Cement, Energy and Environment

RENEWABLE ENERGY TRENDS & DEVELOPMENTS IN INDIA India is aiming to escalate the contribution of renewable power in the fuel mix significantly. This is evident from the National Action Plan on Climate Change's mandate to achieve a minimum renewable energy procurement of 10 per cent by 2015, 12 per cent by 2017 and 15 per cent by 2020 as compared to the current 4 per cent. This translates into a renewable energy capacity requirement of about 50,000 MW by 2015 and over 80,000 MW by 2017. This implies that India needs to add 6,500 - 9,000 MW of capacity annually in the next five to seven years as compared to annual additions of about 2,000 MW in the past two– three years. In the next five years, most of the additional capacity could come from wind, which is expected to contribute 17,000 - 20,000 MW. This would be followed by solar, which is expected to add 4,000 - 6000 MW, and cogeneration, biomass and small hydro power, which together are expected to add 5,500-6, 500 MW. However, the renewable energy sector is at a crossroads, with its role expected to change significantly in the country's electricity consumption pattern as envisaged by the government. While a supportive policy and regulatory framework is being created to support the developers, there has, so far, been no concerted effort to expand the manufacturing supply chain, barring in a few states. The major issues facing manufacturers are lack of access to technology, and inadequate availability of critical components, distribution network, logistics and infrastructure. It is imperative for the government and the industry to resolve the issues and concerns in the manufacturing supply chain for the sector to be able to achieve the expected capacities and ultimately generation. Courtesy: Renewable Watch, February2011, Pp 12-14. Wind power tariff trends in key states RENEWABLE ENERGY TARIFF TRENDS Renewable power tariffs have shown an increasing trend in recent years. The various state regulators have taken cognizance of the increasing capital costs and raw material costs, and have revised tariffs upwards. Tariffs for biomass and bagasse-based cogeneration have been increased significantly in a number of states. Wind, being a mature technology, has witnessed a low growth in tariffs over the years. Most states offer attractive tariffs for solar power in order to encourage its development. All in all, the state regulators have the difficult task of balancing the cost of subsidy with adequate returns for promoting capacity addition in the renewable energy sector. In order to address climate concerns, capacity addition in the renewable energy sector is a must, which can happ~n with preferential tariffs. Since different technologies are at different stages of maturity and a good mix of all technologies is important, differential tariff support is essential. State Tariff order Tariff Escalation Tamil Nadu Maharashtra Karnataka Andhra Pradesh Madhya Pradesh Gujarat March 2009 May 2006 November 2003 December 2009 January 2005 May2009 March 2004 May 2010 November 2007 March 2006 Draft order No. 2 of 2009 August2006 Source: Tariff orders of respective SERCs (Rs per kWh) 3.39 2.90 Fixed for 20 years 3.50 Re 0.15 per year for 13 years 3.70 No escalation 3.40 No escalation 3.37 Fixed up till March 2014 3.37 Fixed for 5 years 4.35 Fixed for 25 years 4.03 Reducing to As. 3.36 by the 5'" year, constant at Rs.3.36 from the 5'" to the 20'" year 3.97 Reducing to Rs.3.30 by the 5'" year, constant at As. 3.30 from the 5'" to the 20'" year 3.55 Fixed for 20 years 3.37 Fixed for 20 years 39