Renewables - present scenario & future perspectives
Why should an investor get excited with lower interest?
1) Because, it inherently carries lower risk than other bonds. 2) In case of a green bond, "proceeds are raised for specific green projects, but repayment is tied to the issuer, not the success of the projects." 3) This means the risk of the project not performing stays with the issuer rather than investor.
What are the risks and challenges?
1) Certifying a green bond: a. The Green Bond Principles are voluntary guidelines issued by the International Capital Market Association which states the procedure for certifying a green bond. b. These encompass the use of proceeds, the evaluation procedure, the management of proceeds, and financial reporting. c. Globally, there have been serious debates about whether the projects targeted by greenbond issuers are green enough. There have been controversies too. i. For instance, Reuters a few months back reported how activists were claiming that the proceeds of the French utility GDF Suez's $3.4 billion green bond issue were being used to fund a dam project that hurts the Amazon rainforest in Brazil. d. Therefore, these guidelines issued by the International Capital Market Association are lacking in specifics, leading to a lack of consensus on what classifies as a green bond. 2) There could also be a currency risk: a. From an Indian perspective, a challenge of making investors subscribe could be the tenor and rating of green bonds. b. The downside is that green bonds in India have a shorter tenor period of about 10 years in India whereas a typical loan would be for minimum 13 years. This is less when compared to many international issuances. c. Many target buyers of Indian green bonds may not invest in any bonds that are rated lower than the AAA-
What are its benefits?
1) Green bonds enhances an issuer's reputation, as it helps in showcasing their commitment towards sustainable development. 2) It also provides issuers access to specific set of global investors who invest only in green ventures. 3) With an increasing focus of foreign investors towards green investments, it could also help in reducing the cost of capital.
Still, why are green bonds an attractive option?
1) Green bonds typically carry a lower interest rate than the loans offered by the commercial banks. Hence, when compared to other forms of debt, green bonds offer better returns for an independent power producers. 2) As these bonds are meant for specific investors looking to invest in renewable energy projects, pricing could be attractive. 3) Green bonds can provide a long-term source of debt capital for renewable infrastructure projects.
Schemes to promote solar energy
1) Jawaharlal Nehru National Solar Mission 2) Renewable purchase Obligation and Renewable Energy Certificate 3) Solar City 4) International Solar Alliance 5) Integrated power development scheme
Reasons why India seems to be struggling—
1) No single pathway to achieving the targets, particularly vis-a-vis solar and biomass-based energy. 2) Renewable energy is often conflated with solar power 3) Renewable energy is restricted to electricity
Why solar energy is sort after to address energy security?
1) Solar energy is radiant light and heat from the Sun harnessed using a range of ever-evolving technologies such as solar heating, photo voltaic, solar thermal energy, solar architecture and artificial photosynthesis 2) It is a renewable energy source 3) Environment friendly 4) Solar energy is the world's most abundant energy source 5) Technology used to convert the sun's power into electricity does not produce smoke (carbon dioxide and other air pollutants).
Challenges in promoting solar energy
1) Under National Solar Mission government has set an ambitious target of 100GW solar energy by 2022. Rural India is going to play an important role in this because of the easy availability of open space and land to install solar panels. Yet challenges remain, lack of trained manpower is one. Skill India will have major role here in training youth. 2) seasonal and daily variations in availability of sunlight. During rains or fog, sunlight is far less, drastically reducing solar power generation. This variation in production is also the main hurdle in connecting the solar energy to grid. We will need a huge solar storage capacity to ensure reliable supply of solar power. 3) availability of appropriate technology. Though India is producing solar PV cells and modules of its own but world class standards are yet to be achieved. Recently announced International Solar Alliance may help in this regard as one of the objectives of this alliance is to develop new technologies through collaborative efforts. 4) Initial installations of solar energy equipment are also a concern as initial cost of solar installation is relatively high. Government is trying to solve this issue by providing various types of subsidies but still new cheaper technologies would have to be evolved through R&D to make solar energy attractive and sustainable 5) Large amount of land is required— a. Setting up a capacity of 50 Mw in India needs about one square km of land A Gw (1 Gw=1,000 Mw) therefore, needs about 20 square km and 100 Gw will require upwards of 2,000 square km 40 Gw of that by 2022 is to be built on roofs
Some of the key actionable steps would be
1) changing Insurance Regulatory and Development Authority norms for size of investment for insurance companies, 2) creating mandates for provident funds to invest in infrastructure and environmentally sustainable projects, 3) increasing the priority sector lending limit for bank loans under solar energy from a meagre Rs.15 crore, 4) standardising the definition of green to be able to target government efforts in the direction, and mobilising retail savings by way of tax exemption on the lines of Section 80CCF.
