South Asia Media Briefing Workshop on Climate Change Centre for Science and Environment

Transcription

1 Low Carbon Growth Future of Renewable South Asia Media Briefing Workshop on Climate Change Centre for Science and Environment Balawant Joshi Director,

2 In the Next Twenty Minutes.. Introduction to ABPS Infrastructure Advisory Contribution of Energy in GHG Emissions Renewable Energy - International Scenario Renewable Energy Development in India Renewable Target under NAPCC

3 Introduction to ABPS Infrastructure Advisory

4 An Introduction to ABPS Infra Set Set up up in in Sep Sep as as start-up start-up Consulting Consulting Organization Organization by by professionals, professionals, having having wide wide range range of of experience experience in in the the energy energy and and infrastructure infrastructuresectors. sectors. Promoted Promoted by by Ajit Ajit Pandit, Pandit, Balawant Balawant Joshi, Joshi, Palaniappan Palaniappan M &Suresh &Suresh Gehani. Gehani. Experience Experience spans spans commercial, commercial, financial, financial, regulatory regulatory and and technical technicalspheres of of the the energy energy and and infrastructure infrastructure sectors. sectors. Experience spans across spectrum covering all stake-holders FI / Banks Govt MOP / MNES Developers SEBs / Utilities / Private Utilities Regulatory Commissions

5 We Combine Breadth of Expertise with Industry Knowledge Services Clients Regulatory Commissions Regulatory and Policy Corporate & Financial Advisory Renewable Energy DSM & Energy efficiency Climate Change Advisory Utilities (State and Private) State Governments Central Government Industry Associations Investors Regulations development Tariff determination Market Mechanisms Policy for Renewable energy Rural Electrification Diagnostic studies Due Diligence Financial Modelling Counter Party Risk Assessment Bid Process Management Business Valuation Contractual support Resource Assessment RPS and RPO Feed-in tariff Market Study Investment Strategy Project structuring Project development Designing DSM Plans Energy Audit Life Cycle Assessment Monitoring & Verification End use energy efficiency improvement Climate Change Policy analysis Carbon Footprint Carbon Neutrality CDM project development support Emission Trading advice Developers Capacity Building Financial Institutions Committed to creating change, not just proposing it, from strategy through to implementation 5

6 Contribution of Energy in GHG Emissions

7 World Anthropogenic GHG Emissions (Mt) in 2009 More than 60% of total GHG emissions are attributable to Energy Sector.

8 India CO2 Emissions in 2010 Source : India GHG Emission Report 2010 In India, 58% of emissions are attributable to energy sector.

9 CO2 emission for diff power generation options Coal based plants based on sub-critical technology Old and less efficient coal power plants as high as New 500 MW sub-critical power plants Super critical plants operate at high temp Ultra super critical power plants at still higher temps Gas based power generation Hydro and Renewable Sources 1.1 kg per net kwh 2 kg per net kwh 0.93 kg per net kwh 0.83 kg per net kwh 0.74 kg per net kwh 0.40 kg per net kwh Nil (Neglecting negligible indirect/auxiliary emission) Move towards lower carbon intensity fuels is MUST. Renewable Energy, being near ZERO carbon energy is bound to get priority status.

10 Global Cost Curve for GHG abatement Source: McKinsey Report 2007 Energy Efficiency obviously has great potential. Given large potential and relatively lower costs, it is imperative to promote RE Technologies.

