FM Gets Thumbs Up Wind Propels State Races Ahead In RE ‘MAKE IN INDIA’Piyush Goyal, Ajai Jain,MoS (IC), Power, Coal, New & Pg 46 Principal Secretary, Deptt.Renewable and Mines of Power Govt of APPg 17 Pg 56POSTAL REGISTRATION NO.: HD/1153/2014-16 www.energynext.in ` 100 $ 5 € 3Volume 7 | Issue 04 | February 2017 | Hyderabad Your guide to Renewable EnergyRNI NO.: APENG/2010/38296 Date of Publication: 08/02/2017 Date of Posting: 10/02/2017 BUDGET TCRELANENAESNRFGIONISRDEMIA,
IN THIS ISSUE ‘FM presents budget for all’17 Giving his thumbs up to Finance Cover story Minister, ArunJaitley for his vision and action. Minister of State (IC) for Power, Coal Renewable Energy and Mines, PiyushGoyal said, he felt happy to see affirmation of the target for Solar Power addition of 20,000MW in the next fiscalBUDGET ANALYSIS AND REACTIONS FROM EXPERTSSumant Sinha Rahul Munjal Sunil Jain Ratul Puri Rakesh Bharti Rajiv Memani, Ashish Khanna,Founder Chairman Managing Director, CEO & ED Hero Chairman, Hindustan Mittal Chairman, India ED & ceo, Tata& CEO, ReNew Hero Future Future Energies Powerprojects Vice-Chairman, Region & Emerging Power SolarPower Ventures Energies Pvt Ltd Pvt Ltd Pvt Ltd Bharti Enterprises Markets Committee,Pvt Ltd Ernst & Young LLPTulsi Tanti Sarvesh Kumar, Tilak Raj Seth Dinesh Aggarwal, Pratik Agarwal, Sabysachi Sanjeev AggarwalCMD, Suzlon Group Chairman, Indian Head Mobility, Joint Managing CEO, Sterlite Power Majumdar MD and Chiefon the Union Wind Turbine Siemens Director at Anchor Group Head, ICRA Executive ofBudget Manufacturers Electricals Pvt.Ltd Ltd Amplus Energy Association (IWTMA)4 | Energy Next | February 2017
VOLUME 7 | ISSUE 04 | FEBRUARY 2017 www.energynext.in44 46 Wind | Interaction Wind | InterviewWind: A viable ‘The sector trulyinvestment option propels ‘Make in India’Ramesh Kymal, Managing Directorat Gamesa Wind Turbines Pvt. Tulsi Tanti, Chairman and ManagingLtd,says Accelerated Depreciation Director, Suzlon Group, says Indianand Generation Based Incentive wind sector is capable of achievingare big drivers for the industry. 60 GW target by 202249 52 Wind | Focus Wind | In-conversation‘Indian market ‘Indian Marketlooks for Opportunities Galore’innovative Cos.’ Agustin Sanchez TemblequeV. Sai Baba – CEO Solar Business Diaz Pache – Vice President,& President Strategy Business Sales Vestas India talks about theDevelopment talks about growth Wind sector representing a goodopportunities in the wind sector opportunity for investors in India55 MNRE NewsNational Review Meeting ofRenewable EnergyMinistry of New & Renewable Energy organised aNational Review Meeting to review the progress ofeach state in the renewable energy sector.56 58 60 States | Andhra Pradesh States | Madhya Pradesh States | Haryana‘Andhra Pradesh ‘Windfall gains expected ‘Haryana bets big onraces ahead in RE’ with Rewa solar project’ Biomass’ Ajay Jain, Principal Manu Besides solar Secretary, Srivastava, and micro hydel, Deptt. of Power Principal biomass has (Infrastructure Secretary, been targeted as and Investment), Department the next big area Govt of Andhra of New and of development Pradesh, says Renewable says, Ankur Andhra Pradesh Energy, Govt of Gupta, Principal would be adding MP, says around Secretary, 6000 MW of wind 20 companies Department and 5000 MW have submitted of Renewable of solar, a total their bids for the Energy, 11000 MW would upcoming Rewa Government of be added by 2019. project. Haryana February 2017 | Energy Next | 5
FROM THE EDITORReinvigorating RenewablesT ransform, Energise and Clean are the three tenets collector, solar photovoltaic module borrowings or in bonds and Government that define the core agenda and panel for water pumping and other securities to 2020 from 2017. of this year’s budget applications. Similarly, the excise duty on these materials has also been proposed at The Finance Minister has made an endeavor in the 2017-18 Budget to 6% from existing 12.5%. stimulate the development of new cleanannouncements. The Government’s For wind energy sector, custom duty energy technology and has providedfocus this year is on growth and fiscalcaution. The budget has provided and CVD reduction has been proposed fiscal and policy support keeping in viewfunds for infrastructure and to support at 5% from the existing 24% on resin the huge target of 175 GW by 2022. and catalyst for manufacture of castrural economy. The Budget has components for wind operated energyprovided much needed clarity aboutthe government’s focus and priorities generators. The excise duty on thesefor the renewable energy sector. The items has also been proposed to 6%allocation to the Ministry of New and from existing 12.5%. Similarly, dutyRenewable Energy has been increased to reduction to 11% from existing 30%,Rs 5,472.84 crore. has also been proposed on all itemsGiving boost to clean energy sector, of machinery required for balance ofFinance Minister has proposed cuts in systems operating on biogas / bio-excise and customers duties on materials methane / by-product hydrogen.used in solar and wind plants, and also Foreign investment in the sectorannounced the second phase of solar may also see a spurt of growth due topark development for 20 GW capacity. the extension of the applicability of theBesides this, it is also proposed to feed concessional withholding tax rate ofabout 7,000 stations with solar power. 5% being charged on interest earned byThe budget proposal includes foreign entities in external commercialreduction of countervailing duty(CVD) from existing 12.5% to 6% onparts, raw materials for manufactureof solar tempered glass for use in solarphotovoltaic cells, solar power generationequipment or systems, flat plate solar KS Popli Chairman & Managing Director, IREDA February 2017 | Energy Next | 7
LETTERS TO THE EDITORHelping us understanding better, thank you! Enabling Investment Environment Energy Next is a very good initiative that offers the Editor-in-Chief K S Popli comprehensive overview of the renewable energy business. I Publications Director Anupam Daftuar compliment the consistent work of the Energy Next team in highlighting the key developments and challenges of the RE Associate Editor Nidhi Francis sector in India. It is informative and provides an opportunity Associate Editor Anurima Mondal to the core stakeholders to share their views and discuss Sr. Correspondent Pari Saikia major issues and innovations. We look forward to your Correspondent Surbhi Mehtani support in raising the awareness of the mini-grids sector and highlight its potential to address the challenge of energy Design Flying Tusker Media access and spur economic development in rural India.We Marketing Manager Abhinav Dutta look forward to forthcoming issues of Energy Next. Marketing Manager Aditya Daftuar ll Jaideep Mukherji, CEO, Smart Power India Subscription & Dispatch Anil PatwalKudos to EN of renewable energy in the are something I stand For the latest Renewable Energy news. coming times. with. The growth in the log on to www.energynext.inIt is indeed matter ll Ishan Barbate, Project renewable energy sectorof pleasure for me to Engineer, SECI as predicted by Mr. Birol Energy Next is printed by R Ramprasad and publishedpresent my recent article in his interview with your by R Ramprasad on behalf ofon calibration of solar Way to go! magazine seems possibleradiation sensor in Energy and positive. The industry Focal Point Media Services Pvt LtdNext issue of January. I The concept of biomass is growing and can make #407, Fifth Floor,would like to extend my gasifier through solar India stand out in thesincere thanks to the entire is intriguing. The US renewable energy sector. Pavani Plaza, Khairatabad,team of Magazine, who company which established ll Prateek Singh, Delhi Hyderabad - 500 004, Telangana, India.put their best to bring my this idea of turning biomass CIN No.: U74999AP2010PTC070645article. The article was into source of energy Corrigendum Focal Point Media Services Pvt. Ltd. is a jointdrafted and presented in a through intense heat of sun venture of Gateway Media Pvt. Ltd, and Invisionmanner to bring the topic made me realise that when The contributory article by Communications & Research Pvt. Ltd, and printed atbefore its reader in a very these sources of energy are IEX was mistakenly titledlucid manner. I found that put to their use, they can as Need for Renewable M/s. Kala Jyothi Process Pvt. Ltd.the magazine, having large do wonders! Energy Certificate Market. 1-1-60/5, RTC Cross Roads, Musheerabad,no. of readership, is a good ll Pratham Mukherjee, We regret the error. You Hyderabad - 500 020, and Published at Focal Pointplatform to present my Bangalore can read the full article onviews to masses. I wish the www.energynext.in/green- Media Services Pvt. Ltd.magazine would keep on Growth everywhere day-ahead-market-g-dam/ #407, Fifth Floor Pavani Plaza Khairatabad,bringing the awareness andnewer reforms in the field Fatih Birol’s views on the Hyderabad - 500 004, Telangana, India. future of energy efficiency Tel: +91 40 233 000 61, 233 006 26 +91 40 233 006 65Feedback: Please send your feedback and comments to [email protected] Editor-in-Chief: K S Popli Subscribe: Tel: +91 11 2642 4071/72advisory board e-mail : [email protected] Write to: Focal Point Media Services Pvt. Ltd. #409, Mansarovar Building, 90 Nehru Place, New Delhi-110 019, INDIA Tel: +91 11-26424071/73 Fax : + 91 11-46507580Prof Rangan Banerjee Arun Gupta Dr Praveen Saxena K P Sukumaran S Chandra Sekhar Yogesh Mehra Please note: Views expressed in the articles are those IIT-Mumbai Managing Director Former Advisor Former Advisor Managing Director Managing Director of the Authors and may not be shared by the editor or Him Urja Pvt Ltd MNRE MNRE Wind World (India) Ltd members of the editorial board. Unsolicited material Bhoruka Power Corpn Ltd will not be returned.Advertise Contact Write to Copyright: No material published here should with us Aditya Daftuar Focal Point Media Services Pvt. Ltd. be reproduced in any form without prior written Marketing Manager 409, Manasarover Building permission from Focal Point Media. +91 8860636021 / +91 98-71-048271 90, Nehru Place [email protected] New Delhi - 110 0198 | Energy Next | February 2017
