REPOWERING OF OLD WIND FARMS IN INDIA

Transcription

1 REPOWERING OF OLD WIND FARMS IN INDIA BIG OPPORTUNITY TO UNEARTH Rajendra V. Kharul Sr Fellow and Head Centre for Wind Power World Institute of Sustainable Energy, Pune 26 NOV. 2008, WIND INDIA Introduction International experience Presentation Plan Issues and Challenges Suggestion & recommendations Conclusion 2 1

2 Introduction Cumulative installations crossed 9500 MW in OCT More than 82 % capacity added after Mar Pre 2002 installations mostly used wind turbines of capacities 55kW to 300kW. Large number of small rating machines exists at many sites in states like Tamil Nadu, Gujarat and Maharashtra. By end of March 2007, about 5700 number of machines (44 % of then installed) of rating less than 300 kw and totalling to MW were installed in India. With many states facing power shortages on one side and potential windy areas being utilized inefficiently on the other side, it becomes imperative for India to assess the potential of repowering the old wind farms in the country. 3 Variations in turbine sizes in India Year-wise wind power installed in India Installations (MW) upto / kw 1993/ / / / / / / kw 2000/01 Year kw 2001/ / / / / / /08 4 2

3 Strategies for improving performance Re-powering Retrofitting Refurbish and relocate Intercropping Re-powering: Re-powering deals with the replacement of first generation small capacity wind turbines with modern megawatt and multi-megawatt wind turbines. 1-to-1 up-scaling of solitary wind turbines 2-to-1 replacement Clustering of solitary wind turbines into farms 5 Possible re-powering scenario Before After 6 3

4 Benefits of re-powering More efficient use of potential land, more capacity addition per unit of land area. More energy generation per unit of land area and per square meter of rotor area with improved economics. Increase in the percentage share of wind-power in the power-generation mix Reduction in green house gases possible and hence the possibility of earning more foreign exchange through sale of certified emission reductions. Re-powering can be used as tool to achieve national or state targets for renewable energy such as Renewable Purchase Specifications (RPS) in India More social and environmental benefits such as improved landscape, a lesser number of turbines, a lesser footprint area utilization, use of new technology reducing noise-levels, reduced avian mortality resulting in better technology acceptance by communities. Better power-grid integration Reduction in risks and uncertainties for wind-energy estimation 7 Denmark International experience (1) Different phases of re-powering: phase one (<100 kw) and phase two (>100 kw to < 450 kw). Different incentives offered according to phase of re-powering. Phase-I: 1480 turbines totalling MW, replaced with 272 new turbines totalling MW. By end 2007, 10% capacity addition resulted from re-powering. Re-powering certificates: these replacement certificates enabled successful re-powering in Denmark. The certificate holder is awarded a higher price for electricity produced from new turbines up to a maximum of two or three times the replaced capacity (depending on the replaced turbine name plate rating). Phase-II to re-power another 175 MW aging turbines, < 450 kw rating. For re-powering 1.6 Eurocents/kWh are offered as surcharge till The surcharge is for electricity production corresponding to full-load hours for up to twice the decommissioned wind-turbine installed power capacity. The surcharge is regulated in relation to the market price of electricity 8 4

5 Germany International experience (2) Local government restrictions on hub-height and spacing of turbines limited the interest in opting for re-powering. Amendment to the Renewable Energy Sources Act (EEG) in 2004 offered an additional financial incentive to re-power turbines installed before Failure of this legislative measure (amendment to EEG in 2004) to accelerate the re-powering market in Germany. The German Wind-energy Association (BWE) study shows that spacing requirements and height limits result in the loss of enormous economic potential for wind energy. Till 2005, less than 1% of then installed (16826 MW) capacity repowered. Recent amendments in June 2008, in EEG offered 0.5 cents/kwh above the initial feed-in price of 9.1 cents/kwh for re-powering projects. This will be effective from 1 January BWE estimates re-powering potential up to 2020 in Germany at MW. 9 International experience (3] Findings of re-powering at a wind farm in Bassens ( Lower Saxony), Germany 10 5

6 International experience (4) The Netherlands Two re-powering strategies: the first deals with re-powering solitary windturbines. The second focuses on wind-farms. A model developed by ECN wind-energy: the effect of re-powering existing wind-turbines can be simulated. It distinguishes different sizes of turbines, wind-farms and age of the turbines involved. Different re-powering strategies can be fed into the model. No ongoing re-powering programme sited. 11 The U.S.A. International experience (5) Prior to 1999, 245 MW re-powered, 1999 to 2003 only 23 MW, by end of Mar. 07 total repowering 340 MW (20% of 1600 MW capacity in 1990 in California) California Fix : change in federal law denied production tax credits to re-powered wind facilities under existing contracts unless project owners obtained from the purchasing utility a contract stating that the additional power from a re-powered project would be priced at short-run avoided cost. This provision, known as the California Fix, slowed re-powering for several years, in part because short-run avoided cost proved unattractive. The US Tax Code (Section 45) provides that re-powered facilities with an existing standard offer contract are only eligible for the production tax credit if the contract is amended so that any windgeneration in excess of historical norms is either sold to the utility at its current avoided costs, or else sold to a third party. That means it denies the tax credit to repowered projects, unless owners agreed with the purchasing utility to amend their contracts to reduce the purchase price for the incremental power produced. Such provisions did hamper the re-powering California s renewable portfolio standard: provisions such as legislative goal of 20% retails sales from renewables by 2017, increase by at least 1% per year. 12 6

7 Re-powering: Potential States in India Tamil Nadu Gujarat Maharashtra 13 Turbine Installation Trends in India Percentage change of wind turbine capacity installed in India 2004/ / /07 Ratings % Qty MW % Qty MW % Qty MW < 300 kw kW- 600kW kW - 1MW >1MW

8 Turbine Installation Trends in India... Percentage Share of WTG having less than 500 kw ratings in India 15 Cost of re-powering and incentives Repowering project costs are always more than that of green field projects. Re-powering wind-power project costs: Need consideration for future revenue loss from the existing functional projects over its balance life. To make the projects viable additional financial support is required either in terms of separate feed-intariff or financial incentives through governments / utilities buying green power. Incentives Options Option I: The additional project cost in case of repowering can be compensated through add-on tariff by separate feed-in-tariff for re-powered projects Option II: The additional repowering project cost may be compensated through repowering incentive on the lines of recently introduced generation based incentive (GBI) for five years by MNRE. Option III: If MNRE decides to prolong the incentive period from 5 years in Case-II to 10 years generation, so as to ensure the efficient project functioning for longer duration 16 8

9 Challenges for re-powering in India Technical issues O & M of old WTs Underutilization of wind resource site Electrical grid and substation Rating of WT for re-powering Turbine Spacing Testing and certification Options to dispose off Scrap Exporting to other countries Buy back by the government Buy back by the WTG manufacturer Re-using or recycling Financial issues Land ownership and land costing De-commissioning Cost Salvage value of old project Discounting factor Sale to EB V/s Captive Power Projects Tariff and incentives for re-powering Policy and regulatory issues PPA Issue Mode of sale of electricity High open access charges to new captive wind projects Other issues Many old WTs manufacturers do not exist Distributed Vs Concentrated risks Availability of cranes MARKET MODEL? 17 Suggestions and recommendations Wind power projects having less than 300 kw or 500 kw turbine capacity may be offered for repowering. Stringent micro-siting criterion as followed in few states (e.g Tamil Nadu ) should be relaxed to develop full repowering potential. All Captive, third party sale and sale to SEB projects should be considered for successful re-powering programme, since above 65% of the investors are in captive mode For permitting re-powering, old existing project should have maximum balance life of 10 years and wind turbine capacity of each WTG < 500 kw, shall be considered. The re-powering ratio should be at least 2 which in turn will give more energy yield (>3 times). The same land area as per existing project needs to be considered Re-powering incentives Feed-in tariff support: for 20 years Generation linked re-powering incentive for 5 or 10 years 18 9

10 Conclusion Re-powering benefit- With half the infrastructure, double the capacity and triple the energy, this is the re-powering mantra or thumb rule. Re-powering should be the preferred option to retrofitting / refurbishment or relocation of old wind turbines. The incentive may be offered through SERC tariffs or through generation linked incentives by MNRE for the period of five-ten years. Apart from the economics, other important challenges for implementing re-powering and associated issues like-technical, financial and policy & regulatory etc. need special attention. 19 World Institute of Sustainable Energy Surya-Suman, 49 Hindustan Estates, Road No. 2, Kalyani Nagar,, Pune Tel / / Fax Website cwp@wisein.org Thank You! 20 10