Ongoing scheme for development of the following owing to the high solar irradiation
25 Solar Parks Ultra-Mega Solar Power Projects Canal top solar projects One hundred thousand solar pumps for farmers Solarisation of all petrol pumps, toll plazas across country
*What is Green Bond?*
A bond is a debt instrument with which an entity raises money from investors. The bond issuer gets capital while the investors receive fixed income in the form of interest. When the bond matures, the money is repaid. A green bond is very similar. The only difference is that the issuer of a green bond publicly states that capital is being raised to fund 'green' projects, which typically include those relating to renewable energy, emission reductions and so on. Therefore, a green bond is a fixed income instrument for the purpose of raising debt capital through markets. It certifies that the proceeds will be used exclusively for specific "green" purposes.
Renewable energy is restricted to electricity
A number of policy announcements from the current government are directed largely to Re-based electricity whereas for cooking energy, much of the focus has been on rationalising government subsidies. Other applications - heating, cooling, and productive and mechanical power - have received less attention than lighting
Target
Achieve 175GW of renewable power by 2022; of this, 100 GW through solar power. Out of it, 40 GW through rooftop solar panels 60, GW Wind 10GW from bio energy 5 GW Small Hydro Smart cities have made harnessing renewable energy as one of important factors in selecting cities for retrofitting them into urban centres. Government has taken steps like replacing old ACs with more energy efficient machinery and mandatory rooftop panels over all government buildings. However, more than urban areas, rural areas can be transformed through renewable energy
5) Integrated power development scheme
Aims to extend financial assistance against capital expenditure to all state power dept and private distribution companies to ensure 24/7 power supply to all.
India's renewable power generation portfolio stand at 35.8 GW out of 272.5 GW, but India has the potential of about 895GW from commercially exploitable sources.
Although the share of RE is rising over years, India still has large untapped RE potential. Solar Biogas Small hydro Wind
Engaging in public-private partnerships
Attention should be given to a. Value-for-money and adequate risk-sharing b. Market sounding (which includes evaluating the strength of the private sector market for the project, the private sector's capacity for achieving economies of scale, and its relevant expertise), as well as the potential for risk transfer within the PPP c. Addressing these fiscal implications is particularly important in the case of PPPs for clean energy infrastructure in developing countries for two reasons: i. Because government may have to set aside public funds to support the clean energy infrastructure once it has started operating; ii. Because pricing of the service has important implications for access to energy.
*Clean Energy Investors—WANTED*
Biggest challenge for the renewable energy sector in India— Absence of a financial ecosystem fit to purpose and fit to scale
*The future: Decentralized power supply*
Centralized generation and grid based distribution • Huge capital investment for developing grid • Suffers from high transmission and distribution losses due to transmission over long-distances and poor maintenance of supply lines
Way Ahead
Different types of financial institutions (banks, non-bank financial companies, multilateral institutions, bilateral funding agencies, institutional investors) must envision their functional roles for different purposes - Strategic level—priority sector lending, loan guarantees Project level—credit enhancement, private equity Ancillary support—evacuation infrastructure, skills, R&D
Conclusion
For the green bond market to have long-term credibility, investors and governments would need evidence that the projects funded have in fact delivered the intended environmental benefits. The Indian government can lead the global push towards green by taking three steps to reduce our races' carbon footprint: standardise "green" bonds as a way to finance environmentally sustainable projects, provide incentives to investing in projects funded by a carbon tax on polluting sources of energy and, finally, increase funds channelled towards investing in environmentally sustainable projects.