www.renewx.in 7-8 April 2017 �ou�� �n�ia�s �os� �n�uen�ialRenewable Energy Forum is back!RenewX Over 100 China 5000+ Top Interac�ve session withwill have Exhibitors Pavilion Industry Peers policy makers State of Telangana Latest Technology 2 days Pavilion trends conference REGISTER TODAY FOR CONFERENCEShikha Upadhayay | M : +91 99539 43411 | E : [email protected] BOOK YOUR STALLAmitava Sarkar Julian Thomas Iyer NarayananM : +91 93792 29397 M : +91 99404 59444 M : + 91 99673 53437E : [email protected] E : [email protected] E : [email protected] Supporting Associations Media Partner
NATIONALSTFI, IGCC come together for Solar Payback Project Solar experts approach FMSolar Thermal Federation of India December 16 2016,” STFI statement said. (STFI) and Indo-German Chamber of The three-year project will be To increase the subsidies on purchaseCommerce (IGCC) have joined hands to of solar products in the 2017-18implement three-year support project for implemented in India, South Africa, Mexico Union Budget, experts in the field of solaruse of solar thermal energy in industrial and Brazil supported by the German Federal conservation have urged Finance Ministerprocesses. “The STFI and IGCC have Environment Ministry funded by the Arun Jaitley.teamed up for the international ‘Solar International Climate Initiative.Payback’ project, which aims to increase In a letter to the finance minister,the use of solar thermal energy in industrial It was coordinated by the German Solar members of global NGO Solar Cookerprocesses. The kick-off meeting (for Association BSW-Solar and eleven partner International (SCI) Janak Palta McGilliganthe purpose) took place in Mumbai on organisations. The project will be jointly and city-based Deepak Gadhia have implemented in India by Pune-based STFI requested that greater subsidy to be given and IGCC with its head office in Mumbai. on the purchase of solar cookers and solar BSW-Solar MD Jorg Mayer said , “With Solar dryers to beneficiaries, who are mostly Payback, we aim to raise awareness about the women and farmers, which will enable huge market potential of solar process heat for them earn more income through its use. three reasons: to reduce CO2 emissions, to save energy costs for the investors and to sharpen the Padma Shree recipient McGilligan and competitive edge of local industries.” Gadhia, a member of International Solar Energy Society (ISES), observed that theMoS Balyan gives CBIP award to SECI government’s scheme of giving new LPGSolar Energy Corporation of India connection to BPL families is not going to Limited (SECI) has been awarded by Managing Director, SECI. solve energy related problems as LPG fuel is going to be available only for a limitedCentral Board of Irrigation Power for period.(CBIP) Outstanding Contribution in theDevelopment of Clean Renewable Energy. “Energy is largely fuel wood, animalThe Award was presented by Dr Sanjeev dung, or crop residues, all of whichKumar Balyan, Union Minister of State, emit smoke, pollute atmosphere, andWater Resources, River Development & are detrimental to health and safety ofGanga Rejuvenation to Dr. Ashvini Kumar, family members, particularly women,” the letter said.Net Metering System inaugurated at NISEAnkur Gupta, Principal Secretary, New “The use of solar cookers will solve the & Renewable Energy, Government the grid of Dakshin Haryana BijliVitran issue of inadequate household energy faced Nigam (DHBVN) on that day. by rural population across the country,”of Haryana, inaugurated the Net Metering On this occasion, Vinay Pratap Singh, Palta and Gadhia were quoted as saying inSystem for the 770 kWp solar photovoltaic Additional Deputy Commissioner, the letter sent to the FM .systems in National Institute of Solar Gurugram, Naveen Kumar Varma,Energy (NISE). Superintending Engineer, DHBVN and They also stated that government shouldNISE became net energy positive Sudhir Kumar Singh, Director General, give tax rebate to individuals investing incampus on 1st January. An aggregate National Institute of Solar Energy were also rooftop solar under provisions of Incomecapacity of 770 kWp of Solar Photovoltaic present. Solar Photovoltaic Power Plants Tax Act.Systems started feeding electricity into installed in the campus of the Institute and in-house power consumption, developed under a collaborative R&D Project of NISE and SOREVA was also unveiled on this occasion by Ankur Gupta. The Institute will be meeting its electrical energy requirement from the electricity generated by the photovoltaic power plants.10 | Energy Next | February 2017
NEWS1.28 million RECs traded in January this year, says IEXPower exchange IEX said that a total of “With trade of 12.48 lakh RECs, the 12.88 lakh renewable energy certificates market has set an all-time high record(RECs) were traded in January. predominantly on purchase by discoms followed by Open Access Consumers and “A total of 12.88 lakh RECs were traded in Captive Consumers,” the statement said.the REC trading session held on January 25, Since the beginning of this fiscal (April-2017 at IEX,” it said in a statement. January), IEX has traded about 31 lakh RECs. Power distribution companies as well as REC volume trade saw an increase of overopen access and captive consumers are under 412 per cent over 2.51 lakh RECs traded inobligation to buy RECs from renewable the previous month of the same fiscal.energy producers under RPO mandated bycentral/state regulatory commissions. A total of 1,399 participants traded at IEX with 870 participants in non-solar segment RECs are aimed at providing an easier and 529 participants in the solar segment.avenue for various entities, including powerdistribution companies, to meet their green Overall, a total of 3,418 participants areenergy obligations. registered in the REC segment at IEX. Of this, 864 are Eligible Entities (RE Generators) Two power exchanges – Indian Energy 2,535 are Obligated Entities (discoms, OpenExchange (IEX) and Power Exchange India Access Consumers & Captive Generators)Limited (PXIL), approved by the Central and 19 are registered as Voluntary Entities.Electricity Regulatory Commission – holdauction of RECs on the last Wednesday of IEX is country’s premier power tradingevery month. platform.EESL to launch super-efficient air conditioners in IndiaState-run Energy Efficiency Services than 5-star rating,” an EESL statement said. As a result of the workshop, leading Limited (EESL) is keen to transform the The workshop was attended by leading manufacturers like Voltas, Blue Star, Godrej,market for air conditioners through LEDs. Daikin, Whirlpool & Panasonic pledged manufacturers, USAID, World Bank, their support to develop and deploy super- “Keeping this in mind, TERI and EESL Facility owners, Energy Service Companies efficient cooling systems in their complexeshosted a day-long workshop to deliberate and Banks with an aim to leap-frog and and facilities. They also endorsed the Globalon a strategy for super-efficient cooling accelerate the introduction of super-efficient Advanced Cooling Challenge proposed bysystems (ACs of rating ISEER >5.2) higher air conditioners in the Indian market. the Department of Energy, USA. The increasing demand for air conditioners poses a challenge to electricity grids, which are already struggling to satisfy existing demand. Speaking at the meet, EESL Managing Director Saurabh Kumar said, “We all agree that ACs are the primary reason for high peak demand. Super-efficient ACs need to be introduced which can reduce consumer energy bills and energy demand by 30 per cent.” EESL will launch their Super-Efficient AC programme in the coming months, under which inverter ACs of rating ISEER >5.2 (higher than 5-star rating) will be made available to public at low prices. February 2017 | Energy Next | 11
