CEE Jan-Mar 2012

FOREIGN FUNDS TO BOOST INDIA'S RE SECTOR Recognizing the growth potential for clean energy in India, many international financial agencies are coming forward to aid development of the sector in the country. Recently, the European Investment Bank (EIB) granted a €200 million loan to ICICI Bank in India for projects in the renewable energy (RE) sector. This framework loan will finance a number of RE projects that would help in curbing greenhouse gas emissions. The funding which marks the EIB's first operation in India will be available only for electricity generating RE projects in solar photovoltaic, biomass, and onshore wind sectors operating in the private sector. The framework loan is part of the 'EU-India Strategic Partnership', which provides for cooperation in various sectors and is provided under the €4.S billion 'Energy Sustainability and Security of Supply Facility' under the EIB. Another noteworthy funding to the RE sector has come from the US project portfolio within single year to 2,200 MW. Courtesy: Green Energy, Sep- Oct. & Nov. -Dec. 2011, P35. GENERATION BASED INCENTIVE SCHEME INTRODUCED a The Ministry of New & Renewable Energy has already introduced Generation Based Incentive schemes sepa ra tely for wind and solar energy. Under the scheme for wind power, a GBI @ INR 0.50 per unit of electricity fed into the grid is provided for a period not less than 4 years and a maximum period of 10 years with a cap of INR 6.2 million per MW. The scheme is in parallel with accelerated depreciation but on a mutually exclusive manner. The total disbursement in a year should not exceed one fourth of the maximum limit of the incentive i.e. INR 1.550 million per MW during the first four years. The Scheme includes captive wind power projects, but excludes third party sale, (viz. merchant power plants). Under the Scheme for Solar Energy, GBI is provided to support small grid solar power projects connected to the distribution grid (below 33 KV) to the state utilities. Indian Renewable Energy Development Agency has government's Overseas Private Investment Corporation (OPIC) which plans to provide $820 million for renewable energy projects in India in 2011. OPIC, which facilitates flow of US private capital into key emerging markets, offers four products - direct loans, guarantees, insurance, and support for private equity funds. According to senior officials at OPIC, about $520 million of the expected investment would come from American companies, wh ile the remaining $300 million will come from private equity investments. OPIC now has a strong presence in India, and has doubled its clean energy selected 78 projects with a total capaci ty of about 98 MW for which the Ministry will provide GBI ofiNR 12.41 perKWhtothe State utilities when they directly purchase solar power from the project developers. The quantum of GBI to the utilities is kept fixed, as a difference of the CERC tariff for 2010 - 2011 (INR 17.91 per kWh) and a reference tariff of INR 5.5 per kWh. These projects are expected to be commissioned during 2011-12. Currently, the scheme is not open to accept new project proposals. Courtesy: Total Energy, Nov.- Dec. 2011, P18. EU'S NEW TARGET: RE BY 2030 MANDATORY In 2009, the European Union set legally binding target of generating at least 20 per cent of energy from renewable sources, in keeping with its objective of reducing emissions by 80% - 95% by 2050 (compared to 1' 990 levels), to prevent a 2 °C rise in temperature. But unfortunately, the said objective is far from becoming a reality. The EU's 'Low Carbon Roadmap for 2050' released in March 2011 estimates that current trend~ and policies would result in only 40 per cent reduction in GHGs by 2050. Based on a series of analytical steps, the European Renewable Energy Council (EREC) has published a report '45 per cent by 2030' calling for a lega lly binding EU target of at least 45 per cent of renewable energy sources by 2030. The report presents the roadmap based on the Baseline Scenario and the Advanced Scenario. Presented below is a brief summary. x RE upto 2030: According to the Baseline Scenario, RE would meet more than 20 per cent of EU final energy demand in 2020 and 30 per cent in 2025. By 2030, RE would account for 498.4 million tonnes of oil equivalent (Mtoe), representing 42 per cent of EU-27 final energy demand. Under the Advanced Scenario, RE is expected to meet 24 per cent of the energy demand in 2020, increasing to 35 per cent in 2025. In 2030, RE would 53