The counter argument to the above arguments is that even the demand is inconsistent and governments and utilities do very little on demand-side management.
Further, with improved technologies, renewable generation can be predictable with reasonable accuracy
India's emission reduction targets are in line with national solar mission target of 100GW solar energy by 2022.
Government is speedily moving towards achieving this target by creating a supportive and conductive environment in terms of technology, policy and financial aspects.
The way ahead: Developing a green bond market
Green bonds have been around for a decade but regulation and investment in them is still minuscule compared to the total market for debt mainly on account of lack of green bond standards, low credit rating of potential issuers, and higher cost of issuance. Fossil fuels have always enjoyed huge subsidies throughout their history (namely, subsidised diesel, kerosene and gas) and have contributed to environmental degradation and global warming, it is now apt that clean energy initiatives get equitable treatment. The government essentially needs to increase the funds available for investment in green projects, by providing for specific tax incentives and development of long-term finance markets in general.
How to bridge the Skill Gap in India's Clean Energy Market?
In order to meet the rising demand for a skilled or semi-skilled workforce, three key areas need urgent attention. 1) ramp up training programmes through Skill India 2) focus on semi-skilled jobs in construction, commissioning and operations 3) use the new International Solar Alliance (ISA) framework to accelerate capacity building
What is India's position in terms of solar energy production?
India has become a world leader In 2010, when India launched the National Solar Mission with a target of 20,000 megawatts (MW) of solar power by 2022, it had less than 20 MW installed. Today, India has crossed 5,000 MW. Today, the Indian market is dominated by the photovoltaic (PV) technology, which has an installed capacity of almost 7000 MW. The government has dramatically increased the solar target to 100,000 MW by 2022. Also worth noticing is the fact that the price of solar PV fell from Rs. 17 to Rs. 5 per unit (1 unit = 1 kWh) in the past few years, while the price of solar thermal has remained above Rs. 10/kWh.
Why are green bonds important for India?
India has embarked on an ambitious target of building 175 gigawatt of renewable energy capacity by 2022, from just over 30 gigawatt now. 1) 100GW — is expected to come from solar energy 2) 60GW — from wind energy sources 3) 10GW — from bio-energy Unfortunately, renewable energy is more capital-intensive than coal, and financing this push will require $160 billion of capital, $120 billion as debt, and $40 billion as equity. In simple words, this requires a massive $200 billion in funding. This isn't easy. Currently, most renewable projects are financed by bank commercial loans at 11-12 per cent interest per annum. However, the Indian banking sector is currently going through a balance sheet adjustment; banks are unlikely to be able to expand their balance sheets to be able to finance the additional requirements of the renewable sector. As reports suggest, higher interest rates and unattractive terms under which debt is available in India raise the cost of renewable energy by 24-32% compared to the U.S. and Europe. "India has big goals in terms of renewable energy installations, but a big hurdle has been financing and the cost of financing" Green bonds may be able to fill this gap.
What is the potential of solar energy market in Job creation?
India's 100,000 MW solar-target could generate more than one million jobs by 2022, primarily in two key phases of a solar project's lifecycle: construction and commissioning (806,800, accounting for 72 per cent of new solar jobs), and ongoing operations and maintenance, or O&M (263,400; 23 per cent of new solar jobs). These projections do not include jobs created in the manufacturing sector, another significant jobs opportunity
4) International Solar Alliance
It is an initiative by the government of India to accelerate the deployment of solar energy for universal energy access and energy security for the future. It was launched at the COP 21 to the UNFCC. The collective aims is to undertake initiatives to reduce the cost of technology and finance instruments to mobilize 10,00 billion worth of investments by 2030 to promote affordable energy.
Decentralised Clean Energy Sector needs to take care
Kick-starting new pilot projects or scaling a few interventions Garner clear metrics of success to consolidate the lessons of the past and determine which processes and innovations could be replicated across India
Power generation through biomass gasification
MNRE promotes setting up of biomass gasification based power generation plants by a range of stake holders including self-help groups, civil society institutions, panchayats, cooperatives and the private sector.