STATEAdoption of innovative energy production sources excites Puducherry CMV Narayanasamy , Chief Minister, Puducherry said the territorial energy so that a green environment could Consulate General of France to implementadministration was keen on conservation be achieved for the people’s advantage. the scheme taking cue from the consulate.”of energy and also adoption of innovative The Smart City project was another areaenergy production sources such as solar He was inaugurating a renovated where French collaboration was very much solar energy powered central hall on the manifest. premises of the French Consulate General. French Consul General in Puducherry The Chief Minister said the French Philippe Janvier Kamiyama said 2016 was a Administration had set a model by significant year for the Consulate. adopting solar energy and using of natural light to enhance saving of energy The Consulate had replaced 49 old air through their current initiatives. He said conditioners by new ones using inverter Puducherry government would also go in technology and renovation of the central hall for green environment and promote solar was also an added feature. All the halogen power generation and using it at various lamps had been replaced by LED lamps centres. and the increase use of natural light would ultimately enhance energy savings. He sought a “blueprint from theTamil Nadu joins UDAY club One lakh solarUnion Minister of State (IC) for and financial turnaround of the DISCOM, lighting systems to be Power, Coal, New & Renewable in New Delhi. The signing ceremony was set up in HaryanaEnergy and Mines, Piyush Goyal presided held in the presence of the P. Thangamani,over the signing of the Memorandum of Minister for Electricity, Prohibition & Excise, To set up one lakh solar lightingUnderstanding (MOU) under the Ujwal Government of Tamil Nadu. systems in Haryana, a newDISCOM Assurance Yojana (UDAY) Tamil Nadu would derive an overall programme known as ‘Manohar Jyoti’Scheme with the Government of Tamil Nadu net benefit of approximately Rs. 11,000 will be implemented.and its Discom TANGEDCO, for operational crores through UDAY, by way of savings in interest cost, reduction in AT&C and The programme is to be launched in a transmission losses, interventions in energy phased manner by the Haryana Renewable efficiency, coal reforms etc. The state also Energy Department in a phased manner. signed 24X7 Power For All document on The Union Ministry of New and Renewable the occasion. With Tamil Nadu joining the Energy has sanctioned financial assistance cause, 92% of country’s Discom debt has of Rs 23.65 crore to set up 21,000 solar been covered under UDAY. lighting systems in its first phase, a By signing the MOU under UDAY, the spokesman of the Department said. State Government is taking over 75% of debt of Rs. 30,420 crores of TANGEDCO. The programme would be implemented in the Swarna Jayanti Year25 MW wind power project in Reasi, J&K of the State this year. The spokesman saidA 25 MW wind power project will be that the Union Ministry had approved set up in Reasi district in Jammu and it belongs to NHPC. The transfer of financial assistance of Rs 45.89 crore so as& Kashmir. State Minister for Science the said land to Science and Technology to make available 3050 solar pumps to theTechnology Sajjad Lone said, “A potential Department by NHPC is under consideration farmers. The farmers were required to payof 25 MW of wind power has been assessed and at an advanced stage”, he added. only ten per cent amount to get the powerat village Bidda, district Reasi, Jammu pumps installed.and Kashmir, out of which 6 MW is being The work will be initiated on the 6 MWharnessed in the first phase as a pilot project,” wind project as soon as the land is transferredin a written reply to the question of Congress and it is expected that the project wouldMLA Aijaz Khan in the Assembly. be executed during the FY 2017-18. The detailed project report for the project has “The land for the project measuring been prepared by the NIWE, a subsidiary ofapproximately 534 kanals has been identified MNRE, and the project is estimated to cost approximately Rs 50 crore.12 | Energy Next | February 2017
NEWSNLC proposes 500 MW solar power plants in TN 6eTn9am%ergiblyiNdpsardofoujerrcwetscineidvesGovernment-owned power company Neyveli Lignite the proposed solar plants. Power In India’s first ever competitive bidding generation will commence within 13 for wind projects, Tamil Nadu hasCorporation Limited (NLC) has months from the date of work order received bids for setting up 1,794 MW ofproposed to install solar power plants given to the selected firms. wind projects or 69 per cent of total bids.of 500 megawatt capacity at the cost of NLC Chairman and Managing2,170 crore in various parts of Tamil Director S K Acharya said “The The Solar Energy Corporation ofNadu. The company has floated tenders company will adopt the new system India (SECI) had rolled out the tender forand received quotations from different of solar development operator mode procuring 1000 MW of wind power underfirms for setting up of the plants with to execute all projects.” As per the competitive bidding. The power generatedcapacity not less than 50MW each. new system, the selected firms have to would be sold to the ‘non-windy’ States.Power generated from the proposed identify and acquire necessary land,solar plants will be fed to Tamil Nadu obtain permission from competent According to research firmpower generation and distribution authorities, design, install and Ambit Capital , the tender has beencorporation (Tangedco). The commission the plants and feed power oversubscribed, with 13 developerscompany has already signed a power to Tangedco. The firms have to operate submitting bids equivalent to 2.6 GWpurchase agreement with Tangedco. and maintain the units for 15 years on against the 1 GW called for. As much as 69It has proposed to generate 83 crore contract under the new system, per cent of the bids are for Tamil Nadu andunits of power per annum through he said. 27 per cent were for Gujarat.Renewables shine at Vibrant Gujarat The overall bids received for setting upVibrant Gujarat has come a long way since projects in Tamil Nadu totalled 1,794 MW. its launch in September 2003. Government Gujarat received interest for setting upof Gujarat, as part of its journey towards projects totalling 700 MW and Karnatakasustainable long-term growth and inclusive received bid for 100 MW. According todevelopment, launched the 8th edition of the the report, firms which bid for setting upGlobal Summit at Mahatma Mandir Exhibition 250 MW of projects each in Tamil Naducum Convention Centre, Gandhinagar, Gujarat. include Inox Wind, Mytrah, Sembcorp andWith the central focus of ‘Sustainable Economic Leap Green. Firms like Gamesa, Adani andand Social Development’, the Summit was held saw the Government signing 25,578 MoUs Hero bid for setting up 150 MW each offrom January 10-13, 2017. and renewable energy was one of the most projects in the State.It brought together heads of states and important segments.governments, ministers, leaders from the Gujarat contributes around 15% to India’scorporate world, international institutions renewable energy bouquet. With its uniqueand academia from around the world to geographical location, the state has a potentialfurther the cause of development and to of 35,000 MW in wind energy and 69,000promote cooperation. The four-day event MW in solar energy.World’s largest solar plant coming up in Madhya PradeshFor developing the world’s largest solar joint venture between Solar Energy Corporation hectares of land in Gurh tehsil of Rewa district power plant in Rewa district of Madhya of India Ltd and Madhya Pradesh Urja Vikas and is to cover five villages of Barseta in thePradesh, a total of twenty leading firms, Nigam Ltd. The project is divided in three district.including Italy’s Enel Green Power SpA, segments of 250 MW each, is spread over 1,500 Of the total 20 developers, four namelySoftBank-promoted SBG Cleantech Ltd, SBG Clean Tech, Enel Green Power RenewCanadian Solar Energy Holding, Singapore 3 Power and Rosepetal, have submitted bidsPte Ltd and Green Infra Wind Power Project for developing the entire project, whileLtd, promoted by Sembcorp Industries Ltd two others have submitted proposals forhave shown their interest. developing 500 MWs. The remaining 14The 750 MW park being developed by have submitted proposals for developingRewa Ultra Mega Solar Limited (RUMSL) is a one unit, i.e. 250 MW. February 2017 | Energy Next | 13
