Renewable Energy: Global Scenario

• New cleaner generation is needed to meet climate targets accepted globally

• More stringent regulatory requirements for a low-carbon future will force companies everywhere to make significant changes in their business models

• In the power sector, which has the least complicated path to decarbonisation, average investment costs in solar power have fallen between 40% and 80% since 2010

• The renewable energy technologies have now earned a firm place in the investment landscape as a main strategy for many investors looking to diversify early and become part of the future value chain

• Asia-Pacific market is emerging as one of the top targets for investment houses, utilities and funds with a global focus in the renewable energy space.

  • o In the coming years the stage is all set for the Asia-Pacific region, along with the Middle East, to host the world’s most interesting deals in renewable energy.

• Total global renewable power capacity increased to almost 2,017 GW by the end of 2016, representing a growth of nearly 9% as compared to 2015

• Globally, more renewable power capacity was added in 2016 than the combined power capacity added from all other fossil fuels, combined

  • o In 2016, renewables accounted for an estimated nearly 62% of net additions to global power generating capacity.
  • o Solar PV observed record additions andaccounted for more additional capacity, net of decommissioning, than any other power generating technology.

• Solar PV represented about 47% of newly installed renewable power capacity in 2016, and wind and hydropower contributed nearly 34% and 15.5%, respectively.

Global Growth Drivers:

  • • Decline in prices for renewable energy technologies
  • • Rising power demand in some countries
  • • Targeted renewable energy support mechanisms

Traditional renewable energy technologies, such as hydropower and geothermal energy, has become cost-competitive with fossil fuels. With the advancement of technology and declining prices of technology, Solar PV and wind power are now emerging as the promising power generation option

Renewable Energy: India scenario

• With power generation capacity of 331 GW, India is among the top five power generating countries, globally

• Thermal is the largest contributor to India’s generation capacity followed by renewables

• Contribution of renewables has grown significantly from 10% in 2010 to 15%, currently

  • o India is the 4th largest producer of wind energy with installed capacity of 27GW
  • o In Solar power generation capacity, the country is among the top 10 nations, globally
  • o In the coming years, Country is set to become the fourth largest solar power market after China, USA and Japan

• Aforesaid has resulted post Government of India’s focus on renewables. Key initiatives taken by the central government include:

  • o Fiscal Concessions such as Viability Gap Funding, concessional excise and custom duties, capital subsidies for off-grid systems and budgetary support for R&D
  • o The Government of India has set a target of 175 GW renewable power installed capacity by the end of 2022. This includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass power and 5 GW from small hydro power.

• Currently India has an estimated renewable energy potential of about 900 GW.

• Government of India is set to achieve 40% of its earmarked target of cumulative electric power capacity from non-fossil fuel energy resources by 2030.

• India has increased its solar energy production capacity by 370 % in 2014-17.

• Year 2016-17 recorded highest ever addition of 5.5 GW of wind energy.

• 34 solar parks of aggregate capacity of 20,000 MW have been sanctioned across states in India. INR 356.63 crores has been released to Solar Energy Corporation of India for the projects.

Table : All India Target set for various renewable energy sources (in MW)
Source 2017-18 2018-19
Solar Power 15,000 16,000
Wind 4600 5200
Biomass 750 850
SHP 100 100
Grand Total 20,450 22,150

Renewable Energy Growth Drivers: India scenario

“Expected Growth in the sector would primarily led by favourable policies of Government of India”

Wind Energy Sector:

• Full excise duty exemption

• Concessional customs import duty on specified parts and components

• Generation based incentives

Solar Energy Sector:

• Exemption on excise duties and concession on import duties on components and equipment required to set up a power plant

• GBI Schemes for small solar projects (below 33 KV) connected to grids

• Reduced wheeling charges as compared to those for conventional energy

• Subsidy of 30% of project cost for off grid PV and solar thermal projects

• Loans at concessional rates for off-grid applications

Biomass energy Sector:

• Concessional customs and excise duty exemption for machinery and components required during setting up of project

• An exemption of sales tax in certain states

• Financial assistance from IREDA for setting up biomass power and bagasse co-generation projects

Uttar Pradesh Scenario

• UP has capacity to produce 28GW of renewable energy.

• The State Government has set an ambitious objective of annual addition of 1,500 MW production capacity of solar energy.

• Three cities - Agra, Allahabad and Moradabad are declared to be developed as Solar City in Uttar Pradesh.

• Uttar Pradesh has tremendous potential to increase its biomass energy productionin 97,589 villages.

• As Uttar Pradesh is the largest producer of sugarcane and second largest producer of rice in India, the by-products bagasse and rice husk form abundant raw material base for power production in the state.

Key Investment Enablers

• Uttar Pradesh is rapidly increasing its installations for renewable energy production.

• There has been 38% increase in production capacity of grid connected renewable energy in 2015-16.

• 101.4% increase in grid interactive solar power production in 2015-16 was registered in the state.

• There exists a huge gap between current production and estimated production potential, signifying huge investment opportunities in renewable energy sector in UP.