If operationalized, this model will revolutionize the way power is produced and consumed in India
Millions of households would produce and consume their own electricity. Thousands of renewable energy based grids would promote millions of small business and social entrepreneurs to create local jobs and build local economies. Living standards in villages will improve which in turn, will ensure women empowerment, better health and education. There cannot be a better development agenda for the country
Way ahead
Much attention is often given to issues such as policy certainty, cost of finance, land acquisition and power evacuation, or credibility of the power-purchase agreements signed. These are all important concerns but issue of skilled labour need to be addressed at the earliest. India needs to create at least 10 million new jobs every year. Understanding the job potential in solar power and matching it to specific skills would be a fillip to the solar mission as well as Skill India
Schemes by the Government
National Wind Resource Assessment: Under this programme state nodal agencies had installed and monitored around 800 dedicated wind monitoring stations of height ranging from 20m to 120m throughout the country. Renewable Purchase Obligation and Renewable Energy Certificate
Co-ordination between different levels of governance
Need to give attention to how respective policies interact and in particular to ensuring that regulations at the national (or federal) level complement those at the local (or state) level Harmonisation of clean energy policy priorities must carefully consider the needs of rural regions, which are more likely to be home to larger-scale renewable energy generation. National policies need to take into account the impact of renewable energy deployment on host communities and thereby, adopt a territorial approach to renewable energy deployment to avoid distortions in land use and relative prices in host communities. RE policy should link energy production to other industries such as farming, forestry, and traditional manufacturing. Regional authorities can foster social acceptance in two ways a. Increasing understanding of renewable energy projects b. Ensuring local benefits, as communities will more willingly accept some of the costs of renewable energy installations if they stand to gain from such investment.
2) focus on semi-skilled jobs in construction, commissioning and operations
Our survey respondents emphasised that some of the skills most challenging to find were not the most technical skills; rather they are basic construction and commissioning skills, including electricians and PV installation technicians. Training programmes focused on fundamental construction, commissioning and operations skills should be expanded across the country.
Sustainable supply of biomass through social forestry
Promotion of Social Forestry in the country through Acts such as Indian forest Act 1927, the Forest Conservation Act 1980, The Scheduled Tribes and other Traditional Forest Dwellers Act 2006 emphasise on the role of forest conservation and rights of the forest dwelling communities, national afforestation programme, joint forest management and the Green India Mission focussing on enhancing the green cover and the quality of forests in India by involving the communities, panchayats and civil society in the process. At household level, government is providing chullahs for efficient usage of biomass. At present, the government is implementing Unnat chulha Abhiyan during 12th five year plan period. This scheme has an overall target of 24 lakh family type cook stoves and over 3 lakh community cook stoves.
What does renewable energy mean?
Renewable energy is generally defined as energy that is collected from resources which are naturally replenished on a human timescale, such as sunlight, wind, rain, tides, waves, and geothermal heat
What are the avenues where these funds can be invested?
SEBI's indicative list includes renewable and sustainable energy such as wind and solar, clean transportation, sustainable water management, climate change adaptation, energy efficiency, sustainable waste management and land use and biodiversity conservation.
Some of the schemes to promote small hydro power
Small hydro power programme: Both public and private sector are encouraged to develop small hydro projects under small hydro power programme WATER MILL PROGRAMME: The scheme aims to create new designs of water mills with the efficiency of 2 to 3 times that of traditional water mills. NATIONAL MISSION ON SMALL HYDRO • The mission is a joint collaboration between central and state governments to enrich remote rural areas in power generation. • To address issues responsible for decline of SHP sector in the country • To regenerate interest of private sector to make investment in this renewable energy sector.
Renewable energy should be generated and distributed through decentralized networks
Smart grids, with mini-DISCOMs, capable of selling and buying power from the main grid can promote penetration of decentralized establishment of solar, wind and mini hydroelectricity power plants. There will be a role for large power plants based on other non-fossil technologies, but this role would be to supplement decentralized generation, which would also reduce, but over a period of time.