INTERNATIONALIndia gets solar-powered water purification system iSnolMare-lpboowuernreed tramsAlow-cost, solar-powered water purification researchers said. Under a proposal by the Andrews system is being developed by scientists to The team including researchers from government to build large-scalehelp 77 million people in remote parts of India solar farms in northern Victoria,to get access to safe drinking water. Indian Institute of Science Education and Melbourne’s tram network will Research in Pune is adapting its existing become entirely solar-powered. Researchers at the University of Edinburgh technologies to power this second stage in thesay that there is no systematic treatment of decontamination process. The proposal is a part of a plan tosewage in rural India. reduce Victoria’s net carbon emissions The system uses sunlight to generate to zero by 2050. Tenders to build and Although the government is focusing high-energy particles inside solar-powered operate 75MW of new solar farms willon purifying contaminated water in rivers materials, which activate oxygen in the water be released in early 2017 and the firstand streams, the situation could be greatly to incinerate harmful pollutants and bacteria. solar power plant is expected to beimproved by tackling the problem at source, completed by the end of 2018. “We are aiming to provide people in rural India with a simple off-grid water The environment and energy decontamination system. This could be minister, Lily D’Ambrosio said that achieved by simply fitting our modified 35MW of the generating power solar-activated materials to containers of of the new solar plants would be contaminated water positioned in direct dedicated to running Melbourne’s sunlight,” said Aruna Ivaturi from the tram network, which would reduce University of Edinburgh. the city’s greenhouse gas emissions by 80,000 tonnes a year. The team hopes to incorporate technologies developed during the five-month pilot project “We will use our purchasing power into larger-scale initiatives that deal with as a large energy consumer to boost water contamination. investment in renewables and create new jobs for Victorians,” D’AmbrosioScotland to garner renewables for energy demand said. “We’re positioning Victoria as a leader in climate change, byScotland has set itself goals to fulfil “The decisions we make about Scotland’s reducing emissions and adapting to half the energy needed for its heat, energy future are among the most the impacts.”transport and electricity needs by 2030 important choices we face as a society,” Paulthrough renewables. Wheelhouse, Scotland’s minister for business, The project would deliver $150m innovation and energy, said in a statement. in capital expenditure to regional Scottish Energy Strategy, the Victoria and create 300 jobs.government’s draft describes a vision for The new strategy was welcomed by WWF2050 where Scotland is home to a “modern, Scotland.integrated energy system that deliversreliable, low carbon energy at affordable “A transformation in how we heat ourprices to consumers in all parts of Scotland.” homes and offices, how we travel to work and school and how we power our industries The draft Energy Strategy outlines a will generate many social and economicstrategic framework to enable Scotland’s benefits,” Gina Hanrahan, WWF Scotland’stransition to a low carbon future. climate and energy policy officer, said.14 | Energy Next | February 2017
NEWSCEM names Christian Zinglersen as new head British village gets solarChristian Zinglersen, the Deputy battery boost Permanent Secretary at the Danish Secretariat to support an accelerated globalMinistry of Energy, Utilities and Climate, transition to modern and clean energy In northern England, 40 houses inhas been named as the first Head of sources. He takes his position, based in the the village of Oxspring, 19 km northSecretariat for the new Clean Energy IEA’s headquarters in Paris, on February 1. of Sheffield, will be linked to a ‘virtualMinisterial (CEM) Secretariat, established at power plant’ using home batteries to storethe International Energy Agency (IEA). “By establishing an international electricity generated from solar panels. Secretariat at the IEA, we have a tremendous Mr Zinglersen will lead the CEM opportunity to increase the forum’s impact, Under this 250,000 pound ($307,000) particularly through a stronger partnership pilot project, solar power can only be that draws on the analytical expertise of the used during the day without batteries. IEA, and establish the CEM as a key forum to help countries implement ambitious clean Financed by energy supplier Northern energy policies,” said Mr Zinglersen. “I’m Powergrid, the project is the first to excited at the opportunity to lead this effort.” analyse how linking batteries can allow more households to install solar panels Dr Fatih Birol said, “I am delighted to without expensive upgrades to the grid. welcome the CEM Secretariat at the IEA, which will allow for close cooperation on “Batteries will play a key role in the smart advancing clean energy technologies that are energy system of the future, keeping costs so critical to both the IEA, developed and down for customers whilst allowing the power emerging economies.” network to support greater concentrations of solar power,” said Andrew Spencer, a systemsWind power overtakes coal for first time in UK expert with Northern Powergrid.According to an analyst’s estimates, the broadest level, the UK grid is changing Solar panels on average can cut wind farms across the UK as centralised power stations are joined electricity bills by up to 30 percent andgenerated more electricity in 2016, than by thousands of smaller sites, particularly batteries can add extra savings of up tocoal power plants for the first time. renewables, as part of efforts to decarbonise 20 percent by allowing households to use electricity supplies,” wrote Simon Evans, stored solar energy at night, Northern Three major coal power stations policy editor at Carbon Brief. Powergrid said in a statement.closed last year, causing coal electricitygeneration to plummet to 9.2%, down Ministers have pledged to phase out IEA urges Poland tofrom 22.6% in 2015. Wind power coal power by 2025 to meet carbon targets. strengthen energy sectorprovided 11.5% of generation in 2016. The huge decline in coal power last In the latest review of the Poland’s energy Climate analysts, Carbon Brief year saw a series of records, including policies, International Energy Agency saiddescribed Coal’s collapse as a ‘milestone’ days with no coal power at all, and solar Poland’s new energy strategy should put theand saw coal-fuelled electricity output at power generating more than coal across country on a pathway towards a cleaner energyits lowest in 80 years. six months. The slack was largely taken up system while strengthening energy security. by gas-fired power stations, which was up “The past 12 months have seen a year 45% year on year, Carbon Brief found. Placing a strong emphasis on reducingof firsts for the UK’s electricity system. At greenhouse gas (GHG) emissions and air pollution, increasing energy efficiency and decarbonising the transport system, the forthcoming energy strategy is likely to prioritise long-term energy security. The new energy strategy will require significant investments to reduce the share of carbon-intensive power plants and increase the share of low-carbon energy, including nuclear energy and renewables, said Dr Fatih Birol, the IEA’s Executive Director. The review notes that according to the government coal will remain the cornerstone of the energy system of Poland for the long term. February 2017 | Energy Next | 15
BUDGET 2017-18‘FM presents budget for all’Giving his thumbs up to Finance Minister, Arun Jaitley for his vision andaction, Minister of Sate (IC) for Power, Coal Renewable Energy and Mines,Piyush Goyal said, he felt happy to see affirmation of the target for SolarPower addition of 20,000 MW in the next fiscal.U nion Minister of State for Power, Coal, New & mission by correcting inverted duty additional 20,000 MW capacity during Renewable Energy and structure in many areas. The budget has next year. Mines, Piyush Goyal has also provided impetus to transformative changes happening in the Ministry of The budget has provided renewedgiven a thumbs up to this year’s budget Power, Coal, New & Renewable Energy thrust on renewables, with l Removal/ reduction of customs/announced by Finance minister, Arun and Mines. Micro, Small & Medium excise duty on Solar tempered glass.Jaitley at the beginning of this month. Enterprises are the back bone of the l Reduction of Customs duties onWhile addressing the media, the minister sector and have been made competitive various raw materials would further bringsaid that the allocations have been by incentivising them with reduction of down the cost of clean energy.increased for social sectors across the Corporate Tax to 25% up to turnover of l Railways to contribute to solarboard including affordable housing, Rs. 50 crores. energy by powering 7,000 stationsinfrastructure, and rural development. In the New & Renewable Energy through solar power.The minister added that the Budget Sector, the minister said that the Budget l Basic custom duty and excise duty cuts2017-18 promotes the ‘Make in India’ has affirmed target for Solar Power of in the manufacturing of LED lights.