11 RE Sources & International Scenario

12 Renewable Energy Technology (1/2) Solar Energy - Solar energy technologies use the sun s energy and light to provide heat, light, hot water, electricity, and even cooling, for homes, businesses, and industry - This Technology includes Photovoltaic System and Solar Thermal Energy Wind Energy - Wind Turbines are used to generate electricity from wind energy - Installations could be onshore or offshore Geothermal Energy - Geothermal energy is the heat from the Earth which is clean and sustainable. - This energy is used generally to produce electricity

13 Renewable Energy Technology (2/2) Hydro Power - Flowing water creates energy that can be captured and turned into electricity. This is called hydroelectric power or hydropower - The most common type of hydroelectric power plant uses a dam on a river to store water in a reservoir Biomass Power - Energy from organic matter is the biomass. Today Wood is the largest biomass energy resource - Biomass is either used as biofuel in transportation or burning biomass directly to generate electricity Tidal Energy - This is a form of hydro power that converts the energy of tides into useful forms of energy- mainly electricity

14 RE-Global Scenario (1/3) Renewable energy contributed around 16% to global final energy consumptioncounting biomass, wind, hydro, solar and geothermal etc Source: REN 21 Global Status Report 2011

15 RE-Global Scenario (2/3) RE replaces fossil fuels in power generation market, heating and cooling, transport fuels and rural/off-grid energy services RE accounted for approximately half of the estimated 194 GW of new electric capacity added globally during Existing RE power capacity worldwide saw 8% increase as compared to RE capacity comprises about a quarter of total global power generating capacity and supplies close to 20% of global electricity, with most of this provided by hydropower Among renewable sources, global wind power capacity rose by 39GW; hydropower by 30 GW and solar PV global capacity rose by 17 GW in China leads the world in installation of wind turbines and solar thermal systems and was the top hydropower producer in China added 29GW of grid connected renewable capacity in 2010, an increase of 12% relative to In the European Union 22.6 GW was the RE capacity added in Germany met 11% of its total final energy consumption with RE sources Source: REN21 GSR

16 RE Global Scenario (3/3) RE Power Capacities 2010, excluding Hydro Hydro Wind Biomass Geothermal Solar PV SWH Top Five Countries in terms of RE Capacities China China USA USA Germany China USA USA Brazil Philippines Spain Turkey Canada Germany Germany Indonesia Japan Germany Brazil Spain China Mexico Italy Japan Germany/ India Sweden Italy United Greece India States Source: REN 21 Global Status Report 2011

17 RE Policies and RE targets Source: IPCC- SRREN 2011

18 Renewable Energy policies Regulatory Policies Feed in tariff Utility Quota Obligation Net Metering Obligation and Mandate Tradable Renewable Energy Certificate (REC) RE Policies Fiscal Incentives Capital Subsidy, Grant or Rebate Tax Incentives Energy Production Payment Public Funding Public Investment, Loans or Grants Public Competitive Bidding

19 RE Targets Policy targets now exists in more than 98 countries, most of them being developing countries Sweden and Finland have even passed their 2020 targets in Australia met its original 2010 target of 9.5 TWh well before Revised target of 45 TWh by 2020 has been released in Australia. China reached 45 GW in 2010, which is more than 30 GW target for 2020 Many countries and States have introduced new targets In India, 12 th Five Year Plan would set revised targets for Source: REN21 GSR 2011

20 Renewable Energy Development in India

21 Renewable Energy Sources in India Wind Solar Small Hydro Wind Energy Sources are concentrated in six states in Southern and Western parts of the country. Good solar energy potential exists in north-western part of the country Small hydro and large hydro resources are concentrated in northern Himalayan and north-eastern parts Central, northern and eastern parts of the country are not endowed with rich renewable sources. Renewable energy resources are spread unevenly across the country.

22 Key Drivers for Renewable Energy Development Source : Ministry of New and Renewable Energy RE capacity (18 GW) forms ~ 10% of total generation capacity (170 GW) in the country In energy terms, it constitutes ~ 4% - 5% of total consumption 22 17/11/2011

23 Policy Design and Regulatory Initiatives o Electricity Act 2003 (Jun 2003) Central Government o National Electricity Policy (Feb 2005) o National Tariff Policy (Jan 2006) o National Action Plan on Climate Change (Jun 2008) o Regulations for Preferential Tariff for RE (Sep 2009) Central Electricity Regulatory Commission o Renewable Energy Certificate Mechanism (Jan 2010) o Implementation Framework (2010 ongoing) o Preferential RE Tariff Orders by SERCs ( ) State Electricity Regulatory Commission o o Nearly all States have mandated Renewable Purchase Obligations ( ) Modification to RPO and adoption of REC framework 23 17/11/2011

