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| Renewable energy power: an Indian perspective Energy Technology News, Issue 6 and 7, January and April 2002
Status and issues in India Like in other developing countries, there is a wide gap between demand and supply in India. There is also considerable environmental and resource degradation because of a higher dependence on fossil fuels. This dependence on fossil fuels, which are imported, exacerbates its foreign exchange debt burden. These factors, along with the country's large endowment of renewable resources, suggest that the development of RE (renewable energy) will go a long way in meeting the challenge of providing clean power in India. When considering RE power options, both grid-connected power and distributed power generation are important areas, especially for India, which has a high population living in rural areas.
The MNES (Ministry of Non-Conventional Energy Sources), Government of India, has undertaken measures to facilitate the growth of both grid and off-grid RE power through specific programmes. Major programmes in India for power generation include wind, biomass (cogeneration and gasifiers), small hydro, solar, and energy from wastes. The contribution of renewables to the total installed capacity of electricity generation has been rising, and as of 31 December 2001, the cumulative installed capacity of RE power sources totalled 3387.08 MW (MNES 2002), representing more than three per cent of the total installed capacity in India. The contribution of RE sources is shown in Figure 1a. The total potential of renewables for power generation is estimated to be 82000 MW with the major contribution coming from wind energy (Figure 1b). Thus the contribution of renewables to the overall power scenario is expected to increase substantially. The Draft Renewable Energy Policy, prepared by the MNES, has set a goal of 10000 MW to be added the total power generation capacity through renewables, which is about 10% of new power generation capacity additions, by the year 2012. The status of different renewable technologies and related issues are discussed below. India is the fifth largest producer of wind power in the world after Germany, the US, Denmark, and the UK, with a wind power generation achievement of 1507 MW, of which 1444 MW has come through commercial projects (MNES 2002). The wind speeds in India are in the low wind regime with average wind speeds between 17 and 24 km/h. However, with a wind power potential of about 45000 MW, there is significant room for advancement. Wind has the highest potential in the country and is expected to contribute 60% of the above-mentioned target of power generation from renewables. State-of-the-art wind power technologies, too, are now indigenous, with wind electric generators up to 1250 kW being developed and manufactured in the country. The C-WET (Centre of Wind Energy Technology) in Chennai is a specialized institution in this field. Research and development, standardization, testing and certification, along with resource assessment, are undertaken by C-WET. India has established a good manufacturing base with about 12 manufacturers of wind turbines and allied equipment. A new concept of mega wind farms owned by the private sector is being tested in India to increase the penetration of wind power, and invite greater participation from the private sector. The advantage of such an approach will be reduced capital cost. Mega wind farms can also negotiate a better power purchase agreement with the utilities. India has a huge biomass potential owing to the large quantities of agricultural, forestry, and agro-industrial residue produced. The present capacity of biomass-based power generation totals 358 MW (including cogeneration and biomass gasifiers) (MNES 2002). Bagasse-based cogeneration involves the use of bagasse _ the residue left after sugar cane is crushed to extract the juice _ as a boiler fuel by sugar mills to cogenerate (both steam and electric power) for mill operations. While some sugar mills become self-sufficient by using bagasse, a few also produce surplus electricity to sell to the grid throughout the year. This is made possible by burning the bagasse more efficiently during the harvest season and using fossil fuels/alternative biomass during the off-season. Cogeneration provides an additional source of income for the mill and a source of green, renewable power to the utility. In the area of small-scale biomass gasification, significant developments in technology have made India a world leader. A total of 42.8 MW biomass gasifier power capacity has so far been installed in India, mainly for stand-alone applications. Biomass gasifiers capable of producing power from a few kilowatts up to 500 kW have been successfully developed indigenously and are also now being exported to the developing countries of Asia and Latin America, and also Europe and USA. A large number of installations for providing power to small-scale industries and for the electrification of a village or group of villages have been undertaken. Such examples include the installation of a 100 kW capacity rice husk-based gasifier in a rice mill in Andhra Pradesh, and a 5 × 100 kW biomass gasifier on Gosaba Island in the Sunderbans area of West Bengal, which is being successfully run on a commercial basis to provide electricity to the inhabitants of the island through a local grid. India has instituted a National Programme on Biomass Power/Cogeneration to establish the techno-commercial potential of power generation from biomass materials.