COVER BUDGET 2017-18 EXCLUSIVEQuotations & Reactions
BUDGET 2017-18Sumant Sinha, Founder Chairman & CEO, ReNew Power Ventures Pvt LtdThe budget 2017 looks decent this time. From the industry’s stand point, therewas no negative tax implication. On Minimum Alternate Tax (MAT), there is somemarginal benefit that the Finance Minister Arun Jaitley has given. He talked about20GW of solar power capacity addition in the second phase, but that of course isa programme that we already know is active at this point of time, and beyond thatthere is so much that has happened for the power sector outside of the budgetwhich I think is fine.Rahul Munjal, Managing Director, Hero Future Energies Pvt LtdThis time the budget focuses on the solar in the energy sector that isimplementing Phase II of solar power addition by 2017-18, which is a sign ofgood times ahead for the renewables sector. Second part, we already knew thatrailways were implementing lot of solar but if you see the magnitude today, it isfantastic. The powering of 7,000 railway stations with solar power in the next two,three years will give an impetus to the renewables.Sunil Jain, CEO & ED Hero Future Energies Pvt LtdWhat Finance Minister Arun Jaitley has done is positive for the solar sector.He has announced 20 GW solar power installation in 2017-18. Now, wehave to see whether he is giving additional VGF for 5,000 MW against theplanned 15,000 MW. Secondly, he has continued with 5 percent withholdingtax which will help us in funding the projects with the foreign money at thelower cost of capital.Ratul Puri, Chairman, Hindustan Powerprojects Pvt LtdI think the 20 GW solar power programme is positive which shows thatthe government continued to focus on the solar. With the significantsolar build up that has taken place and with the challenges that gridsface is absorbing the solar. I think, having the 20 GW solar powercapacity additions in the second phase is a positive sign for solar andrenewables overall.Rakesh Bharti Mittal, Vice-Chairman, Bharti EnterprisesTo compliment the Finance Minister, Arun Jaitley, he has put out 10 focusarea, primarily on rural sector infrastructure, poverty alleviation and boostnew energy. The 20,000 megawatt solar power addition in 2017-18 is a majorreform that the energy sector is going to witness.Besides, the ten lakh crore credit for the farming sector is a very good steptaken. In addition to this, 4,500 crore rural skilling programme and 600training centre under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) in theurban areas will help in generating more employability and employment.Rajiv Memani, Chairman, India Region and Emerging Markets Committee,Ernst & Young LLPI think it is a very positive budget. Very consistent with what the governmentthinking is. The government has put on lot of focus on boosting the energysector, ease of doing business, infrastructure, cleaning up the economy,improving the tax GDP ratio, encouraging start-up companies, and mostimportantly trying to address the needs of people and companies who are inthe lower tax bracket first.
COVER Ashish Khanna, ED & CEO, Tata Power Solar “The budget does focus on a few areas for the solar sector and demonstrates the Government’s commitment to being a frontrunner in renewables. The proposed solarization of railway stations is a positive step and will boost the demand for infrastructure going green. The announcement of 20 GW for the second phase of solar mission and focus on pushing for the solar projects is very heartening. However, we need more clarity in the coming days on its roll out. We also anticipate some indirect impact for solar with the Government’s ambitionof 100% electrification of villages, and we hope this to have a solar component. A set timeline for rollingout GST is a welcome move, however requires further clarity on its implementation and how much it willimpact the solar sector.” Tulsi Tanti, CMD, Suzlon Group This budget is expected to lead an inclusive growth with a clear focus to lift the rural economy and create the right infrastructure. With a special mention about the drive towards 100% electrification, the renewable industry was hopeful that there would be an announcement to support the achievement of the Government’s RE target 175 GW, and long-term policy framework to achieve our INDCs and commitment made at COP-21 to reduce carbon emission to 30-35% by 2030. On manufacturing front, It is indeed encouraging that India is now ranked sixth globally. Thebudget promises a very robust forex reserve, with resilient domestic market, further capitalisation ofPSU banks, and launch of trade infrastructure for export scheme (TIES), can truly position the ‘Make inIndia’ apart from establishing the country as a global hub for engineering goods. Sarvesh Kumar, Chairman, Indian Wind Turbine Manufacturers Association (IWTMA) “Indian Wind Turbine Manufacturers Association (IWTMA)would like to welcome the budget presented by the honorable Finance Minister Mr. Arun Jaitely. As a professional stakeholder body, we are not too happy with the budget 2017 as there is nothing concrete on the renewable energy sector, considering it is one of the growing sectors in the country. The Government has completely overlooked the wind energy division. The sector is in a developing phase and needs attentionfrom the government as we are facing various issues. Service tax could have been rationalized and atleast some state level reforms and policies should have been introduced that could have helped us inour road plan for the goal of achieving 60GW by2022.” Tilak Raj Seth, Head Mobility, Siemens “The industry was keen to see the representation the rail sector would get in this combined Budget, the first in independent India. The Finance Minister did a good job focusing on key and strategic measures for the railway sector. The increased Budget allocation to railways, focus on safety through the ‘Rail Sanraksha Kosh’, an enhancement of throughput are very welcome measures. Additional resources will come to the transport sector basis the announced measures of modifying the metro policy, PPP operation of tier two cities and through the ‘Multi ModelTransport Approach’.”20 | Energy Next | February 2017
BUDGET 2017-18 Dinesh Aggarwal, Joint Managing Director, Anchor Electricals Pvt.Ltd “We welcome the government’s decision and the focus it has shown towards the renewable energy sector and the power industry. Its proposal to supply 7000 railway stations with solar power and 100% electrification of the entire nation will help meet the necessary energy requirements. Not only will it boost the energy consumption but, also assist the government in achieving its total renewable capacity of 175 GW by the end of 2022. Further, a course correction in CVD and BCD structure on renewable energyand LED products & components will give the necessary impetus to local manufacturers, aligned togovernment’s ‘Make in India’ vision. Pratik Agarwal, CEO, Sterlite Power The Union Budget 2017-18 is in sync with government’s progressive agenda to energise Indian economy. We appreciate government’s enthusiasm to promote clean energy and reliable energy access to every citizen of our nation by adding 20 GW of solar power generation capacity and allocating higher resources for rural electrification. This will require robust and timely power transmission networks that can deal with unpredictable renewable energy. With rapidly expanding renewable energy capacity, execution oftransmission networks is the need of the hour. Sabysachi Majumdar, Group Head, ICRA Ltd. The Union Budget has favorable proposals for the power sector which include increased allocation towards rural electrification scheme under the Deendayal Upadhyaya Gram Jyoti Yojana (DUGJY) & measures to augment solar project capacity addition. The progress towards 100% rural electrification target by May 2018 as announced in budget for previous FY is on track and this coupled with higher funding support under DUGJY is likely to gradually improve the energy demand and hence, the PLF levels for power generation entities tosome extent. This apart demand is also likely to be supported by increased budgetary allocationtowards infrastructure segment (particularly roads, housing & railways) which in turn will leadto increase in energy demand from industrial sector. While these measures are likely to boostaggregate demand, an increasing focus on solar energy is likely to affect the energy demandfor thermal power generation entities to some extent. The Budget also highlighted that anamendment bill is proposed in Arbitration & Conciliation Act which will enable speedy resolutionof disputes for PPP contracts. This is a favourable development for power generation projects,which have been affected by unviable tariffs quoted in past bids. Sanjeev Aggarwal, MD and Chief Executive, Amplus Energy Railways plan to develop 1000 MW solar on 7000 stations will help in developing distributed solar ecosystem across India and also 100% electrification of rural areas should also integrate solar distributed generation as part of the scheme for better reliability. We welcome the move by the govt. to propose second phase of solar power development for additional 20,000 MW of capacity, more details will emerge in the next few days. February 2017 | Energy Next | 21
BUDGET 2017-18 | ANALYSIS Renewable EnergyPlans, Policy and BudgetConsidering ambitious RE capacity addition targets and recent regulatorydevelopment, time is now ripe to introduce a national level market, exclusivefor renewable energy transPactions, explains Kirit S Parikh.rime minister Modi has set an ambitious target of 175 GW ofset to be 12 GW. It is expected that by the renewable power by 2022, of end of March 2017, this will be achieved. which 100 GW is to be solar, Solar power targets for targets for 2017-60 GW to be Wind and rest from small 18 and 2018-19 are 15 GW and 16 GW respectively. At this rate the 100GW ofhydro and biomass. The installed capacity solar target by 2022 seems within reach.as of October 31, 2016 were 46.33 GW of In the Budget, the announcementsrenewables of which 28.28 GW was wind, concerning renewables include setting6.73 GW of solar, 4.32 GW of small hydro, up solar parks for adding 20 GW in4.88 GW of bio-power and 0.11 GW od the second phase, and a slew of dutywaste to power. reductions on components for fuelThe government has set ambitious cell-based power generating andtargets to achieve the 175 GW goal. biogas systems, as well as wind energyDuring 2017-17 solar power addition is equipment. February 2017 | Energy Next | 23
BUDGET 2017-18 | ANALYSIS The Budget also announced solar power renewable generation remains un sold. renewable power. With this improvement thesupply at about 7,000 railway stations in The reasons why FIT does not work recommendations of the expert group need tothe medium term and that “Work will be be implemented.taken up for 2,000 railway stations as part are the same reasons why despite havingof the 1000 MW solar mission.” surplus capacity we have power shortages The reason why the pooling of in the country. The DISCOMs have no renewable power with unallocated coal Thus the government is seriously obligation to serve all demand, or at least power does not work is the same aspursuing its renewable targets. The it is not enforced. Also many of them still why FIT does not work. Pooling makesemphasis is mainly on supply side. have large AT&C losses so that their cost coal power little more expensive and of supply becomes larger. Thus they would DISCOMs do not buy this. The question however, is can this much rather impose a power cut than tomomentum be sustained? While renewable buy power at their marginal cost. Renewable The task force set up by NITI AAYOG oncapacity is created, absorption of this power power thus does not find buyers. the 175 GW target has also suggested thatis not keeping pace with it. Renewable power long tenure low interest finance should beis being traded on the two power exchange The RPO does not work because the made in available for renewable power. Thisplatforms of IEX (Indian Exchange) and PXIL obligations are imposed by SERCs who set a was also a recommendation that was made(Power Exchange of India Limited). In 2016 somewhat lower limit so that their state can be 2005 by the Expert Committee that I chairedthe units offered for sale were far more than a net supplier. If all SERCs do this there will on ‘Integrated Energy Policy’ (also availablethe units bought and the price was very low. be surplus renewable power with no buyers. on Planning Commission website). This isOn IEX the average monthly solar electricity In the report in 2014 of the expert group that I particularly critical for solar power. With aunits offered for sale were 2.3 billion but only chaired on ‘Low Carbon Strategy for Inclusive capital cost of Rs. 6 crores per MW, a debt.033 billion were sold amounting to only 1.42 Growth’ (available on Planning Commission equity ratio of 4:1 and a return on equity of 15% of the units offered. The picture on PXIL website) we had recommended measures %, if the rate of interest on debt comes downwas similar and of the 1.22 billion offered only required to make RPO effective. These include from 12 % to 4 %, the price of electricity will1.48 % were sold. The picture for non-solar a uniform RPO across all states, a guaranteed come down by Rs. 2.45 per kWhr. Thus low-energy units offered was only marginally minimum price to producers of renewable interest long-tenure finance can make a hugebetter where on PXIL the average monthly power and a stiff penalty on DISCOMs for difference in the development of renewableunits offered in 2016 were 5.57 billion of the shortfall in their RPO requirement. While power. May be India can mobilize such financewhich only 2.91 % were sold. the CERC has recommended a uniform RPO, from international funds and sources. this has yet to be implemented by the SERCs. Thus lack of demand may create Also the government has waived transmission While the budget has reaffirmed itsuncertainty that may deter investment. Thus charge for renewable power so that distant commitment to renewable power, nospecial policies are needed to stimulate states would have no disincentive to buy specific policy measures were announced.renewable energy. Currently three types of Perhaps these need not have beenpolicies are used; feed in tariff (FIT)under part of the budget. One hopes that thewhich Distribution companies (DISCOMs) government will follow up with neededbuy renewable power at the agreed FIT measures soon.and get the difference between their costof purchase from other sources and get The author is former member, Planningcompensated by the government; renewable Commission and Chairman, Integrated Researchportfolio obligation (RPO) requires each and Action for Development.DISCOM to have percentage of powerfrom renewable sources as prescribed by (Views expressed by the author are personal)the state electricity regulatory commission(SERC); The third policy introduced by theMODI government is to require coal powerproducers to have a percentage of theirunallocated coal power from renewables andcharge the average tariff when they sell theirpower. Despite these measures a large part ofThe RPO does not work because theobligations are imposed by SERCswho set a somewhat lower limit sothat their state can be a net supplier24 | Energy Next | February 2017
BUDGET 2017-18 | FOCUSRough seas ahead forthe renewable sectorIndia’s ambitious target of 175 GW by 2022 needs an aggressive strategyfor raising affordable finance, supporting domestic industry, skillingadequate manpower etc. As the Budget 2017-18 provides little clarity onsuch strategies, achieving the 175 GW target will be an uphill task, writeAnjali Viswamohanan and Neeraj Kuldeep.WAnjali Viswamohanan Neeraj Kuldeep the forefront through various steps such as ith the growing number of the amendment of the National Tariff Policy uncertainties plaguing the Tax, curtailment issues, land acquisition issues, in January 2016, with a focus on renewable renewable energy sector in inadequate access to finance, etc., expectations purchase obligations and renewable generation the recent past, such as the from the 2017-18 Budget were high. Over obligations to spur growth in the renewableimpact of the proposed Goods and Services the past two years, the current government energy sector to achieve the 175 GW renewable has brought the renewable energy sector to energy capacity target. India was also instrumental in promoting the global growth of renewable energy through the launch of the International Solar Alliance, which serves as a platform for collaboration for solar resource- rich countries to scale up the development and deployment of solar energy. Though the 2017-18 budget signalled a continued focus on expanding the renewable energy sector in India, big ideas and bold measures needed for promotion of the sector were lacking. The budget announcement attempted to provide support for domestic February 2017 | Energy Next | 25
BUDGET 2017-18 | FOCUSrenewable energy manufacturing and for borrowings or in bonds and Government GST bucketing, would provide the sector animproving access to finance, both domestic securities to 2020 from 2017. Also, this impetus. However, the 2017-18 budget hasand international. benefit has been provided to masala bonds, failed to provide any clarifications in this which are rupee denominated bonds that regard, thus missing an opportunity to put In 2017, several concerns still plague the were introduced by the Reserve Bank of India these speculations to rest swiftly and fortifyrenewable energy sector: curtailment of in September 2015. Masala bonds are an the growth trajectory for the sector.renewable power (particularly wind power), effective means of raising international capitalconstrained inter-regional transmission for renewable energy projects at preferential The budget also aims to promote skillcapacities, delay in payment to generators, rates without developers bearing any foreign development by setting up various centresregulatory uncertainties, and delays in exchange risk. and programmes across the country suchsigning or non-signing of Power Purchase as India International Skill Centres and theAgreements (PPAs). The budget has done The benefits provided to the manufacturing Skill acquisition and Knowledge Awarenesslittle to allay these fears and with a capacity sector in the budget though encouraging, are for Livelihood Promotion programmeaddition target of 10 GW for the year 2017- inadequate. The only benefit worth highlighting (SANKALP). The specifics of the nature18 for utility scale solar power alone, these would be the reduction of basic customs duty to and sectoral focus of the skilling have notchallenges are only expected to intensify. nil for tempered glass used in the manufacture been provided. However, with an estimated of solar cells, panels and modules and the generation of about 4 jobs per MW ofll HIGHLIGHTS FOR THE RE reduction of countervailing duty from 12.5% operational manufacturing capacity inSECTOR FROM THE 2017-18 to 6% for parts used in the manufacture of the solar manufacturing sector (as per anBUDGET tempered glass which is used in solar PV cells, analysis done by the Council on Energy,The 2017-18 budget allocation to the modules, etc. Manufacturing companies, with Environment and Water and the NaturalMinistry of New and Renewable Energy of annual turnover of up to 50 crore could also Resources Defence Council), the government₹5473 crore has not seen a significant spike benefit from the incentive of reduction of may consider implementing targeted skillfrom the allocation in 2016-17. The Budget income tax payable to 25%. However, in the development programmes to benefit thehas also failed to mention any allocation to renewables sector, a manufacturing unit with an renewable energy sector.the National Clean Energy Fund (NCEF). annual turnover of upto ₹50 crores, translates toOn the capacity addition front, the budget an annual panel manufacturing capacity of only Interestingly, the Union Government hashas announced support for the second phase 20 MW, which is unlikely to create the required made an endeavor in the 2017-18 budgetof solar park development for an additional impact in the sector. to stimulate the development of new clean20,000 MW capacity and the powering of energy technology, particularly fuel cell7000 railway stations with solar power. Both On a related note, a number of project based power generating system, systemsthese initiatives were already in the offing. developers have abstained from bidding for operating on bio-gas, bio-methane and renewable energy projects in the last quarter by-product hydrogen by way of indirect tax Finance, one of the greatest impediments owing to the lack of clarity with regard to the incentives. However, the miniscule nature ofto the advancement of the renewable energy implementation of the GST regime and its the incentive, with no additional allocationsector, has received some attention in the impact on the solar tariffs. CEEW’s analysis for R&D, technology development and2017-18 budget. Foreign investment in estimates that solar tariffs could increase up deployment or financing support, will bethe sector may see a spurt of growth due to 10 percent if the existing tax exemptions inadequate to make these solutions feasible asto the extension of the applicability of the are disregarded while determining the an alternative to phase out generator sets inconcessional withholding tax rate of 5% applicable GST slab for solar components India, a key focus area of the central and statebeing charged on interest earned by foreign and associated services. However, if current pollution control boards in the recent past.entities in external exemptions were considered while decidingcommercial the applicable GST rates, the increase in India’s ambitious target of 175GW of renewable energy by 2022 needs an tariffs would be insignificant. These equally aggressive strategy for raising additional tax exemptions and affordable finance, supporting domestic reductions, if continued in the industry, skilling adequate manpower, investing in energy storage and other horizon technologies, and creating global partnerships. With 2017-18 Budget providing little clarity for the sector, achieving the 175 GW target will be an uphill task. (The writers are researchers at the Council on Energy, Environment and Water – an independent not-for-profit policy research organisation based in New Delhi. (Views expressed by the authors are personal)26 | Energy Next | February 2017
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BUDGET 2017-18ExpPReEc-BUtDaGtEiTons ‘SinpcleeatshuereBukndogewtifnogr w20h1a7t-t1h8e’siescotuotr ienxpoepcetne,ditfrwoomulidt. be 28 | Energy Next | February 2017
INDUSTRY VOICESWith a lot of demands pouring in for clean, sustainable andaffordable power, stakeholders evinced interest in seeking governmental support. As we proceeded planning this edition, we received manyarticulations in this regard and felt prudent to carry them... February 2017 | Energy Next | 29
BUDGET 2017-18Tulsi TantiChairman & MD, Suzlon Group‘We see thedemand for clean,sustainable andaffordable power’The renewable energy landscape in India and make it successful, AD should be 6% slab (revenue neutral) or best to be at ‘zero’ is undergoing significant allowed to be continued. rate, which would reduce cost of generation , transformation. We see the demand • Further, with presence of MAT, and removal making renewable energy most acceptable to for clean, sustainable and affordable of Sec 80 IA, would make the energy cost higher DISCOMs and end consumerspower continuing especially in emerging than today, so Sec 80 IA needs to be retained. 5. Concessional finance/interest subventionmarkets. India’s commitment at COP21, 2. Incentive mechanism for State DISCOMs to for manufacturing sector that invests in windto reduce carbon emission and increase procure wind energy energy for captive utilisationrenewables to 40% of the energy mix by 2030 • There is a requirement to incentivise state • An interest subvention of 5% should be givenwill continue to give impetus to the sector. DISCOMs to meet the RPO compliances, to such manufacturing units that invest into today, there is no such mechanism. wind energy for captive utilisation. The expectations from the Union budget • MNRE, recently floated a paper to extend • This is to give impetus to ‘Make in2017 are: Performance Based Incentive (PBI) to the tune India’ and make manufacturing sectors in1. Continuation of Accelerated Depreciation of 62 paise/kWh to DISCOMs, which is a very India profitable, which are currently under& Section 80 IA for Wind Operated Electricity good move, should be implemented. tremendous pressure for margins due to highGenerators (WOEGs) 3. Generation Based Incentive (GBI) should be interest rate and energy costs.• There is a fair amount of Indian capital that continued to maintain the growth momentum • Investment in wind energy hedges theirhas and is investing into wind energy projects, and to achieve the target of 60 GW by 2022 energy costs on a long term basis, making thembecause of presence of Accelerated Depreciation. 4. “Zero” rate GST for Wind Operated more competitive at the global level. This willMost of these investments come from the Electricity Generators (WOEGs) lead to increased exports and manufacturing.manufacturing sector in India, which utilises • Renewable energy products currently are 6. To make India a global manufacturing hubrenewable energy for their captive consumption, excise exempt, and electricity duty is kept • It is important to make raw material exemptso that they hedge their energy costs. out of GST, because of which the entire GST from customs, and have higher tariff for import• In a typical process industry i.e. textile, energy chain breaks while producing electricity, if of finish goods, in order to make India a globalconsists more than 30% of their operating costs, not corrected would lead to increase in cost manufacturing hub for Renewable energy.if such industry invests into renewable energy, of generation anywhere between 30 – 50 • Exemption of customs would create a rightthe energy costs dips to less than Rs 1 per kWh paise/kWh environment for manufacturers to set up theirafter 6-7 years, making them competitive and • Since, it is important to contain or reduce the facilities in India and help achieve the country’sprofit making. cost of generation, best would be to peg GST at ambitious target of 175 GW.• In order to continue the impetus for Make 7. Export subsidy (logistics support) for wind energy sector • India has tremendous potential for exporting Wind Turbines to overseas geographies. Till date India has exported more than 7,000 MW of wind energy projects across the world. • We need to have time-bound logistics subsidy (starting from 10% of the sale value to “zero” over a 5 year period), then it would be possible to achieve an export of 20 GW by 2022, which will not only earn forex for the country, but also further enhance the ‘Make in India’ vision.30 | Energy Next | February 2017
INDUSTRY VOICESAshish KhannaED & CEO, Tata Power Solar‘We expect astronger focus onsolar manufacturing’2017 should continue to be a strong year for solar and in line with the Indian manufacturing industry. While rooftop solar systems attract subsidies, MNRE solar mission. To achieve the Secondly, we hope for increased focus to the disbursement process is not streamlined ambitious 100 GW target, we hope and standardized across the country,the upcoming budget will provide impetus to promote solar rooftops, which has not been thus, reducing the impact of the same. Wethe solar industry in four areas of focus. leveraged to its full potential till now. The should analyze alternative ways for subsidy budget should make solar adoption easier, disbursement through approaches like tax- We expect a stronger focus on solar economical and viable keeping in mind the based incentivisation.manufacturing, with clear long-term outlook. 100% upfront cost. With commercial andWe hope for lower, better restructured taxes industrial customers being a key proponent Lastly, we hope that the Governmentand better access to finance and capital at a of the growing solar market, we expect that use solar’s scalability to reduce the currentcompetitive rate. We also look forward to the Government reconsider its decision and energy divide by focusing on proliferation ofstreamlining of import duties on panels and reverts to the earlier incentivisation of 80% distributed, off-grid solar power generation.system components. These measures will not accelerated depreciation, versus the revised They should give strong incentive foronly provide a more level playing field for 40%. Exemption of rooftop systems from GST adopting microgrids, especially in areas withdomestic players against subsidized imported will help encourage adoption, especially at a limited grid connectivity.panels, but also help in investment in R&D consumer and retail level.technology upgrades and safeguard the Streamlining and improvement of subsidy disbursal should be another key focus area. Sanjeev Aggarwal MD & Chief Executive, Amplus Solar ‘Subsidy will make the sector much more competitive’ subsidy will make the sector much more on solar sector, ghnso expecting clarity on competitive and transparent. Recently, we tax benefits under 80IA because removal of successfully commissioned a solar power Section 80IA benefits will further increase project at HAL Airport in Bangalore the solar costs. where for the first time the VGF (ViabilityIndia’s energy sector has witnessed Gap funding) was negative. The removal significant growth in the recent years of subsidy will send the right signals to fuelled by major policy decisions taken the market leading to faster adoption of by the govt. Solar Energy, with the technology. The accelerated depreciationhelp of government policies and the falling that the sector currently enjoys is a sort ofglobal prices, is now at an inflection point subsidy provided, so we also have to see ifwhere it can compete on its own against this continues post budget or not.other forms of energy. The implementation of Goods and Government’s intention to phase out the Services Tax (GST) in 2017, if applicable February 2017 | Energy Next | 31
BUDGET 2017-18Gyanesh ChaudharyCEO & MD, Vikram Solar‘We recommend theGovernment to levy100% exempt or zerorated projects’S ubsidy: Currently, the remove service tax for the installation & applicable for GST. Government provides a subsidy commissioning of renewable energy projects. Accelerated Depreciation: We would of 30% on rooftop installations. Income Tax: The current 10 years tax recommend that the 80% accelerated In order to make rooftop holiday should be extended for another 10 depreciation benefit should be reinstatedprojects more attractive, this subsidy years. This is crucial keeping in mind that again as it used to be, before.should be increased to 50%. This will the setting up of any new industrial project GST: We would like to recommend toincrease uptake of rooftop solar capacity inevitably takes a huge amount of time. the Government that all the benefits andand hence, help the Government achieve Excise Duty: We request the exemptions currently applicable to SEZits overall target of 100 GW solar Government to completely lift excise units, should continue to exist.installations by 2022. Also, in case the duties with regards to machinery,Government find it unfeasible to increase equipment, spare parts etc deployed in Energy or electricity produced isthe subsidy, it may be provisioned a regular factory set up, meant for solar currently outside the domain of GST andthat investment in rooftop solar by an energy production projects. Additionally, thus, input GST would inevitable resultindividual is allowed to get a deduction full exemption from excise for raw in higher cost of power. We would likeof INR 2,00,000 under section 80C of the materials required for manufacturing to recommend to the Government toIncome Tax Act. Solar Modules such as, tempered glass, levy 100% exempt or zero rated projectsService Tax: Keeping in mind the nature back sheet, EVA Sheet, solar cells, flat to all input services that are provided toof the industry and to bestow more power copper wire which are needed for making the power sector. All the inputs used forgeneration capacity under the Renewable PV Ribbons etc. The same should be installation & operations of power plantsEnergy Sector, the Government should should have zero GST Rates. The Government should also look at exempting import duties on components and equipment that are required for establishing solar power plants, with the roll out of GST. To promote the indigenous solar industry, the Government should introduce more and more incentive schemes and overall reforms. The “Technology Up-gradation Fund”, like in the textiles industry should be introduced in the solar sector as well. The Government should also provide interest subsidies for the solar industry. Favourable policy reforms will not only catapult the Government’s Make in India program but also will be a step towards realizing the Government’s target of electrifying the whole of India by 2020.”34 | Energy Next | February 2017