Renewable energy is often conflated with solar power
Solar photovoltaic investments have now surpassed wind but there is also the risk of crowding out innovative (but riskier) financing for small hydropower or biomass-to-energy projects
1) ramp up training programmes through Skill India
Solar sector employers find the poor quality of current programmes as the biggest hurdle. They do not meet industry needs and are often not located near solar hubs where they are most needed. High-quality and accessible certification programmes, which reduce the need for and costs of on-site training, are a big opportunity Under Skill India, renewable energy training clusters could be located near ongoing solar energy projects. At least one prominent solar training institute could be established in each region projected to be a hub for major solar activity (e.g., Gujarat, Rajasthan, Karnataka). In the interim, mobile training courses, where trainers move from one location to another, would add value.
*Solar Thermal Technology versus Solar PV Technology*
Solar thermal, which concentrates sun's rays to produce heat (steam), is used to drive turbines. This heat energy can be stored and used to generate electricity when there is no sunlight; this makes it cost-effective in comparison with battery storage. Worldwide, most solar thermal power plants have incorporated thermal storage. Solar thermal with storage facility can be used to overcome intermittency and provide steady power to grids; however, the inclusion of thermal storage increases the capital cost further. In India, solar thermal technology had limited success in the initial phase of the National Solar Mission owing to challenges in terms of financial closure, sourcing of critical components of the power plant, etc., and this led to a substantial delay in their commissioning. This also resulted in a reduction of the allotted target in the subsequent phases. Also, the capital cost of solar PV reduced from Rs. 12.5 crore/MW to Rs. 5.8 crore/MW, whereas that of solar thermal remained at Rs. 12 crore/MW. This led to the dominance of PV in the Indian market. Hence, solar thermal has not been able to compete with solar PV.
2) Renewable purchase Obligation and Renewable Energy Certificate
The Electricity Act and National Action Plan on Climate Change (NAPCC) provide a roadmap for increasing the renewable energy in total generation Renewable Purchase Obligation (RPO) is the obligation mandated by Central/State Regulatory Commission and is applicable to 1) Distribution Licensee: power distribution companies (DISCOMs); 2) Open Access Consumer: those procuring power from power exchanges (IEX/PXIL), from traders, through bilateral agreements, etc. The Regulatory Commission in each State mandates a certain percentage of electricity generated through the above process to be from renewable sources. Renewable Energy Certificate (REC) - a tradable certificate of proof that 1 MWh of electricity has been injected (or deemed to have been injected). The REC mechanism seeks to address the mismatch between availability of renewable energy sources and the requirements of obligated entities to meet their RPO. Distribution companies, open access consumers and captive consumers have the option of purchasing renewable power or RECs to meet their obligations.
3) use the new International Solar Alliance (ISA) framework to accelerate capacity building
The ISA could establish certified training programmes, help to build common curricula in close consultation with the private sector, and make the workforce qualified for deployment within India and outside
3) Solar City
The Solar City aims at minimum 10% reduction in projected demand of conventional energy at the end of five years, through a combination of enhancing supply from renewable energy sources in the city and energy efficiency measures. The basic aim is to motivate the local Government for adopting renewable energy technologies and energy efficiency measures.
Beyond energy access
The biomass energy sector provides ample opportunities for job creation In India. At present 35,000 people are engaged in employment through biomass on grid systems in 2009. One report from Ministry of Human Resource Development has projected that the sector has the potential to create 60,000 to 1 lakh jobs by 2020.
Biomass briquetting
The government also promotes the usage of biomass pellets or biomass briquettes for industrial and households purposes. Briquettes allows for efficient use of fuel for thermal processes
Initiatives for solar energy
The government of India has recently declared its intended nationally determined contributions towards realising the ultimate objectives of UNFCC. The plan is for reduction in the emission intensity of its GDP by 33 to 35% from 2005 level, by 2030 and to create additional carbon sinks of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.