24 RPO Orders across States Source: FOR_Crisil Report 2010

25 RE Tariff across States in India Source: Crisil-FOR report 2010

26 Impact of RPO on Power Purchase Cost (PPC) Incremental impact of varying levels of RPO on the PPC have been analyzed for each state as well as for pan India level for the 3 Scenarios For Scenario-2 (equal increase in RPO for all years), which is suggested as the suitable RPO trajectory for adoption, the incremental impact on the PPC is 1.5 paisa per unit for the first year and it gradually decreases to 0.1 paisa per unit in FY15. From the Impact Analysis it is observed that the impact of RPO on tariff is not substantial and could be accommodated by the State utilities Source: Crisil FOR Report 2010

27 Large scale RE deployment still faced several barriers Renewable sources are not spread evenly across country Many states with no or little RE were not able to promote RE States with good RE felt the have exhausted their capacity to absorb It is difficult to carry out inter-state sales using CERC Open Access Regulations for large scale deployment of RE following reasons: Most RE generators are difficult to schedule Transaction would be expensive due to low capacity factors of RE RE generators are not connected to STU but to Discoms Intra-state balancing systems are not stable Low transaction cost mechanism was required to enable OA/Captive and voluntary consumers to purchase RE. Therefore, a mechanism that will enable inter-state sale and purchase of renewable energy was required.

28 Key Objectives for Introduction of REC Mechanism Effective implementation of RPO Increased flexibility for participants Overcome geographical constraints Reduce transaction costs for RE transactions Enforcement of penalty mechanism Create competition among different RE technologies Development of all encompassing incentive mechanism Reduce risks for local distributor by limiting its liability to energy purchase In the view of hurdles faced by RE Development, it appears that these objectives should take precedence over others 28 17/11/2011

29 Concept of REC Mechanism in India Existing Mechanism Renewable Energy Electricity REC Distribution Company At Tariff Determined by Regulatory Commission OA / Trader Bilateral agreement (de-regulated) REC Mechanism Renewable Energy Electricity Distribution Company Avg. PP Cost of Host Utility (regulated) REC Obligated Entity (Buyer) Market Rate as per Power Exchange

30 REC Accreditation and Registration as on Nov 2011

31 RECs Issued, Traded and Redeemed as on Oct 2011

32 Renewable Energy Target under NAPCC

33 NAPCC : Guideline for RE Development National Action Plan for Climate Change (NAPCC) At National level for FY 2010, target for RE Purchase may be set at 5% of total grid purchase, to be increased by 1% each year for 10 years SERCs may set higher target than this minimum at any point in time Central & State Govts may set up a verification mechanism to ensure that renewable power is actually procured Appropriate authorities may issue certificates that procure renewable power in excess of the national standard. Such certificates may be tradable, to enable utilities falling short to meet their RPS Penalties as may be allowed under EA 2003 may be levied, if utilities are still falling short in RPS 33 17/11/2011

34 NAPCC has set challenging target for RE Development Considering that demand for electricity would increase to 1700 BU by 2020, it would create market for 255 BU units of renewable energy generation NAPCC identified REC framework to realize annual target of National RPO 34 17/11/2011

35 NAPCC Targets require New Business Models Scenario Required Generation from RE by 2020 (BU) Average PLF - RE (%) Required Capacity Addition (MW) Current Capacity (MW) Capacity Addition p.a. (MW) Optimistic % Realistic % Actual % India has to increase its RE Capacity Addition by FIVE FOLDS from the Present Capacity of 20256MW under Realistic Scenario to meet the target of 15% RE generation by 2020 envisaged under NAPCC

36 ABPS Infrastructure Advisory ABPS Infrastructure Advisory A-309, Kohinoor City Kirol Road, off LBS Marg Kurla (West), Mumbai Ph: / Fax: