New Business Opportunities. Repowering, Offshore, MW scale Wind-Solar hybrids and Small Wind Turbines

Transcription

1 New Business Opportunities Repowering, Offshore, MW scale Wind-Solar hybrids and Small Wind Turbines 1

2 Coverage Need for new business models for wind Potential in India Repowering Offshore MW scale Wind-Solar hybrids Small Wind Turbines Challenges International Experience Issues for Discussion 2

3 Need for new business models for wind Under-utilisation of Wind Manufacturing capacity (10000 MW mfg. base Vs 3000 MW utilisation Wind resource rich sites (onshore) have been suboptimally exploited. (Need to exploit Repowering potential at existing sites & Offshore sites) New business models 75 million households unelectrified. Small Wind Turbines have vast potential Grid Connectivity and Generation variability is major concern (Need for MW scale Wind-Solar hybrids) 3

4 Repowering of Windfarms Potential in India Challenges International Experience Issues for discussion 4

5 Potential in India Repowering Nearly 10% (~ 2000 MW) of WTG in India have rating below 500 kw & completed yrs of life span Most of these WTGs are installed at Class I wind sites. Significant potential not only in terms of MW but also MUs 5

6 Challenges in promotion of wind repowering Offsetting PPA Capability of evacuation infrastructure Issue of land ownership Disposal/Market of used turbines Issue of turbine ownership Challenges- Repowering Treatment of additional capital cost (New Tariff Vs Existing tariff) 6

7 International experience Denmark Leader in the Repowering market Undertaken in 2 stages-sub 100 kw kw, started in 2002 Offered Repowering certificates - additional 2.3 cents/kwh tariff as incentive Resulted in incremental capacity addition of 220 MW Expected repowering target of 1000 MW by 2020 Germany Repowering introduced in amendment to RE Law 2004 Offer Repowering bonus of 0.5 cents/kwh Resulted in incremental capacity addition of 150 MW Faced challenges in terms of constraints of height limits, spacing requirements 7

8 Key learnings for India Target low hanging fruits - WTG of less than 500 kw and covered life of 15 years Suitable incentive structure is required to promote repowering Suitable provisions for Amendment to existing PPA for repowered projects need to be incorporated at avoided cost/marginal cost of DISCOM Repowering of existing transmission infrastructure will have to go hand in hand. Need for site specific customization rather than rigid approach Market for used turbines required to be developed. 8

9 Points for Discussion - Repowering What is the potential of wind energy capacity addition through Repowering in India? What are the associated issues and challenges? What kind of Regulatory support needs to be provided for Repowering? What role can State Nodal Agencies play in supporting Repowering? 9

10 Offshore Wind Potential in India Challenges International Experience Issues for discussion 10

11 Potential in India Offshore Wind India is blessed with vast coastline of around 7600 km Although detailed offshore wind potential assessment is yet to be completed, some of the recent studies as LBNL and Xi Lu at al have estimated offshore wind potential in India at 100 m hub height. Study LBNL 238 Xi Lu et al 502 Offshore Potential (GW) Approximately, 78% of the developable offshore potential is available at depths less than 30 m The CUF estimated is in the range of 34-36% (as per industry exp) 11

12 Challenges in scaling Offshore wind High capital cost (Rs cr/mw) and cost of energy (Rs 11-13/kWh) Power Evacuation infrastructure Lack of reliable data on offshore wind potential Challenges- Off-shore wind Grid integration issues 12

13 Annual (MW) International experience...offshore wind Offshore wind power installations are dominated by Europe, with UK contributing nearly 60% of 6700 MW (i.e MW). However, offshore installations by China and US are picking up. Offshore wind is growing at a rapid pace of 37% CAGR over the last 10 years Annual Cumulative UK has been able to promote Offshore wind considering EU target of 20% RE by 2020 (incentive-2 ROC per kwh)-average offshore tariff of 124/MWh (around 11-12/kWh in INR terms) 13

14 Key learnings The significant increase in offshore capacity addition is mainly attributable to improved R&D efforts and technological improvements in the field of offshore manufacturing wind. Apart from technological advancements, suitable incentive structure also assumes importance when it comes to attracting investments in the offshore wind space High cost of energy(rs 12/kWh) is the major cause of concern. (Expected to reduce by 40% and reach Rs cr/mw at the end of 2020 with cost of generation of Rs 7-8/kWh)* (* As per IEA wind tech roadmap 2013) 14

15 Points for Discussion Offshore Wind With current cost of generation (COG) in the range of Rs 11-13/kWh and projected COG of Rs 7-8/kWh by 2020, what role can Offshore wind play in India s energy mix? What should be the target for wind energy capacity addition through Offshore in India? How should policy/regulatory framework support Offshore wind? Draft Offshore Wind Policy outlines creation of institutional structure NOWA and FOWIND (offshore wind program in collaboration with EU) Is the indigenous manufacturing value chain ready for Offshore wind? For improving indigenous manufacturing capability : Encourage JV with European countries for setting Offshore wind projects 15

16 MW Scale Wind-Solar hybrid Encouraging wind-solar hybrid Potential in India Challenges Issues for discussion 16

17 Potential for MW scale Wind-Solar Hybrid Optimal utilisation of land resource & better integrated resource planning. Improved utilisation of the transmission network and evacuation infrastructure. Higher generation yield / higher capacity utilisation factors per acre of land usage and per MW of installed capacity. Operation & Maintenance infrastructure, manpower resources can be optimised. Load Generation balancing and seasonal variation can be better addressed. In India, many states viz. Rajasthan, Gujarat, Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh offering both wind and solar potential sites, makes it an ideal opportunity for promotion of wind solar hybrid concept in these states. 17

18 Wind Solar Hybrid : recognition of technology Definition of RE Sources under CERC RE Tariff Regulations: Renewable Energy Sources means renewable sources such as small hydro, wind, solar including its integration with combined cycle, biomass, bio fuel cogeneration, urban or municipal waste and other such sources as approved by the MNRE; Hybrid Solar Thermal Power Plant means the solar thermal power plant that uses other forms of energy input sources along with solar thermal energy for electricity generation, and wherein not less than 75% of electricity is generated from solar energy component; Tariff treatment under CERC RE Tariff Regulations stipulate: 7 (a) Project specific tariff, on case to case basis, shall be determined by the Commission for the following types of projects: (iv) Other hybrid projects include renewable renewable or renewable conventional sources, for which renewable technology is approved by MNRE; 18

19 Challenges- MW scale wind-solar hybrids There is no example of a MW scale commissioned wind-solar hybrid project in India. Need for Policy for MW scale Hybrid (policy for kw scale hybrids exists) Scope of Hybrid RE technology to be clearly defined Regulatory Challenges Clarity for regulatory treatment & Tariff determination (Case Specific Vs Generic-Actual & Composite tariff) Challenges to be addressed for scaling up MW scale hybrid systems Grid Connectivity issues Interconnection & Pooling arrangements Energy Accounting and Metering Separate accounting for wind/solar 19

20 Key learnings for India There are only few MW scale wind-solar hybrids across the world Recognising benefits of wind-solar hybrids, many countries have charted out plans to set up demonstrative MW scale true wind-solar hybrid projects. Even developing countries such as China, Mexico, Brazil and Jordon are exploring. The generally accepted off take arrangement being followed by windsolar hybrids is to sell wind and solar power at separate PPA and separate tariffs (USA) Wind-Solar hybrids are generally well accepted as decentralised source of power, since under utility scale hybrids there is an inbuilt complementary energy off take between wind and solar MW scale wind-solar hybrids offer significant advantages over stand-alone wind or solar installations. However, demonstration through pilot MW scale wind solar hybrid project would go long way in building stakeholder confidence. 20

21 Points for Discussion Wind Solar Hybrid What are the industry expectations for development of wind-solar hybrids? What are the associated issues and challenges policy, regulatory, technological and implementation perspective? Does current regulatory framework restrict MW scale wind-solar hybrid projects? Any suggestions / recommendations for promoting MW scale wind solar Hybrids in India? 21

22 Small Wind Turbines Potential in India Challenges International Experience Issues for discussion 22

23 SWT Potential in India The largest market potential for SWT-hybrid lies in those 75 million households which still do not have access to electricity There is immense scope for SWT-solar hybrid systems, water pumping mills and other applications such as Telecom towers etc Based on resource assessment, the potential of SWT is estimated at 83 GW in India (WISE). As against massive potential, only 2.25 MW of aero generators and SWT based hybrid systems had been installed across the country Installed capacity In kw

24 Challenges- Scaling up SWT in India Technology barriers 1 Insufficient product reliability 2 Low production levels-low economies of scale 3. Certification and standards for SWT Policy/Regulatory barriers 1. Lack of incentive structure (Net metering/fit/off-grid REC) 2. Permitting/Zoning issues 3. Lack of potential information Challenges faced in scaling up SWT and SHES Grid Connectivity/Accounting barriers 1. Generation data not available (Need IT enabled systems) 2. Capacity Building at DISCOM and SLDC level Market barriers 1. High cost of generation 2. Insufficient capitalisation-small businesses 3 Lack of and high cost of debt 24

25 International experience SWT The Global market for SWT is on an upswing, led by China, USA and UK. The current installed capacity stands at around 670 MW and is projected to reach 3000 MW by The international market for SWT is largely driven incentive structures such as FIT framework, Net Metering, RPO, Grants, concessional permitting. FIT and Grants have emerged as two significant incentive structures Residential & Agriculture are of the most SWT application worldwide (Nearly 70% of total SWT market) Country FIT Net Metering RPS Grants Permitting and zoning USA UK China Canada Spain Netherla nd Portugal 25

26 Key learnings for India Reduction in capital cost and O&M is required- Need to improve R&D efforts and indigenization of SWT CWET to develop guidelines for standardization of SWT, their testing and certification Off grid FIT/REC/net-metering along with Capital subsidy business model needs to be explored 26

27 Points for Discussion Small Wind Turbines What has been industry experience in development of SWT? What are the associated issues and challenges? What are the suggested policy/regulatory recommendations? 27

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