5 percent followed by the Islands and Western region. In terms of renewable share, the Eastern region is the worst performer with a negligible share of 1.4 percent, much lower than the national average of 12.4 percent [3]. This could be due to various reasons such as lack of wind potential and limited exploitation of other renewable sources such as solar, small hydro, and biomass.

2. Worldwide status of wind energy Wind power has now established itself as a mainstream electricity generation source and plays a central role in an increasing number of countries, in immediate and longer term energy plans and policy. In the recent past, in many markets around the world, wind power had

Table 1 All India installed electricity generation capacity (MW) as on February 28, 2014 [3]. Source: Author’s analysis based on GoI, CEA, 2014. Thermal Region

Coal

Gas

Diesel

Northern Western Southern Eastern North-East Islands All India Share (%)

35,283.5 54,069.51 26,582.5 24,727.88 60 0 140,723.4 59.2

5,281.26 9,739.31 4,962.78 190 1,208 0 21,381.35 9.0

12.99 17.48 939.32 17.2 142.74 70.02 1199.75 0.5

Thermal total

Nuclear

Hydro

RES

Grand total

Share (%) of RES

40,577.75 63,826.3 32,484.6 24,935.08 1,410.74 70.02 163,304.5 68.7

1620 1840 1320 0 0 0 4780 2.0

15,994.75 7,447.5 11,398.03 4,113.12 1,242 0 40,195.4 16.9

5,729.62 9,925.19 13,127.33 417.41 252.65 10.35 29,462.55 12.4

63,922.12 83,038.99 58,329.96 29,465.61 2,905.39 80.37 23,7742.44 100.0

9.0 12.0 22.5 1.4 8.7 12.9 12.4

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been making steady inroads by establishing cost competitiveness, as the technology and its implementation are constantly improving. According to the Global Wind Energy Council (GWEC) the world’s cumulative generation capacity was about 318,105 MW in 2013, an increase of about 12.3 percent as compared to the installed capacity at the end of 2012 (283,194 MW). At the end of 2013, 24 countries had installed more than 1000 MW, compared to 22 in 2012 [4]. One of the countries which catch the attention of the investors, analysts, researchers, and global agencies is China. The Chinese government has identified wind energy as one of the most promising alternate energy sources, and they have made flexible policies and regulations to attract investors in the wind energy sector. Due to that China is now leading worldwide in this sector with an installed capacity of 91,412 MW followed by the USA (61,091 MW). Fig. 1 shows the global cumulative installed wind capacity from 2002 to 2013. Table 2 shows the cumulative installed capacity of top ten countries along with CAGR during 2003–2013 [5]. It is evident that the top ten countries had 84.8 percent of the global installation and top five countries had 72.5 percent of the world share at the end of 2013. During the period under consideration, China, the United States, Germany, Spain, and India played the most important role as the top five wind producers. This is an indication that the top five wind power producers could shape the global energy policy, more specifically renewable energy policies.

3. Wind energy developments in India India’s economic growth, increasing prosperity, rapid urbanization, ever-expanding population with rising disposable income, and industrialization necessitate more energy, particularly electricity. Therefore, there is an emerging electricity supply-demand imbalance across the country. Already, official peak-load deficits are in the magnitude of 12.7 percent and expected to rise in the near future. In the context of electricity deficits, demand for diesel and furnace oil is going up in various segments such as industrial, commercial, and institutional. Shortage of electricity in rural areas certainly increases chances of kerosene consumption, leading to huge pressure on the exchequer in the form of high fuel subsidy. Increased use of imported fossil fuel creates a case for high import dependence and trade deficits. At the current energy requirement growth rate, India needs to have around 372 GW of cumulative installed capacity by 2022 to meet the growing demand for electricity. To achieve the above target 15–18 GW per year of capacity addition will be required. A significant chunk of the new capacity addition will be through renewable sources. The country has set a target of 15 GW grid-connected wind power during the period of April 2012 to March 2017, which will be extended up to 25 GW for the next five-year period [6]. This means India will have about 60 GW of cumulative installed wind capacity by 2022. It is estimated that by 2030 installed wind capacity, including offshore, could reach 191 GW [7]. If this estimated figure (191 GW)

350000

Installed wind power capacity (MW)

318117

300000

283194

237669

250000 194390

200000 158738

150000 120291 93820

100000

50000

74052

39431

47620

59061

0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Year Fig. 1. Global cumulative installed wind capacity (2003–2013).

Table 2 Top ten countries with cumulative installed wind power capacity (MW) in the world (2003–2013). Source: Analyzed using data available at http://www.earth-policy.org/data_center/C23 and other published sources. Year

China

U.S.

Germany

Spain

India

U.K.

Italy

France

Canada

Denmark

Top ten

World

Share of top ten (%)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CAGR

568 765 1,272 2,599 5,910 12,020 25,805 44,733 62,364 75,324 91,424 66.2%

6,372 6,725 9,149 11,575 16,824 25,076 35,086 40,298 46,929 60,007 61,091 25.4%

14,609 16,629 18,415 20,578 22,194 23,826 25,673 27,097 29,071 31,270 34,250 8.9%

6,203 8,263 10,027 11,623 15,145 16,689 19,160 20,623 21,674 22,784 22,959 14.0%

2,125 3,000 4,430 6,270 7,845 9,655 10,926 13,065 16,084 18,421 20,150 25.2%

648 888 1,353 1,968 2,428 3,161 4,257 5,259 6,593 8,649 10,531 32.2%

913 1255 1718 2123 2726 3736 4849 5797 6878 8118 8552 25.1%

253 390 757 1,711 2,495 3,577 4,713 5,977 6,809 7,623 8,254 41.7%

322 444 684 1,460 1,846 2,369 3,319 4,008 5,265 6,204 7,803 37.5%

3115 3123 3127 3136 3136 3158 3468 3801 3956 4162 4772 4.4%

35,128 41,482 50,932 63,043 80,549 103,267 137,256 170,658 205,623 242,562 269,786 22.6%

