RENEWABLE ENERGY IN INDIA SECTOR FOCUS: WIND AND BIOMASS

RENEWABLE ENERGY IN INDIA SECTOR FOCUS: WIND AND BIOMASS

RENEWABLE ENERGY IN INDIA India has 5 th largest power generation portfolio in the world. Current renewable energy contribution: 44.8 GW (As on 31.07.2016) 1. Renewable energy contributes 14.7% of the total installed capacity in the country as on 31.07.2016 1. National Target: 175 GW Installed Renewable Power by 2022 2. 60 GW from wind power; 100 GW from solar power; 10 GW from biomass power; 5 GW from small hydro power 2. Over the next 5 10 years, around 293 global and domestic companies have committed to generate 266 GW of mix-renewable energy (solar, wind, mini-hydel and biomass) based power in India. Industry has attracted approx. US$ 10 billion in Foreign Direct Investment (FDI), between April 2000 and March 2016 3. Country-wise: New Investments in Renewable Energy India is geared-up ambitiously for the Renewable Energy 1 HTTP://WWW.MAKEININDIA.COM/SECTOR/RENEWABLE-ENERGY 2 HTTP://MNRE.GOV.IN/FILE-MANAGER/ANNUAL-REPORT/2015-2016/EN/CHAPTER%201/CHAPTER_1.HTML 3 HTTPS://WWW.IBEF.ORG/ARCHIVES/DETAIL/B3ZLCNZPZXCMMZCYMZYMOTEW

..CONTD. 2030 India would be the 3 rd largest country consuming 9% of total renewable energy globally 1. Initiative would entail an investment of about US$ 310 350 billion 2. One of the India s Intended Nationally Determined Contribution (INDC) in response to COP* decisions is of reaching a renewable energy share of 40% by 2030 3. 2040 India shall account for 11% of all investment in power generation 4. Renewable energy penetration would be approximately 49% 4. It is essential to engage India together with the other largest users such as Brazil, China, the EU and the United States (US) to achieve the goal of doubling renewable energy s global share 1. *CONFERENCE OF PARTIES 1 REMAP RENEWABLE ENERGY PROSPECTS FOR INDIA. MAY 2017 WORKING PAPER 2 HTTPS://WWW.IBEF.ORG/ARCHIVES/DETAIL/B3ZLCNZPZXCMMZCYMZYMOTEW 3 INDIA S INTENDED NATIONALLY DETERMINED CONTRIBUTION: WORKING TOWARDS CLIMATE JUSTICE, HTTP://WWW4.UNFCCC.INT/SUBMISSIONS/INDC/PUBLISHED%20DOCUMENTS/INDIA/1/INDIA%20INDC%20TO%20UNFCCC.PDF 4 GLOBAL WIND AND SOLAR COSTS TO FALL EVEN FASTER, WHILE COAL FADES EVEN IN CHINA AND INDIA. JUNE 2017. HTTPS://ABOUT.BNEF.COM/BLOG/GLOBAL-WIND-SOLAR-COSTS-FALL-EVEN-FASTER-COAL-FADES-EVEN-CHINA-INDIA/

Suzlon Energy, Gamesa, Inox etc. Technology innovation; Product marketing partners National Thermal Power Corporation; Solar Energy Corporation of India Tendering and Bidding out the projects Windfarms, Solar wind hybrids Nodal Agencies Equipment Manufacturers and Technology Providers Research & Development (R&D)/ Technical Institutions National Institute of Wind Energy (NIWE); Sardar Swaran Singh National Institute of Bio-Energy Technology and Skill Development /Technical Consulting Confederation of Indian Industries, Indian Wind Power Association etc. Spreading Awareness/ Organizing stakeholders meeting(s) Non Governmental Organizations (NGOs)/ Association(s) Renewable Energy State Governments State Ministeries etc. Facilitating effective implementati on of RE programs & schemes Independent Power Producers like Renew Power, Suzlon Energy, GE Energy, Vestas, Siemens etc. Implementing projects and Innovation in business models for inclusive growth Developers/ Investors (including foreign) (RE) Stakeholders Regulators Central Electricity Regulatory Commission (CERC); State Electricity Regulatory Commissions Formulating Conducive regulations; Supporting RE policies from Centre and state World Bank, Asian Development Bank, Goldman Sachs etc. Rural electrification efforts by providing debt funds at low cost International Financial Institutions Indian Financial Institutions/ Partner Banks Different Ministries of Government of India Ministry of New and Renewable Energy (MNRE); Ministry of Power etc Promoting RE; Facilitating large scale off-grid programs like small wind turbines etc. IREDA and other Indian Banks Concessional financing for RE projects