Way Forward
There is no reason that can hold back India in reaching the ambitious renewable energy targets of current FYPs. Change in accelerated depreciation in wind sector can affect only to limited extent and REC market will continue to bear fruits for investors. Wind industry has achieved a lot, but the next milestone can only be achieved if the stake of rural sector goes beyond selling mere land. But this cannot be a one way initiative, the government including the local panchayats and the local set up should also come up with an open-minded and positive approach, and embrace the opportunity.
The current rate of installing new electricity capacity
United States is about 10 gigawatts (GW) per year. When China was growing at 10 per cent, it was installing about 100 GW annually. India is somewhere in between, installing 28.6 GW in 2015, 21.7 GW in 2014 and 22.9 GW in 2013. Building energy infrastructure quickly is a daunting proposition. It needs money, material, and men. How fast India builds its renewable energy capacity will depend in a very big way not just on political will and policy announcements but on how quickly it can find and train thousands of skilled workers
Way forward and conclusion
Using a mix of energy sources has become necessary to meet the growing energy demand of the country; in this context, biomass energy has a big role to play in the coming years. At present there is a dire need to formulate polices for facilitating policies R&D in the area of biomass energy.
*Biogas*
a clean energy alternative
No single pathway to achieving the targets, particularly vis-a-vis solar and biomass-based energy.
a. Each pathway requires different financial models b. Much focus has been on trying to secure commitments for grid-scale projects (investments were up 80 per cent in 2015). But the Indian financial system has not innovated enough to move the needle on smaller scale and decentralised energy projects.
Efforts need to be made to support some state governments in
a. Issuing green bonds - regulatory guidelines— restructuring one as a green bank b. Innovative ideas for RE finance c. Small-scale projects like rooftop d. Aggregation of projects to create investible portfolios for institutional investors e. Establishing terms on which these systems would integrate when the centralised grid extends its reach f. Find balance between rural projects (with likely more development co-benefits) and urban sites (where commercial opportunities to scale might be greater).
Even as India has aggressively scaled up its renewable energy targets, the financial commitments have not kept pace. Hesitation among investors stems from many reasons
a. Need for large upfront capital and long-term debt; b. Worries about the credibility of contracts; c. Project delays; d. Uncertainty about revenue flows; e. Foreign exchange risk; f. Technology and product efficiency concerns
Bio Gas can be utilised for
cooking, lighting, power generation and automotive fuel. For automotive fuel application, raw biogas needs to be upgraded to natural gas quality. This means— carbon dioxide, hydrogen sulphide, ammonia particles and water have to be removed so that product gas has a methane content of more than 90 % by volume. This upgraded gas is generally referred to as Bio-methane. This upgraded gas is bottled at pressure of 200 bar, referred to bio CNG. Bio gas production from various available biomass resources is a viable option for our country as it is environment friendly, clean, cheap and versatile.
*Small hydro power*
lighting remote villages
*Emissions from coal based power plants*
• 80% of mercury • 60% of particulate matter emissions • 50% of SO2 emissions • 30% of NO2 emissions It accounts for half of the greenhouse gas emissions and 70% freshwater withdrawal for industrial purposes in our country Mining impacts the livelihood of tribal population and also causes substantial destruction of dense forests. This makes it imperative for the nation to adopt a sustainable development model powered by environment friendly renewable energy
Solar power
• Being a tropical country, India can use solar power in off-grid to light up villages in remote interiors and islands. • Many government schools and hostels in rural areas are making efficient use of solar power • Even healthcare is provided in some areas through solar power. However, all medical instruments run on AC power, hence no operation is performed. • In Sundarbans, solar powered vehicles on pilot basis are used instead of rickety gas spewing rickshaws. It has been well received
Why should we shift to Bio Gas?