Renewable Energy Generation Potential in UP
Source Production Potential in MW
Solar Energy 22,8300
Wind Energy 1,260
Small Hydro Power 461
Bio Energy (Biomass Power) 1,617
Bio Energy (Bagasse Cogeneration Power) 1,250
Bio Energy ( Waste to Energy) 176
Total 27,593 MW
Renewable Energy Generation Capacity in UP
Production Source Production in MW
Solar Energy
Ground Grid Connected 432
Off Grid 65.35
Rooftop 45.1
Total 537
Biomass Energy
Bio Energy (Bagasse) 1,800
Bio Energy (Non-Bagasse) 201
Bio Energy ( Biomass) 46.5
Effluent Based 108
Gasifier 40
Total 2195.5

Massive decentralised green energy economy exist in Uttar Pradesh with:

• 4.39 lakh biogas plant

• 1, 516 lakh solar water pumps

• 35,852 KW power produced through biomass gasifier, 170 KW produced through Biomass (non- Bagase)

Human Resource Availability

• Existing Training centres in Chinhat-Lucknow and Ghosi-Mau empaneled under Skill Development Mission of State and Central Government for skilling manpower in renewable energy sector.

  • o Trainings on Suryamitra and Solar electric installer and service provider is offered through the aforesaid training centres.

• Training centre in Kannaujis under construction.

• Lucknow is home to Indian Institute of Sugarcane Research (IISR), an advanced research which conducts research on sugarcane and its by-products. This includes putting these by-products to power production.

Government Support

Incentives by Central Government

  • • Foreign Direct Investment (FDI) up to 100% is permitted under the automatic route for renewable energy generation and distribution projects subject to provisions of The Electricity Act, 2003
  • • Bank loans up to a limit of INR 15 crores will be given to borrowers for purposes like solar based power generators, biomass based power generators, wind power systems, micro-hydel plants and for renewable energy based public utilities viz. Street lighting systems, and remote village electrification. For individual households, the loan limit will be INR 10 lakh per borrower.
  • • Provision of roof top solar and 10 percent renewable energy as mandatory under Mission Statement and Guidelines for development of smart cities.

Solar Park Scheme of Government of India

  • • Capacity 440 MW to be set up at 1152.545 hectare land identified in Kanpur Dehat, Allahabad, Mirzapur and Jalaun.
  • • Development of Solar Park by Joint Venture Company between UPNEDA and Solar Energy Corporation of India Ltd.(SECI) named Lucknow Solar Power Development Corporation Ltd.
  • • External transmission and power evacuation infrastructure to be constructed by UPPTCL.
  • • Construction of Solar Power Plants underway in Mirzapur (75 MW), Allahabad (50 MW) and Dakor (40 MW)

Concentrated Solar Thermal Technology (CST) Program

  • • The technology is most suited for generating steam for cooking and industrial heat process.
  • • IREDA gives easy finance upto INR 5 million at subsidized rates under the program with payback period about 5 years.
  • • CST based project capacity 480 sq. mt. reflector area installed at KGMU Lucknow for cooking 3000 meals per day.
  • • Per day fuel saving equivalent to 15 LPG cylinders.

KEY INVESTMENT OPPORTUNITIES

SOLAR ENERGY

• Uttar Pradesh has 22,830 MW of untapped solar energy.

• This enormous energy can be utilized through:

  • o Solar Parks
  • o Mini grid
  • o Solar rooftops

• Grid connected rooftop solar photovoltaic power plant at all the public institutions such as government owned or aided hospitals, research institutions, educational institutions, hostels & training institutions, libraries, establishments of Indian railways, in the State.

A. Mini-Grid Solar Power Plants

  • • Only 13 solar mini grid projects have been commissioned in the state and 3 projects are under installation.
  • • Government of India is providing a subsidy of 30% of the project cost.
  • • Only 53 Mini Grid Solar power plants have been installed in various districts and 10 projects are under installation
  • • Total Installed Capacity of these plants is only 4.9 MW, covering only 90 villages and benefitting 15,800 households.

B. Solar pumps for irrigation

  • • As of now, only 10,191 Solar Pumping systems have been deployed for Irrigation purpose
  • • 10,000 Solar Pumping systems of various capacity 2H.P, 3 H.P and 5 H.P are under construction
  • • State Government is providing a subsidy of 45 % on total cost.
  • • Ministry of New and Renewable Energy will further fund 20- 25 % depending on capacity of pump

C. Value added Solar energy production

  • • At decentralized level solar energy can be utilized through

    o Solar Water Pump

    o Solar Street Lighting

    o Solar RO Plants

  • • Setting up Solar Hydroelectric power plants
  • • Other opportunities include –

    o Manufacturing of PV cells

    o Solar Energy Research &Development

BIOMASS ENERGY

A. Bagasse based co-generation

  • • Total 1,800 MW capacity power generation projects installed in 64 private sugar mill.
  • • There is wide scope of installing power generation plants in sugar-mill belts of UP such as Shajahanpur, Bareilly, Sitapur, etc.

B. Non-Bagasse (agro-residues, rice husk) power projects

  • • Rice Husk based (Grid interactive) –4 projects of total capacity 46.50 MW are installed at Mathura, Ghazipur, Gorakhpur and Kanpur.
  • • Power generation projects of 201 MW have been installed for captive consumption in paper mills, rice Mills and cold storage.
  • • More plants can be set up at Varanasi, Moradabad, Meerut, Gorakhpur, Pilibhit, etc

WASTE TO ENERGY

  • • Presently, 33 projects of 108 MW capacity power projects are operational in UP based on industrialeffluents installed for captive use.

  • • These projects get a Subsidy from Government of India @ INR 50.0 lakhs/MW limited to max of INR 5.0 Cr per project.

  • • With rapidly growing industrial activity in the state, there is wide scope in producing power to industrial waste.

  • • Nonetheless, agricultural waste to energy is another crucial sector in the state seeking investment in the benefit of public health and environment.

  • • Municipal Waste to Energy – Being most populous state of India, and with growing urbanisation, waste management is a major grieving area for Uttar Pradesh. Power from municipal waste offers wide scope for investments towards the cause of Swachh Bharat.