39,431 47,620 59,091 73,938 93,889 120,624 158,975 198,001 238,126 283,194 318,117 23.2%

89.1 87.1 86.2 85.3 85.8 85.6 86.3 86.2 86.4 85.7 84.8

S.K. Kar, A. Sharma / Renewable and Sustainable Energy Reviews 48 (2015) 264–275

is to be believed, then India needs to install about 131 GW of wind power during 2022–2030. Going by the history of wind capacity addition in India, 191 GW by 2030 seems to be far-fetched and a distant dream. However, such ambitious growth trajectory is not unprecedented. China has achieved remarkable growth in capacity addition during 2003–2013. Therefore, India may take a leaf out of China’s growth story to achieve the most ambitious target. First time in 2011, India’s wind industry had installed more than 3 GW of new capacity followed by capacity addition of 2.3 GW and 1.7 GW in 2012 and 2013, respectively. India had a decent compounded annual growth rate (CAGR) of 25 percent during

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2003–2013 and the growth rate is expected to be higher in the coming decade. Wind energy development in India has been relatively slow compared to other countries like China, the United States, Germany, and Spain. Until 2007, India with a wind-installed capacity of 7845 MW was the leading wind power producer in Asia. By the end of 2008, China overtook India with a massive capacity addition of 6.1 GW, which is almost the same as the cumulative capacity addition by India until 2006 (6.2 GW). Wind energy developments are not uniform across the country as the wind resources are unevenly distributed. The following section discusses the wind potential, growth, and market developments in the country.

Table 3 Estimated wind potential in India [8]. States/UTs

Andaman & Nicobar Andhra Pradesh Arunachal Pradesha Assama Bihar Chhattisgarha Diu Damn Gujarat Haryana Himachal Pradesha Jharkhand Jammu & Kashmira Karnataka Kerala Lakshadweep Madhya Pradesh Maharashtra Manipura Meghalayaa Nagalanda Orissa Pondicherry Rajasthan Sikkima Tamil Nadu Uttarakhanda Uttar Pradesha West Bengala Total a

3.1. Wind energy potential in India

Estimated potential (MW) at 50 m

at 80 m

2 5,394 201 53 – 23 – 10,609 – 20 – 5,311 8,591 790 16 920 5,439 7 44 3 910 – 5,005 98 5,374 161 137 22 49,130

365 14,497 236 112 144 314 4 35,071 93 64 91 5,685 13,593 837 16 2,931 5,961 56 82 16 1,384 120 5,050 98 14,152 534 1,260 22 102,788

Wind potential has yet to be validated with actual measurements.

The Center for Wind Energy Technology (C-WET) first estimated the onshore wind energy potential in India at around 45 GW and was recently increased to 49.10 GW at 50-m height and 102.8 GW at 80-m height. The estimated wind potential in each state of India is shown in Table 3 [8]. A study (2013) conducted by Power Grid Corporation of India suggests that onshore wind potential to the tune of 29 GW exists in the desert areas like The Thar, Rann of Kutch, and Ladakh in India. According to the MNRE estimates, India has a potential of 350 GW of offshore wind energy capacity [7]. Therefore, it can be inferred from the above studies that India has a wind potential of about 480 GW. The total number of wind monitoring stations (WMSs) established in the country by MNRE/C-WET is 790 and by the end of July 2014, the number of stations in operation was 151. The operational WMSs are distributed in Maharashtra (28), undivided Andhra Pradesh (28), Karnataka (24), Tamil Nadu (18), and Gujarat (13). The rest are in other states and union territories.

3.2. Growth of wind energy in India Table 4 shows state-wise wind installed capacity in India. Tamil Nadu has an installed capacity of 7276 MW followed by Maharashtra (4098 MW), Gujarat (3414 MW), Rajasthan (2820 MW), and Karnataka (2409 MW). It is visible that the contribution of wind has been growing in India, but the growth is rather slow.

Table 4 Wind power installed capacity (MW) in India. Source: Compiled from various published sources. State

Andhra Pradesh

Gujarat Karnataka Kerala Madhya Pradesh

Maharashtra Rajasthan Tamil Nadu

West Bengal

Others Total

Up to March ’2002 2002–2003 2003–2004 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 2009–2010 2010–2011 2011–2012 2012–2013 By the end of May 14 Potential Actual developments

93.2 0 6.2 21.8 0.45 0.8 0 0 13.6 55.4 54.1 202.1 753 14,497 5%

181.4 6.2 28.9 51.5 84.6 283.95 616.36 313.6 197.1 312.8 789.9 208.3 3,414 35,071 10%

400.3 2 6.2 48.8 545.1 485.3 268.15 183 138.9 239.1 416.5 288.5 4098 5961 69%

1.1 0 0 0 0 0 0 0 0 0 0 0 1.1 22 5%

3.2 0 0 0 0 0 0 0 0 0 0 0 3.2 10674 0.03%

69.3 55.6 84.9 201.5 143.8 265.95 190.3 316 145.4 254.1 206.7 201.7 2,409 13,593 18%

2 0 0 0 0 0 8.5 16.5 0.8 7.4 0 0 55 837 7%

23.2 0 0 6.3 11.4 16.4 130.39 25.1 16.6 46.5 100.5 9.6 439 2931 15%

16.1 44.6 117.8 106.3 73.27 111.9 68.95 199.6 350 436.7 545.7 614 2820 5050 56%

877 133.6 371.2 675.5 857.55 577.9 380.67 431.1 602.2 997.4 1,083.5 174.6 7,276 14,152 51%

Note: As the data collected from different sources and period of reference may differ and data may not match with the earlier tables.