• Deteriorating air quality due to pollution • Huge import bill for petroleum is a constant drag on our forex reserves As a result renewable energy is an excellent solution for this problem. Bio gas is produced from anaerobic digestion of any organic material. Constituents of Bio gas • Methane • Carbon di oxide • Water vapour • Hydrogen sulphide
*Wind energy*
• In states like Karnataka and Tamil Nadu, wind farms dot the rural landscape and produce enough power in decentralised power to be fed in power grid. • In high altitude regions like Himachal Pradesh, during heavy snowfall, there is constant power outs. However, the skies remain bright and clear and steady wind is generally guaranteed. Thus, hybrid solar-cum wind power have been a boon in such areas. • However, those displaced from lands on which such farms are built, are deprived off their livelihoods , identity and homes
Current scenario of biomass energy
• India has a biomass power potential of 17,000 MW and a potential of another 5000 MW from bagasse based cogeneration in sugar mills. • Biomass power constitutes 12.66% of the total installed renewable based power generation capacity • India has a cumulative installation of off grid / decentralised bio mass energy systems of over 500 MWs Government of India is taking various steps to increase the Bio Gas facilities
Scenario of wind energy in india
• It contributes up to 70 percent of India's total renewable energy production • India's wind energy potential is 1,02,788 MW but installed capacity is 26,743 MW; Gap needs to be filled
National biogas and manure management programme
• It is a central sector scheme. • It provides for setting up of family type biogas plants mainly for rural and semi -rural households
Biogas based distributed
• Ministry of new renewable energy has also started a scheme biogas based distributed from 2005-06 with a view to promote biogas based power generation, especially in the small capacity range. • The Ministry of New and Renewable Energy, Government of India is contemplating National Biogas Mission for setting up of 1 crore biogas plant by 2022
Problems facing Wind Energy Sector
• POWER PURCHASE AGREEMENT (PPA) - it is a contract between electricity generator and the power purchaser. The PPA is often regarded as the central document in the development of independent power plants, and is the key in obtaining financing for the projects. The delay on the part of state governments and utilities to sign power purchase agreements has put developers in a blind spot about the future of their projects and this is affecting the growth of the sector. • Wind mills should be located where strong dependable winds are available most of the time. • Winds do not blow strongly enough to produce power all the time. Energy from windmills is considered intermittent. Therefore electricity from wind farms must have back up supply from another source • Difficult and expensive to repair wind turbines and its blades which are subjected to damage from high winds and lightening. • Electricity produced by wind power sometimes fluctuates causing difficult in linking its power to a utility system. Estimations speak of millions (by some estimates more than 10 million) of birds getting killed all over the world every year by wind turbines Each turbine installation consumes large amounts of concrete and steel, PVC and fibre-reinforced plastics (materials with cruel footprints) Offshore Location: Problems connecting to the grid due to the necessity of laying undersea cables Will incur much higher maintenance costs due to the corrosive effects of sea water
Advantages of small hydro projects
• Small hydro projects are normally along the run off river; no dam is constructed • Do not encounter the issues associated with large scale hydro projects of deforestation, resettlement, and rehabilitation • Have the potential to meet power requirements of remote and isolated areas • Have long useful life and the generation cost is almost inflation free • Are beneficial to environment as they substitute thermal power there by reducing carbon emissions • These projects have the potential to turn around economic activities in local areas, villages and remote areas.
1) Jawaharlal Nehru National Solar Mission
• The Jawaharlal Nehru National Solar Mission was launched on the 11th January, 2010 by the Prime Minister. • The Mission has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022— aimed at reducing the cost of solar power generation in the country through a. Long term policy; b. Large scale deployment goals; c. Aggressive R&D; and d. Domestic production of critical raw materials, components and products, as a result to achieve grid tariff parity by 2022 • Mission will create an enabling policy framework to achieve this objective and make India a global leader in solar energy.
Constraints in settling up Small hydro power projects
• The difficult locations where SHP projects are normally setup • Short working season in hilly areas • Involvement of forest and private land in settling up of SHP projects • The risk due to natural calamities in setting up SHP projects are high • Sometimes the developers face resistance from local residents • The SHP projects are governed by the state policies and the potential sites are allowed by the state governments to private developers- often there is a delay in land allocations • Delay in clearances including land acquisition, forest clearance, irrigation clearance etc. • Inadequate evacuation facilities for power generated from SHP