India has one of the largest SPV (solar photovoltaic) markets, driven by government programmes of subsidies, tax, and financial incentives that began in the 1980s. Loans and financing schemes have supported private sector sales, while subsidies have been provided for the installation of solar home systems. Significant progress has been made in the deployment of small-capacity stand-alone PV systems in the country. Under the PV programme of the MNES, over 610000 systems aggregating to over 20 MW have been installed (MNES 2002). This includes solar lanterns, home lighting systems, streetlighting systems, water pumping systems, and an aggregate capacity of about 1.2 MW of stand-alone power plants. A new niche application of PV stand-alone power plants is in the unelectrified areas. It is estimated that for the 18000 unelectrifiable villages in India located in far-flung areas inaccessible to the grid, stand-alone SPV systems will be instrumental in providing a limited amount of electricity. The MNES is designing a programme to undertake this task. Grid-interactive PV systems for tail-end applications (voltage boosting) in remote sections of the grid, and peak load shaving are also focus areas. An integrated solar combined cycle power project is planned at Mathania in the state of Rajasthan. This plant of total capacity 140 MW has a solar thermal component of 35 MW, based on the parabolic trough collector technology. The National Programme on Energy Recovery from Urban and Industrial Wastes in India aims at promoting efficient and proven technologies for the treatment, processing, and disposal of wastes, not only as a means of improving the waste management practices in the country, but also for augmenting power generation. A wide range of waste material can be used to recover. Municipal solid waste comprises mainly domestic refuse, with some commercial waste. A technology for processing municipal waste to get fuel briquettes, that will be burnt in burning moving grate boilers, is being experimented upon. The total installed waste-to-energy generation capacity was 17.08 MW (MNES 2002).
The potential for small hydro (up to 25 MW) is estimated to be 15000 MW, mainly in the hilly areas of the sub Himalayas and the north-eastern regions of India. There are over 420 small hydro projects aggregating 1423 MW in India (MNES 2002). These projects are spread throughout the country in hilly regions as well as on canal drops. The small hydro is also seen as a potential source along with PV for providing decentralized power in remote areas. The thrust of the MNES is to achieve development of the small hydro projects through private sector participation.
Policy and financing issues India faces the challenge of mobilizing investments for renewable power generation. Challenge is in terms of encouraging private sector investment for large-scale grid-connected projects and also in mobilizing resources for rural areas for off-grid generations. The MNES guidelines to state utilities for buying power from renewables include a provision of higher purchase rates for renewable power, wheeling and banking power, and third-party sale using the utility grid. Ten states have accepted the MNES guidelines with some variations in wheeling, banking, and third-party sale rules. A new legislation, the Electricity Bill 2001, supports renewables utilization, a new feature. Fiscal incentives are being offered to increase the viability of RE projects, the main incentive is 100% accelerated depreciation. This incentive is under review and a reduction to 60% is proposed from the year 2003/04. Other incentives include a tax holiday, lower customs duty, sales tax, and excise tax exemption for RE projects. The Indian Renewable Energy Development Agency is the main financing institution for renewable energy projects. It offers financing the renewable projects with lower interest rates, which vary with the technology, depending on it the commercial viability. Though interest rates are falling in India, they are not in the renewables sector for various reasons but mainly due to perceived high risk. The interest rates vary from 11% (for biomass cogeneration) to 14.5% (for wind). The CDM (clean development mechanism) would offer an additional stream of revenue making renewable energy projects more attractive. Preparatory activities for using CDM to promote renewable energy projects are at an advanced stage in India with basic activities such as establishing baselines for different applications of renewables undertaken by the MNES. Renewable power projects, which result in a substantial reduction of greenhouse gas emissions at an attractive cost with frameworks for wheeling, banking, and arriving at a buy-back price for electricity, will be appealing as CDM projects. In this context, the wind energy, waste-to-energy, and biomass power projects are seen as CDM projects with the highest potential.
Role of regulators in advancing RE power The power sector in India is undergoing a reform process, characterized by the unbundling of functions, ownership changes (privatization), the emergence of competitive markets, and the establishment of regulatory commissions. In such a scenario, with an increasing commercial orientation, government policies and regulatory approaches will have a significant influence in the development of various forms of renewable energy sources. Since 1991, India has opened up electricity generation to the private sector by encouraging `unbundling' of energy transmission, distribution, and generation, and establishing a national regulatory commission. Power is a state subject and the role and policies of the SERCs (state electricity regulatory commissions) are vital for renewable, which are mainly driven by central policies. Unlike other developed countries, particularly those in Europe, the absence of legislation for the mandatory purchase of renewable power, absence of a green power market, and financially weak utilities are some of the barriers the SERC is facing while promoting the renewable power.
Conclusion The very high potential of renewables, the MNES target of realizing 10% of new capacity additions through renewables, some renewable technologies becoming financially viable (e.g. biomass cogeneration), an established institutional framework with industrial base, increased awareness of environmental issues and energy security issues are the factors that will help the penetration of renewable power. However, this depends on how the challenge of adopting to the changing face of the power sector in India is handled.
Reference MNES (Ministry of Non-Conventional Energy Sources). 2002
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