1666.8 242 615.2 1,111.7 1,716.17 1,742.2 1,663.32 1,484.9 1,464.6 2,349.4 3,196.9 1,698.8 102,788 21%

Cumulative

1,908.8 2,524 3,635.7 5,351.87 7,094.07 8,757.39 10,420.71 11,905.61 14,255.01 17,451.91 19,150.71 21,268.3

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3.3. Wind market developments Wind market development depends on several factors such as availability of wind resources [9], land, access to advanced technology, component manufacturing facility and producers, capacity utilization factor [10], relevant government policy, incentives for wind producers [11] and component manufacturers, skilled manpower, and supporting distribution infrastructure [9]. As and when required the MNRE issues guidelines to streamline developments and facilitate healthy and orderly growth of the wind power sector in the country. For an optimal generation of energy from the wind power projects, high-quality components like the model wind turbines are made locally available. Therefore, the government notifies the certified manufacturers by checking the product quality through testing and certification by independent agencies. As of February 19, 2014 in India there were 33 government-certified wind turbine manufacturers to produce the model with a range of 250–2625 kW. The average size of installed wind turbines was about 645 kW in 2010. In 2011, the average size of wind turbines installed in Tamil Nadu was 596 kW. The current manufacturing capacity indicates that the size of turbines is increasing and at least 11 manufacturers are producing turbine sizes more than 2000 kW. Recently one of the wind turbine manufacturers, Gamesa India, received an order from Greenko (India) to supply, install, and commission 80 G97—2.0 MW turbines by June 2015. This indicates that future demand will be driven by large size and more efficient wind turbines in India.

4. Wind energy programs and policies in India 4.1. Wind programs Energy self-sufficiency was identified as the major driver for new and renewable energy in the country in the wake of the two oil shocks of the 1970s. The sudden increase in the prices of oil, uncertainties associated with its supply, and the adverse impact on the balances of payments position led to the establishment of the Commission for Additional Sources of Energy (CASE) in the Department of Science and Technology in March 1981. The Commission was responsible for the formulation of policies and their implementation, creation of programs for the development

of new and renewable energy, and coordinating and intensifying R&D in the sector. In 1982, a new department, i.e., Department of Non-conventional Energy Sources (DNES), which incorporated CASE, was created in the Ministry of Energy. A decade later, in 1992, DNES became the Ministry of Non-conventional Energy Sources. In October 2006, the Ministry was rechristened as the Ministry of New and Renewable Energy, which is the nodal Ministry of the Government of India for all matters relating to new and renewable energy. The broad aim of the Ministry is to develop and deploy new and renewable energy for supplementing the energy requirements of the country and ensuring long-term energy security [12]. Over the next decade, India will have to invest in options that not only provide energy security, but also cost-effective tools for eradicating energy poverty across the board. India, as part of its obligations to the United Nations climate convention (UNFCCC), released a National Action Plan on Climate Change (NAPCC) in June 2008 that laid out the government’s vision and mission with specific strategies for a sustainable and clean energy future. The NAPCC outlined its implementation strategy through the establishment of eight national missions, but this mission is not having any large agenda for the wind energy. The Indian government has finalized the National Solar Mission, outlining ambitious longterm plans to attain an installed solar power generation capacity of 20 GW by the year 2022, which would be increased to 100 GW by the year 2030 and further to 200 GW by the year 2050 [13]. Unlike other renewable sources like solar and biomass, there are no specific programs directed at wind. The primary reason behind the absence of wind-specific programs is that the wind does not target individual consumers. Despite that wind is the leading renewable source of power connected to the grid with almost twice the size of all other renewable sources such as solar, small hydro, and biomass. Fig. 2 is showing the year-wise installation of wind energy since 2002 up to May 31, 2014.

4.2. Wind policies Wind policy framing in India happens at the central and state levels. The central government through the MNRE and its agencies develop federal level policies, and the states are allowed to develop their own operational level policies and tactics. Over the years, the

25000

Installed wind power capacity (MW)

21268

20000

19051 17361

15000

14156 11807 10242

10000

8757 7094 5352

5000

3636 1666.8

1908.8

2524

0 Up to Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 May-14 March Year 02

Fig. 2. Wind power growth in India (2002–2014).