WIND ENERGY IN INDIA CONTENTS Potential, Capacity, Market Overview State Focus Offshore Wind in India Danish Competencies in India Supply Chain

WIND ENERGY IN INDIA Potential, Installed Capacity and Current Market Overview 4 th largest installed capacity of wind power. Estimated wind power potential by NIWE is 302 GW at 100m height. Installed capacity of wind power~ 32 GW. Top-five Wind Turbine Manufacturers in terms of cumulative installed capacity in India are Suzlon (35.4%), WindWorld (18%), Gamesa (10.1%), Vestas (7.6%), Regen (7.3%) and Inox (5.68%) 1. 2017 is a "year of transition" for India s wind energy s market based mechanisms. Industry has moved from tax-credit driven investment to mainstream bidding process by Independent Power Producers (IPPs). In October 2017, during a planned auction 1 GW of capacity was awarded to five developers with a tariff of about 0.04 US$/kWh 2. Growth of Installed Capacity 3 * (Projected), GW Seeing the success of 2 bids, MNRE has planned auction of 4 GW wind projects during the current fiscal (upto March 2018). Indian government is planning to auction 5GW offshore wind projects in 2018. 1 HTTP://WWW.GWEC.NET/WP-CONTENT/UPLOADS/VIP/GWEC_IWEO_2016_LR.PDF 2 HTTPS://TIMESOFINDIA.INDIATIMES.COM/BUSINESS/INDIA-BUSINESS/GOVT-MULLING-2-3-TARIFF-BASED-AUCTIONS-FOR-WIND- PROJECTS/ARTICLESHOW/61088778.CMS 3 MNRE, (N.D.). WIND [ONLINE] AVAILABLE AT HTTP://BIT.LY/2V9L1B8,ACCESSED ON 22 AUGUST 2017

Wind Energy: State Focus Spread across the South, West and North regions of India. Potential of wind energy is concentrated in the states of Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu and Telangana. Tamil Nadu has the highest installed capacity in the country and its state regulations are very much favourable to wind power development. Maharashtra has the 2 nd highest installed capacity. Gujarat has 3 rd highest installed capacity and its long coastline is also being tapped for offshore energy, with the government signing a Memorandum of Understanding (MoU) for a 500 MW offshore project, the first of its kind in India. Gujarat Maharashtra Tamil Nadu Wind Power Potential at 100magl 2 State wise Installed Wind (MW) (as on 31.10.2016) 1 1 HTTP://WWW.MNRE.GOV.IN/ 2 HTTP://NIWE.RES.IN/DEPARTMENT_WRA_100M%20AGL.PHP

Offshore Wind in India India has its National Offshore Wind Energy Policy. Draft guidelines for Offshore Studies and Surveys by Private Sector have been issued by National Institute of Wind Energy (NIWE). The EU Delegation to India, in close cooperation with the Indian Ministry of New and Renewable Energy, have given grant to two different consortiums: Facilitating Offshore Wind in India (FOWIND), initiated by the Indo-European co-operation on renewable energy, is led by the Global Wind Energy Council (GWEC) and has been working for more than 3 years in offshore wind. Another consortium led by COWI (Denmark) First Offshore Windfarm Project in India (FOWPI). The project is preparing technical tender documents for a 200 MW offshore windfarm in Gujarat. The documentation is expected to be ready by mid 2018 for the NIWE to send a tender call to Indian and European companies to construct the offshore wind farm 1. Danish Competencies in India Under 'Make in India' initiative and following to a commitment to Indian Prime Minister in November 2015, Vestas opened their blade manufacturing unit in Gujarat. MoU for 1GW wind power generation has been signed between Gujarat Energy Development Agency (GEDA) and Vestas. Vestas is partnering with the Skill Council of India and has research and development test centre for wind turbine components in Chennai, India 2. LM Wind Power set up its second blade factory in Vadodra, Gujarat promoting employment, advanced training and development of technical skills in the state. Currently, it operates a blade manufacturing facility in Dobaspet, Karnataka and a research and development office in Bangalore 3. 1 HTTP://NIWE.RES.IN/DEPARTMENT_WRA&O_OFFSHORE_PORTAL.PHP 2 HTTP://DESHGUJARAT.COM/2017/03/25/GUJARAT-CM-INAUGURATES-VESTAS-WIND-POWER-BLADE-PLANT-AT-BAVLA/ 3 HTTPS://WWW.LMWINDPOWER.COM/EN/STORIES-AND-PRESS/STORIES/NEWS-FROM-LM-PLACES/LM-WIND-POWER-ANNOUNCES-SECOND-BLADE-FACTORY-IN-INDIA

SUPPLY CHAIN Raw material and Machinery Suppliers Design and Development Services Component Suppliers Wind Turbine Companies Construction and Installation Services Windfarm Developers Steel Design Gearbox OEMs Engineering & Feasibility Carbon fibre Engineering Bearing Large utility Procurement analysis Balsa wood Research Tower scale (EPC) firms Fibre glass Machining Generators Small wind Construction Project Other Automation Blades New wind companies developers materials Assembly Electronics energy Transportation Utilities Machinery designers services Tooling Turbine mfg Operation and licensees maintenance Represents Thrust areas in Supply Chain. Maximum Market potential for Danish competencies exists in: Design and Engineering Feasibility studies Operation and Maintenance Research and Development HTTP://WWW.EAI.IN/REF/EVE/WIND_POWER_VALUE_CHAIN.PDF

BIOMASS ENERGY IN INDIA CONTENTS Potential, Capacity, Market overview State Focus Fiscal Incentives Danish Competencies in India Supply Chain

BIOMASS ENERGY IN INDIA Potential, Installed Capacity and Current Market Overview: Biomass in Indian energy matrix for remote villages and decentralised settlements India has potential of about 18 GW of energy from Biomass 1. Currently, about 32% of total primary energy used in India is derived from Biomass. More than 70% of the country s population depends upon biomass for its energy needs. Biomass related projects receives an investment of about $9251 million every year, leading to electricity generation of 5000 million units. India has ~5+ GW capacity biomass powered plants: 83% are grid connected while the remaining 17% are off-grid plants 2. Off-grid plants based on biomass gasification technology are used for thermal and power application in rural areas. Year-wise Cumulative Bio-Power (Biomass/ Cogen, Waste to Energy) Installed Capacity (GW) 1 HTTP://MNRE.GOV.IN/SCHEMES/GRID-CONNECTED/BIOMASS-POWERCOGEN/ 2 MNRE, (N.D.). BIOMASS KNOWLEDGE PORTAL [ONLINE] AVAILABLE AT <HTTP://BIOMASSPOWER.GOV.IN/> ACCESSED ON 22 AUGUST 2017 3 HTTP://MNRE.GOV.IN/FILE-MANAGER/ANNUAL-REPORT/2016-2017/EN/PDF/3.PDF

Biomass Energy: State Focus In India, around 70 Cogeneration projects with surplus capacity aggregating to 800 MW are under implementation 1. Leading states for biomass power projects are Maharashtra, Uttar Pradesh and Karnataka. Other states with favorable policies and opportunities includes: Punjab http://biomasspower.gov.in/statewise-policy-punjab.php and; Bihar http://biomasspower.gov.in/state-wise-policybihar.php Biomass Energy Potential (as on 20 March 2016) 3 State-wise Grid Interactive Bio-Power Installed Capacity (MW) (Biomass / Cogeneration and Waste to energy) 2 1 HTTP://MNRE.GOV.IN/SCHEMES/GRID-CONNECTED/BIOMASS-POWERCOGEN/ 2 HTTP://MNRE.GOV.IN/FILE-MANAGER/ANNUAL-REPORT/2016-2017/EN/PDF/3.PDF 3 HTTP://BIOMASSPOWER.GOV.IN/STATE-WISE.PHP

Fiscal Incentives: Biomass Power Generation 1 The government has developed an central policy for biomass and bagasse cogeneration. It includes financial incentives and subsidies, both for biomass projects and sugar mills that use the technology. Government of India (GoI) also gives 10 years Income tax exemption for implementing such projects. Concessional customs and excise duty exemption for machinery and components for initial setting up of Biomass power projects are also provided. Exemption from General Slaes Tax is also available in certain States State governments have also instituted their own incentives and subsidies which differs across the states. Danish Competencies in India The largest Danish actors with activities within the Indian Biomass sector is Andritz and Novozymes. 1 HTTP://WWW.MNRE.GOV.IN/

SUPPLY CHAIN Agricultural inputs and supplies Biomass Production Biomass Collection Biomass Mobilization Bio/Thermo Processing Inputs End Products Seeds Bioenergy Manual Agricultural waste Crop crops Collection aggregation protection Short rotation Automated Municipal solid Biofertilizers crops Collection waste Short rotation Logistics woods Compacting technologies Biomass trading Biomass supply and partnerships Represents Thrust areas in Supply Chain. Maximum Market potential for Danish competencies exists in: Biomass Collection Feasibility studies Biomass Mobilization Research and Development Bio/Thermo Processing Inputs Enzymes Pre-treatment chemicals Advanced technologies for thermal conversion Energy/ Gas Biorefining Bioplastics manufacture Synthetic rubber Other HTTP://WWW.EAI.IN/REF/AE/BIO/BIZ/BIOMASS_BIZ_OPP.HTML

PEST ANALYSIS FOR RE SECTOR POLITICAL ECONOMIC Opportunities Meeting Sustainable Development Goals (SDG) Goal 7: Affordable and Clean Energy; Goal 13: Climate Change and; Conducive Policy & Regulatory Framework for promoting RE and ease to do business Availability of funds Upgrading regulatory mechanisms and Integration of RE into national grid Interest of both international and national private entities in the sector Threat Non availability of financial resources for supporting RE Political support at the State Government level/institutions vary widely Lack of interest to support such resources by other ministries Opportunities Meeting Sustainable Development Goals (SDG) Goal 8: Decent Work and Economic Growth; Goal 17: Partnerships for the Goals Increasing oil-prices and energy demand Increasing gap in energy supply and existence of regions in the country with no access to grid power Decreasing availability of conventional fuel sources such as coal Possibility of significant reduction in costs of solar, wind and storage technologies Threat Availability of subsidies for diesel, kerosene, cooking gas Financial institutions are becoming riskaverse Reducing financial attractiveness of the market and maintaining cost competitiveness vis-à-vis international markets

CONTD. SOCIO-CULTURAL TECHNOLOGICAL Opportunities Significant potential of employability Meeting Sustainable Development Goals (SDG) Goal 8: Decent Work and Economic Growth Threat Resistance from local community/ end-users towards use of certain technologies (e.g. waste to energy) Opportunities Meeting Sustainable Development Goals (SDG) Goal 9: Industry, Innovation and Infrastructure Technology break-through in solar, small wind turbines, lowcost storage solutions Threat Inadequate transmission system capacity Infrastructure bottlenecks New technology breakthrough second generation biofuel technology breakthrough

RE OPPORTUNITIES IN INDIA RE Missions Jawaharlal Nehru National Solar Mission - The objective of the mission is to establish India as a global leader in solar energy National Biogas and Manure Management Programme Solar: Lantern Programme, Solar thermal energy Demonstration Programme; Remote Village Lighting Programme National Biomass Cookstoves Initiative National Offshore Wind Energy Authority Small Hydro Power Programme India s Energy Storage Mission Business Opportunities Energy Storage Market is expected to grow to 70 GW by 2022. India s market for EV batteries is worth of $300 billion from 2017 to 2030. Forecasting and scheduling regulations have been notified by many states namely Karnataka, Andhra Pradesh, Rajasthan and Madhya Pradesh. Green Energy Corridors have been designed to strengthen the inter- as well as intra- state transmission intra-state as well as inter-state transmission infrastructure. Wind Repowering policy has been issued by Ministry in 2016 for wind-turbines installed before the year 2000 with capacity below 500 kw at sites having high wind energy potential. Wind-Solar Hybrid policy draft has been prepared by MNRE in 2016, having up to 10 GW of hybrid capacities by FY 2022. Wind Bidding Scheme has been enabled for Discoms of the non-windy States through purchase of wind power at a tariff determined by transparent bidding process. Grid-interactive RE power based projects (wind, biomass, small hydro and solar) are driven by private investments having favourable tariff policy regimes. HTTP://WWW.MNRE.GOV.IN/

KEY CONTACTS Contributors Deepshikha Sharma, PhD (deesha@um.dk) Senior Commercial Advisor: Cleantech Twinkle Jawrani, (twijaw@um.dk) Innovation Officer Anandita Prakash, (anapra@um.dk) Innovation Consultant Rasmus Soltendieck, (rassol@um.dk) Innovation Intern Contact Address Innovation Centre Denmark, Royal Danish Embassy, 11 Golf Links, New Delhi - 110 003, India. Phone: 00-91 (11) 42090700

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