S.K. Kar, A. Sharma / Renewable and Sustainable Energy Reviews 48 (2015) 264–275

onshore wind policy framework has been evolving with all possible advancements. However, the offshore wind seems to have been neglected, as the challenges of developing offshore wind are far more and more complex. Considering the high potential, and the nature and magnitude of the challenges, the offshore wind needs special attention and policy framing. In the recent times, the government duly acknowledged the importance of having a separate offshore wind energy policy. In order to boost the production of offshore wind, a National Offshore Wind Energy Authority (NOWA) will be set up soon for Offshore Wind Projects in the country. NOWA will carry out resource assessment and surveys in the Exclusive Economic Zones (EEZ) of the country, and simultaneously enter into contract with project developers for the development of offshore wind energy projects in the territorial water (12 nautical miles) and act as a single nodal agency for facilitation between the producers and various ministries for the clearance purpose. For faster progress and timely growth of wind power installation, the activities should be carried out in a mission mode. Therefore, the need for setting up the Wind Energy Mission is the need of the hour. For setting a National Wind Energy Mission (NWEM) consultation process has been initiated. NWEM targets to achieve to 100 GW of utility-scale wind power and 1000 MW of distributed wind power by the end of the 13th plan in 2022. The envisaged phase-wise capacity addition targets are 20 GW of utility-scale onshore wind power by 2017, and an additional 50 GW by 2022. The targets for offshore wind power are 10 GW by 2017 and an additional 11 GW by 2022. 4.3. Incentive schemes In India, wind power is now gradually acknowledged as a major complementary energy source for securing a sustainable and clean energy. Now, India is the third largest annual wind power market worldwide, and also provides great business opportunities for investors [6]. In 2011, with the addition of more than 3 GW of new installations Indian wind power sectors registered a record annual growth. However, the growth rate slowed down in the subsequent years. To sustain higher growth, long-term policy and regulatory framework of the central and state level regulators play a very important role. Continuous review of policy and incentive mechanism has been able to enhance greater acceptability of wind power by the producers and consumers. However, in most of the cases, these reviews have been reactive in nature rather than proactive. Our understanding is that the regulators should proactively revise the relevant policies to build desirable confidence among the investors and consumers. Table 5 presents updated incentive schemes and policies of the major wind-producing states in India [14,15]. The NAPCC stipulates that a minimum renewable purchase target of 5 percent (of total grid purchase) prescribed in 2009– 2010 and this should increase by 1 percent each year for a period of 10 years. This means by 2014 renewable purchase obligations (RPOs) should be 9 percent and by 15 percent by 2020. To achieve such targets, there is a clear need for comprehensive and longterm planning both at the federal and state levels. Meeting the target of RPOs is far away from reality in India, and most of the states have been consistently failing to achieve the basic target [16]. The Central Electricity Regulatory Commission (CERC) opines that the responsibility of ensuring RPOs lies with the SERCs. However, the SERCs are yet to find and administer effective compliance mechanism for achieving state level target, leading to the achievement of the national RPOs’ target. Some of the SERCs notified the RPOs’ target as late as 2012 and many of them have set very low targets. By 2012, the overall cumulative average target set by various state regulators was 5.44 percent, whereas the national target was set at 7 percent, resulting in a deficit of 1.56 percent

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[16]. In most cases the generation-based mandatory RPOs are less than 1 percent. This means that the major part of the obligation can be met through the purchase of Renewable Energy Certificate (REC). But the obliged entity needs to purchase solar REC to fulfill the requirement for solar generation and non-solar for non-solar generation obligations. In case the solar REC is not available, the obliged entity can purchase the non-solar-like wind REC to fulfill the obligation. In the recent past, the Generation-Based Incentive (GBI) was a very popular scheme among the wind producers. The MNRE has announced the extension of the scheme for continuation of the GBI for Grid Interactive Wind Power Projects for the entire 12th plan period (2012–2017). The GBI would be available for wind turbines commissioned on or after April 1, 2012 and shall be governed by the guidelines. The objectives of the GBI scheme are:


To incentivize actual generation with the help of a generation/ outcome-based incentive.


To facilitate entry of large Independent Power Producers (IPPs) and Direct Investment (FDI) to the Wind Power Sector. Under the scheme, the GBI will be provided to wind electricity producers @ Rs. 0.50 per unit of electricity fed into the grid for a period not less than 4 years and a maximum period of 10 years with a cap of Rs. 10 million ($0.163 million) per MW. The total disbursement in a year will not exceed one-fourth of the maximum limit of the incentive, i.e., Rs. 2.5 million ($40,879) per MW during first four years. The GBI incentive is over and above the approved tariff by the concerned SERCs in various states. The continuation of GBI scheme is expected to attract higher investment during the extension period. The government offered very attractive schemes like any wind project generating power before March 31, 2013, such as the income was entitled to receive a tax holiday for the first 10 years under section 80 I A of the Income-Tax Act, Government of India. The tax holiday scheme has been extended to the undertakings, which begin generation, distribution, and transmission of power, by March 31, 2017. Considering the request of various stakeholders, the government also restored the Accelerated Depreciation (AD) scheme for the wind projects to boost investment in wind energy. The government in its budget (2014–2015) offered full exemption of Special Additional Duty of 4 percent of parts and materials required for manufacturing wind-operated generators, and increase of the clean energy cess from Rs. 50 to Rs. 100 per tonne for financing and promoting. In order to provide the necessary thrust to wind power component manufacturing industry, the government reduced Basic Customs Duty from 10 to 5 percent of forged steel rings used in the manufacture of bearings of windoperated electricity generators. Excise duty was reduced from 12 percent to Nil on forged steel rings used in the manufacture of bearings of wind-operated electricity generators [17]. The draft National Offshore Wind Energy Policy provides certain fiscal incentives such as tax holiday for the first ten years of offshore wind power generation, concession in customs duty, and exemption from excise duty for the procurement of technology and equipment. Services such as resource assessment, environmental impact statement and oceanographic study by third parties, and use of survey vessels and installation vessels may also be eligible for exemption from service tax.

5. Benefits of wind power Wind projects provide a relatively high number of sustainable development benefits [18] including lower emission and environment

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Table 5 Guidelines/incentives for wind power generation in various states in India [14,15]. Capital expenditure (capex)/wheeling (W)/ banking (B)

Buy-back (BB)/third party sales (TPS)/capacity utilization factor (CUF)

Capital subsidy (CS)/other incentives (OI)

Andhra Pradesh

Capex: Rs. 57.5 million/MW (including evacuation cost)

BB: Rs. 3.50/per kWh w.e.f. 09.09.2008 (frozen for 10 years). Revised to Rs.4.7/kWh.

Industrial status. Reactive power: 10 paise per kVARh up to 10% & 25 paise per kVARh above 10%.

Tamil Nadu

W: 5 % of energy wheeled. B: Not allowed. Capex: Rs. 57.5 million/MW

TPS: Allowed under the Electricity Act 2003. CUF: Normative 23% BB: Rs. 2.75-3.51/KWh.

W: 5% of energy B: 5% (12 months financial year (April to March)

TPS: Allowed by the SERC since March 20, 2009.

Karnataka

Kerala

West Bengal

Gujarat

Capex: Rs. 56.0 million/MW (including evacuation cost of 1 million/MW)

W: 5% of energy fed to the grid. B: Allowed @ 2% of energy input Capex: Rs. 57.5 million/MW. O&M cost at Rs 9.0 lakh/MW escalated at 5.72%. W: To be decided by the SERC. B: To be decided by the SERC. Capex: NA W: 7.5% of energy fed to the grid. B: NA Capex: Rs.56.8 million/MW (excluding evacuation cost of Rs. 3.8 million/MW) W: 7-10% of energy fed to the grid.

Madhya Pradesh

B: Allowed. Settlement to be done month to month & surplus energy at end of month & surplus energy at end of month shall be deemed as sold to Utility as per Tariff Rate. Capex: Rs. 59.6 million/MW (including evacuation cost)

Maharashtra

W: 2% of Energy injected. B: Allowed, but proposal for this invited from DISCOM Capex: Rs. 58.5 million/MW

Rajasthan

W: 2% of Energy + 5% as T&D loss. B: Allowed. Settlement to be done within a year Capex: Rs. 56.5 million/MW (including evacuation cost of Rs. 2.5 million/MW )

W: 50% of normal charge as applicable for 33 KV, in addition to the transmission charges of 3.6% & surcharge. B: Six months (Apr. - Sept. and Oct.-March). Utilization of banking energy not permitted in Dec. to Feb.)

CUF: 27.15% BB: Rs. 3.40/ per KWh without any escalation for 10 years of commercial operation but revised to Rs.4.20/KWh-will be applicable till 10 Oct. 2018. TPS: Allowed under the Electricity Act 2003. CUF: 26.5% BB: Rs. 3.14/ KWh for 20 years but recently revised to Rs.4.77/KWh. TPS: Allowed under Electricity Act 2003. CUF: 25%

Reactive power: 25 paise per kVARh up to 10% & 50 paise per kVARh above 10%.

No electricity duty or 5 Years. Reactive Power: 40 paise per kVARh.

Depreciation: 5.83% p.a. for the first 12 years and remaining spread over useful life.

BB: Rs. 4.87/ KWh. TPS: Allowed under the Electricity Act 2003.

Reactive power: 20 paise per kVARh

BB: Rs. 3.50/KWh for 20 years but revised to Rs.4.23/KWh. TPS: Allowed by the SERC.

Electricity duty exempted. Reactive power o 10% energy exempted, then 10 paise/ kVARh. Reactive power 4 10% of energy exported, then 20 paise/ kVARh.

CUF: 24%

BB: Year wise rates (Rs. /kWh) from 1st to 20th year 1styr- 4.03 2nd yr - 3.86 3rd yr- 3. 69 4th yr- 3.52 5th yr - to 20th yr - 3.36. Revised tariff in March 2013: Rs.5.92/KWh. TPS: Allowed by the SERC. CUF: 20%

No Electricity Duty for 5 years. Reactive Power: 27 paise for kVARh. Reactive Power: 25 paise per kVARh.

BB: Rs.5.46, Rs.4.74, Rs. 4.05, and Rs.3.65 per KWh for wind zone 1, 2, 3 and 4 respectively. TPS: Allowed under the Electricity Act 2003. CUF: 22-32%

Power evacuation arrangement, approach road, electricity duty, loan to cooperative societies

BB: Rs. 5.12/ KWh for Jaisalmer, Barmer and Jodhpur. Rs. 5.38/KWh for all other districts.

Exemption from electricity duty @50% for 7 years. Reactive power 5.75 paise per KVArh with escalation of 0.25 paise per year.

TPS: Allowed under the Electricity Act 2003.

CUF: 20-21%

protection. As per the CERC REC regulation 2010 and amendment (2014) the wind power producers can earn REC under the non-solar REC category. One REC is equivalent to 1 MW hour of electricity generated from renewable energy source and injected into the grid. A tradable wind REC can be exchanged in the CERC-approved power exchanges within a band of floor and forbearance price currently set at Rs. 1500 and Rs. 3300, respectively. The CERC is empowered to determine the REC from time to time. As of February 10, 2015, a total of 592 projects amounting to 2459.75 MW of wind have been registered with the Renewable Energy Certificate Registry of India [19]. Maharashtra registered 300 wind projects followed by Tamil

Nadu (202), Gujarat (41), Rajasthan (20), Andhra Pradesh (14), Karnataka (12), and Madhya Pradesh (3). The biggest benefit of wind energy is driving green growth in the country. It is clear that the green growth is a development model [20] and a symbiotic approach to achieving economic growth with environmental sustainability. Wind power can certainly help create job opportunities and social inclusion, reduce social inequality, reduce greenhouse gases, and increase access to clean energy at lesser cost. Wind power also has a positive effect on the quality of the air we breathe [21]. It is a known fact that the combustion of fossil fuels produces the gases like sulfur dioxide

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271

Fig. 3. Wind power density in India.

and nitrogen oxide, both serious sources of pollution. These harmful gasses are major components of ‘acid rain’—killing forests, polluting watercourses, and corroding buildings and monuments.

to many impediments gradual progress has been slower than expected. Some of the impediments are discussed below. 6.1. Uneven spread of wind resources

6. Barriers to higher growth of wind power in India The Planning Commission [22] acknowledges that the factors like uneven spread of wind, insufficiency and high cost of evacuation infrastructure, regulatory issues, project risk, and financing are considered big barriers to the growth of wind power in India. Fig. 3 shows the wind power density within India [23]. It is evident from the analysis that India had a better start in the wind energy sector. But due

Like many other natural resources, wind resource is not evenly spread across the country [22]. Wind potential assessment suggests that wind resources at the desired speed and height are found to be region centric in India (Table 3). States like Gujarat, Tamil Nadu, and Maharashtra have better wind resources compared to states like Bihar and Uttar Pradesh [24]. Therefore, wind production and consumption have been restricted to wind resource rich states.

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6.2. Insufficiency and high cost of evacuation infrastructure In most cases, the place of production, point of feed-in, and consumption are distantly placed, often without established grid connectivity. Therefore, building the transmission infrastructure for evacuating power and connecting to the grid is necessary, but relatively expensive. Often this acts as one of the biggest barriers to wind power distribution and consumption in India, even in the well-developed wind markets like Tamil Nadu [25]. To address the evacuation concern between the points of production and feed-in to the state grids, most of the SERCs include evacuation cost as part of capex (Table 5). Gujarat State Electricity Regulatory Commission allows Rs. 3.8 million/MW for building evacuation infrastructure from the point of generation to the point feed-in to the state grid. The distance allowed is up to 100 km. The intermittent nature of wind power [26–28] in the absence of an adequate balancing mechanism limits the flexibility of the State grid to absorb wind power [29]. To improve the absorption capacity, much larger, smarter, and upgraded transmission network is needed [30]. To have an efficient transmission network capable of carrying renewable power from the point of production to the point of consumption in various parts of the country would require additional investment of INR 30,000 crores ($488.28 billion) by 2017 [22].

6.3. Regulatory issues The lack of fully developed regulatory and policy framework with reference to renewable energy, more specifically the wind power, prevents investors to take appropriate investment decisions [25]. For example, the cost of producing offshore wind is significantly higher [31,32] and the producers are not adequately incentivized under the current regulations. Kar et al. [33] suggest for a higher level of regulatory intervention for greater penetration of renewable energy, more specifically wind energy. Areas, where regulatory interventions are needed, include timely tariff revision, RPO fixation, and monitoring of RPO achievements. 6.4. Project risk and financing In general, the development of RE faces barriers in obtaining competitive forms of finance due to lack of familiarity and awareness of technologies, high-risk perception, and uncertainties regarding resource assessment [25]. A reasonable return on investment and some sort of cover for the risks are being looked by the investors. In India, each state follows a dissimilar policy as far as the renewable energy is concerned, more particularly for wind energy. That is why, there is no uniformity in policies across the states, right from the tariffs (Table 5) that are offered for the period of the power purchase agreements that the state utilities are prepared to sign with the developers. This puts off investors, for whom the first level of comfort is continuity in policy. According to the Planning Commission 12th plan document, another barrier to the growth of the wind sector has increased capital cost [25,34,35]. The recent past wind production cost/MW data suggest a rising trend [34,36–38] in India, despite wind turbine cost falling globally. More recent Planning Commission data suggest that cost per MW has increased from INR 43 million ($0.9 million1)/MW in FY 2003–2004 to INR 57 million ($0.93million see footnote 1)/MW in FY 2010–2011 [22]. Table 5 presents prevailing capex data in the leading wind-producing states of India. Considering the downward trend of wind turbine price in the global market, the capital cost is bound to correct in India. 1

Conversion rate: 1 USD ¼ INR61.18 as on August 8, 2014.

Other reasons of higher capital cost could be due to higher cost of borrowing and there is a regulatory requirement to maintain 70:30 debt-equity ratio. The relatively high cost and low availability of debt in India have significantly increased the cost of renewable energy projects, presenting a major barrier to the expansion of the wind market [39]. Borrowing from the foreign market becomes relatively expensive due to exchange rate and transaction charges. In India, interest rates have increased on debts (about 12.30–12.70 percent per annum) and working capital (12.21–12.8 percent) makes for some very expensive debt under tough macroeconomic conditions [36,40]. Unlike many of the developed markets, India lacks a green bond market. The project developers have access to global green bond market, but the cost of capital is high due to exchange rate charges. Further, it would be beneficial for the small and medium enterprises to have access to concessional financing to bear the risks related to production capacity augmentation, especially for component manufacturers [41]. 6.5. Land availability In most states, the availability of land for wind farms is a contentious issue [42]. Even if private lands are available, conversion of land use status from agricultural to nonagricultural is a time-consuming process. Further, if the land is close to a protected area or forestlands, then obtaining clearance from the forest authorities for using the forestland for wind power generation is a time-consuming and difficult task [43]. The Planning Commission [22] suggests wind power development friendly land policy in India. Other researchers like Singh and Singh [44] and NRDC [39] acknowledge that land-related issues pose a considerable challenge for wind power production in India.

7. Strategic initiatives needed 7.1. Strengthening policy framing and implementation There is an increasing need for strengthening national policy frameworks and the integration of renewable energy use into national sustainable development strategies for poverty reduction, health, education, and agriculture. For higher production of wind power, all SERCs frequently revisit the policy related to investment, project viability, costing, and infrastructure developments [45–48]. Based on the market factors, business environment, and competitive scenarios, the SERCs bring necessary regulations in line with CERC to make wind power competitive enough. The CERC and SERCs bring regulatory changes as and when required. For example, to address the rising capital expenditure and operating expenditure, Rajasthan Electricity Regulatory Commission (RERC) recently announced tariff for wind power projects to be set up on or after April 1, 2014, and shall be in force until March 31, 2015. The RERC considered many of the suggestions offered by the stakeholders while determining the tariff. Table 6 presents the parameter/assumptions used for determining tariff in Jaisalmer, Barmer, and Jodhpur districts of Rajasthan. These regulatory interventions are a critical component for reforms and renewable market developments in India [40]. Often policy makers frame fine policy measures but fail to implement the same due to various issues. For example, the target for mandatory RPOs has been ambitious and spot on from the planning point of view but implementation has been disappointing so far [10]. As per the Electricity Act 2003, the SERCs are empowered to fix RPO limits for the states and ensure successful implementation of the same. As of now about 26 SERCs have announced their RPO limits ranging from 0.5–11 percent but only a handful of states like Tamil Nadu, Maharashtra, and Gujarat are

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273

Table 6 Parameters used for determining wind tariff for plants located in Jaisalmer, Barmer & Jodhpur districts, Rajasthan [40]. Assumption head Power generation Capacity

Unit

Base Case

MW % % Years Years

1 21% 1.25% 35 25

Rs. Lakh/year Rs. Lakh/year Rs. Lakh/year

565 540 25

Debt Equity Total debt amount Total equity amount

% % Rs. Lakh/year Rs. Lakh/year

70% 30% 395.5 169.5

Loan amount Moratorium period Interest rate Loan repayment per annum

Rs. Lakh Years % Rs. Lakh

395.5 0 12.71% 32.96

Equity amount Return on equity Discount rate

Rs. Lakh % %

169.5 16.00% 13.10%

Income tax (for yr-11 to yr-25) Min. alternate tax (MAT) rate (for yr-1) MAT rate (for yr-2 to yr-10) 80 IA benefits Higher depreciation benefit

% % % Yes/No Rs/kW h

30.90% 20.01% 19.06% Yes 0.34

Depreciation rate (power plant) Depreciation rate (transmission) Years for 5.83% rate

% %

5.83 5.83 12

Months % Months %

1 15.00% 1.5 12.21%

Rs Lakh/MW Rs Lakh/MW Rs Lakh/MW % MU h Days h

7.09 0.78 7.87 5.85% 12 24 365 8760

Installed power generation capacity Capacity utilization factor (CUF) Deration factor Life of transmission system Life of power plant

Project cost Capital Cost per MW Project cost Transmission line Sources of fund Debt: equity

Funding options-1 (domestic loan)

Funding options-2 (equity finance)

Financial assumptions Fiscal assumptions

Depreciation

Working capital requirement O&M charges Maintenance spare Receivables for debtors Interest on working capital Operation & maintenance expenses (2014–2015) Power plant Transmission lines Total O&M expenses Total O&M expenses escalation Months of operations Working hours/day No. of days Total no. of hours

% O&M expenses

able to set the right RPO targets and achieve them. As per NAPCC, a national level renewable purchase of 15 percent by 2020 has been set. To achieve the national target, customized incentive schemes should be designed for the resource rich and resource deficit states [49].


Development of support structures for offshore wind.
Grid integration issues for high levels of penetration, including transmission options for far offshore turbines.


R&D on carbon fiber and other new generation composites etc.

7.2. Enhancing R&D activities

7.3. Developing appropriate renewable markets

It is heartening to see 12th FYP emphasizing on research, design, and development for New and Renewable Energy [22]. One of the important areas of focus for MNRE is promoting R&D in the field of renewables [50]. Enhancing national capacity for R&D [24] and transfer and diffusion of renewable energy technologies requires much more attention. Some of the areas [50,51] which seek immediate attention are:

Establishing markets for renewable energy seeks the most important attention from all the stakeholders. IDFC in its discussion paper (2010) suggested greater involvement of government in market development [25]. The paper essentially talks about government buying output of renewable developers, government promoting small-scale wind applications in agriculture and other areas, and providing loans for installing renewable application. Combining the increased use of renewable energy, energy efficiency, and greater application of renewable energy would certainly widen the scope of renewable, more specifically, wind energy.


Improve wind forecasting.
Fundamental design issues for very large turbines (up to 10 MW).

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7.4. Integrating renewable with national power grid Infrastructure development and appropriate maintenance of renewable systems, including the grid structure, require serious attention. A study conducted by Central Electricity Authority (2013) suggests large-scale grid integration for renewable energy [29]. It is to be noted that the introduction of variable RE resources puts pressure on grid leads and creates grid imbalance. But such grid imbalance can be avoided through accurate forecasting, especially in the case of wind energy [29]. For better integration of renewable power like wind enterprise development for sourcing, installing, operating, and maintaining renewable energy systems will add much-needed value to long-term operations and benefits. 7.5. Easy access to finance There is an urgent need for making finance available to renewable projects in India. Mostly the renewable projects are funded by banks, foreign investors (FIs), and balance sheet financing [52]. Often the FIs do not find the renewable projects commercially attractive, so they avoid investing in risky projects. Even banks and financial institutions are more cautious while lending to wind projects with poor evacuation network. The creditworthiness of the off-taker (the state distribution companies in the case of sales to the state) plays a key role in determining the bankability of a Power Purchasing Agreement (PPA). Many state distribution companies with poor financial health [53], resulting in low bankability of PPA, are facing difficulty in getting finance from banks. The National Clean Energy Fund (NCEF), funds for CSR activities, and tax-free donations will be important sources of funding renewable project during the 12th Plan period and thereafter. Through budget allocation (2014–2015) the government enhanced from INR 4000 crores to INR 8000 crores to Clean Energy Fund and this additional allocation will boost wind energy. In addition to that the government should facilitate wider and easy access to more financing options through necessary policy interventions. A report by USAID [52] suggests creating a special fund to provide financing of off-grid rural renewable projects as well as on-site energy projects to improve rural electricity supply conditions. The fund may raise capital from HNIs, NRIs, corporate CSR budgets, and impact investors. This fund should provide finance during various stages of the project.

8. Conclusion Owing to the fact that India is a major importer and consumer of energy, it is strongly recommended that it should move toward the non-conventional sources of energy. There is no doubt that India has made considerable progress in the field of wind power capacity installation and generation. The government of India through well-developed, flexible, and investor-driven policies has been able to attract companies to invest in India. Such policy measures have been well supported by the monetary and fiscal measures. Therefore, the country is all set to add 15 GW of wind power during the 12th plan period (2012–2017). India needs more investments in wind power research and development, wind component manufacturing industry, wind project installation, distribution, and evacuation, grid integration, and more importantly skilled manpower development. Timely policy formulation and implementation of the central and state levels through regulatory bodies must be ensured. The compliance mechanism should be robust for efficient implementation of various policy measures like mandatory RPOs to ensure a higher renewable purchase.

India has a lot to learn from the USA, China, and Germany and can do wonders in making the country self-sufficient in terms of energy to fulfill the unending appetite for energy. It has been observed that the size and efficiency of wind turbines have increased, but the cost of wind power production has gone up. But over the years the price of wind power has been moving closer to the competing conventional fuel and likely to achieve grid parity in the near future. However, for the time being achieved grid parity remains as a challenge. To achieve that, both the operating expenditure (opex) and capital expenditure (capex) should come down further. As the wind turbine cost contributes 68–84 percent of the total cost, it is important to design, develop, and market newer, technologically superior and more costefficient wind turbines to reduce unit cost of wind power. Finally, the authors feel that India should establish more coherence and synchronization between the central and state electricity regulatory bodies and government departments for efficient implementation of various plans, policies, and incentive schemes. References [1] 〈http://planningcommission.nic.in/reports/genrep/rep_carbon2005.pdf〉; 2014, [accessed December 29, 2014, p. 106. [2] Heal, Geoffrey. The economics of renewable energy. Working paper 15081. National Bureau of Economic Research, Cambridge, MA; 2009. [3] GoI (Government of India). Executive summary power sector. Power Ministry. Central Electricity Authority; February 2014. [4] GWEC. Global wind report annual market update 2013; 2013. [5] 〈http://www.earth-policy.org/data_center/C23〉 and other published sources. [6] GWEC. Global wind energy outlook; 2012. [7] PIB (Press Information Bureau). National Offshore Wind Energy Authority (NOWA) to be constituted shortly; 14 August 2013. [8] 〈http://www.cwet.tn.nic.in/〉; 2014 [accessed August 18, 2014. [9] Planning Commission. India, New Delhi. Report of expert committee on integrated energy policy, 〈http://planningcommission.nic.in/reports/genrep/ rep_intengy.pdf〉; 2005 (Chapter VII). [10] Kar SK, Sharma A. Insights into wind energy market developments in India. In: Sharma A, Kar SK, editors. Energy sustainability through green energy. India: Springer; 2015. [11] USAID. Financing renewable energy in India: a review of current status and recommendations for innovative mechanisms; October 2013. [12] Kar, Sanjay K, Sinha, PK.. Ensuring sustainable energy security: challenges and opportunities for India. Unpublished working paper; 2014. [13] Sharma A. A comprehensive study of solar power in India and World. Renewable Sustainable Energy Rev 2011;15:1767–76. [14] 〈www.indianwindpower.com/policy_environment.php〉. [15] 〈http://ireda.gov.in/forms/contentpage.aspx?lid=1155#Div17〉. [16] Greenpeace and Infraline Energy. Powering ahead with renewables—Leaders and Laggards; 2012. [17] MoF (Ministry of Finance). Government of India. D.O.F.No.334/15/2014-TRU; July 10 2014. [18] United Nations (UN). Benefits of the clean development mechanism. United Nations framework convention on climate change; 2012. [19] RECRI. Renewable energy certificate registry of India. 〈https://www.recregis tryindia.nic.in/index.php/general/publics/REC_Source_Wise_Breakup〉; 2015 [accessed February 10, 2015]. [20] Samans, Richard. . Green growth: an imperative of economic development. Forum Issue 1. International Trade Forum; 2012. [21] GWEC. Global wind energy outlook; 2008. [22] Planning Commission. Government of India. 12th Five Year Plan. Economic sectors. Volume II; 2013. [23] Map: Wind map of India. 〈http://www.cwet.tn.nic.in/html/departments_wpdmap. html〉. [24] Purohit I, Purohit P. Wind energy in INDIA: status and future prospects. J Renewable Sustainable Energy 2009;1:042701–19. [25] IDFC. Barriers to development of renewable energy in INDIA & proposed recommendations, 〈http://www.idfc.com/pdf/publications/Discussion-paperon-Renewable-Energy.pdf〉; 2010 [accessed December 29, 2014]. [26] Weisser D, Garcia RS. Instantaneous wind penetration in isolated electricity grids: concepts and review. Renewable Energy 2005;30:1299–308. [27] Georgilakis PS. Technical challenges associated with the integration of wind power into power systems. Renewable Sustainable Energy Rev 2008;vol. 12:852–63. [28] MPERC (Madhya Pradesh Electricity Regulatory Commission), Bhopal. Tariff Order for Procurement of POWER from Wind Electric Generators. SMP-12/ 2013. [29] CEA. Large scale grid integration of renewable energy sources—way forward. 〈http://www.cea.nic.in/reports/powersystems/large_scale_grid_integ.pdf〉; 2013 [accessed December 29, 2014].

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