Sunil KotakED & CEO, Kotak Urja‘Continuation of TaxHoliday for Solar PowerPlants will help acceleratepenetration’C ontinuation of Tax Holiday for Solar Power Plants: Section 80 an impact as possible, Renewables (especially incentives which has contributed to the IA of the Income tax Act 1961 solar and wind) should be kept in the lowest tax renewable energy sector being recognized provides 10-year tax holidays to bracket of GST. as a very attractive and lucrative sector inthe Solar projects. Domestic Solar firms have India. However, it would now be reducedbeen availing tax holidays under this section Government is yet to finalize the solar from 80 per cent to 40 per cent starting Aprilin 2016-17. This was supposed to end in Mar manufacturing policy. The said policy will 2017. The government should take suitable2017. Continuation of this policy will help accelerate growth of the sector by reducing cost measures to restrict or eliminate the rise ofaccelerate penetration even further. of solar panels, other equipment, and overall cost for developers. This is also critical to solar tariff, and by developing a solar ecosystem ensure envisaged solar capacity addition With the implementation of Goods and in the country. This policy is also critical targets are met.Services Tax (GST), the tax benefits availed from the perspective of achieving 100 GW ofby the renewable energy sector are bound to installed solar energy target. There is a need to encourage storagedisappear. This will raise cost of production solutions, off-grid solutions, mini gridof renewable based energy. To have as less of At present, Accelerated Depreciation (AD) financing through some guarantee funds and available to the Solar sector stands at 80 interest subventions. per cent. AD is one of the crucial financial Andrew Hines Business Development Head, South India, CleanMax Solar ‘Full AD could be retained for rooftop solar projects’Rooftop solar has many benefits greater benefits to the transmission grid. They can simply call for a tender of the for individual consumers and for If full accelerated depreciation could be desired capacity, and the industry will bid the country as a whole. Unlike competitive to build the projects. Even utility-scale plants, rooftop solar retained at least for rooftop solar projects, harnessing government building rooftops canhas negligible transmission losses, and does this would keep the sector on its current be driven through the same tender route.not require additional infrastructure to be growth track and make the country’s goalsbuilt. Utility-scale wind and solar projects are achievable. However, harnessing commercial andindirectly subsidized by concessional rates industrial rooftops requires a more indirectfor use of grid infrastructure compared to A second impact anticipated is the removal approach, through tax incentives and otherconventional power. But rooftop solar does of the income tax holiday (Section 80-IA) for supports. To simultaneously remove thesenot receive any such support, despite its power generators. Again, this change is not supports and expect an acceleration of aimed at the solar industry specifically, but it growth in the sector is unrealistic. Solar will negatively impact it. By our calculation, will continue its growth regardless of these this change alone will increase solar tariffs to policies, but the cumulative impact of these consumers by close to 5%. changes would be material, and would work in the opposite direction of the government’s In utility-scale solar, it is relatively stated goals in this area. straightforward for the central and state governments to achieve their goals. February 2017 | Energy Next | 35
BUDGET 2017-18Sanjeev SainiDirector (Technical), Su-Kam‘The Solar powerequipment should bebrought under ‘zero’VAT/CST’India as a developing country has a tremendous potential for solar energy. work towards providing more benefits to the status. The interest paid on loans used for solar As our nation is facing a void in demand individual customers and end-users in terms of energy systems should be allowed as deduction - supply gap in energy, it is important to tax rebate etc. to encourage them to switch to from income while arriving (at) income tax fortap the solar potential to meet the energy needs. solar power back-up systems. The Solar power individual taxpayers as well.So, from this budget solar power industry equipment (like solar invertors, UPS, chargeexpects that the Government should provide controllers) should be brought under ‘zero’ The use of solar energy must be madebenefits in such a way that we can achieve VAT/CST regime similar to solar panels, all mandatory for new construction throughthe target of 40GW rooftop solar by the end across the country. building by-law. We hope that the RPO shouldof 2022. At the moment, we have achieved be implemented strictly by imposing penaltiesabout 1GW and thus to obtain the desired Further, we hope that the Retail lending on non-implementation. All forms of tax,goal, we need to go with at least 40X speed in facility through commercial banks for buying including CST, VAT and service tax shouldthe next 5 years. The government should also solar energy equipment should be made as easy be waived off on the grid connected and off as getting a consumer loan, in fact solar energy grid solar energy projects using indigenously sector should be given of priority lending manufactured system for a period of five years. Gautam Seth Joint Managing Director, HPL Electric & Power Ltd ‘A boost to positive schemes will be helpful to ensure best execution of these initiatives’We are expecting the roadmap for GST from the Government as a growth oriented budget which helps Government to ensure this will help our sector, especially the trade, provide the required boost to the economy proper and timely by clearing procedural delays. The market for by investments in infrastructure & housing is implementation of positive LED products is growing exponentially and what we are expecting from the Government.initiatives like the UDAY, IDPS Scheme a check in custom duties on these productsand Deen Dayal Upadhyaya Gram Jyoti - raising the duties on finished goods andScheme for the power sector. A boost to these reducing it on raw materials - will giveschemes in terms of funds and finances from impetus to Make-in-India initiatives whilethe Government will be helpful to ensure best also keeping a check on the influx of cheapexecution of these initiatives. products from other countries. Also a boost for R&D is required for development and We are also looking at a clearly defined updation of various technologies. Overall,36 | Energy Next | February 2017
INDUSTRY VOICESManish AggarwalPartner & Head of Energy & Natural Resources, KPMG in India‘The government to come up withsome more interventional policies toaccelerate the growth momentum’India’s energy sector has witnessed rapid potential is yet to be tapped. Clean energy measures to restrict or eliminate the rise of cost growth over the last one year fueled by cess is levied at the rate of INR 400 per tonne for developers. This is also critical to ensure interventional policies, reforms and on production of coal. The government envisaged wind capacity addition targets are met. investments. Various policy initiatives needs to make consistent efforts to utilize • Generation based incentive (GBI) forsuch as introduction of UDAY, amendments in the funds earned from clean energy cess to the past few years has been responsible forNational Electricity Act, new solar RPO target create a viability gap funding mechanism ensuring that the wind power projects remainfor states, bio fuel policy, small hydro policy, which could be used to support new hydro attractive to the investors. However, GBIoffshore wind policy, and new hydrocarbon installations. Hydro sector may also need is supposed to lapse on 31st March 2017.policy have all contributed to creating an a separate RPO obligation, some interest Since, we are far from achieving our 2022environment conducive to investments while, subventions; and may be some FIT support wind energy target, extending GBI by atattracting many new investors and global to get the sector revived. least another 2 years is expected to maintainpower players to India. • The basic objective of imposing ‘The Clean the growth momentum in the sector and to Energy Cess’ was to support the development support achieving of 60 GW target by 2022. But, despite all these developments, there are of renewable energy sector in the country. The • Government is yet to finalize the solarstill some long standing issues which need to be cess was doubled to INR 400 per tonne in the manufacturing policy. The said policy willaddressed and resolved at the earliest. There is a budget announcements in Feb 2016. But, now accelerate growth of the sector by reducing costneed for the government to come up with some that there has been a drop in price of solar of solar panels, other equipment, and overallmore interventional policies to accelerate the panels and other equipment which has led to a solar tariff, and by developing a solar ecosystemgrowth momentum in the sector. Hence, the reduction in solar energy tariff to a level which in the country. This policy is also criticalupcoming budget would be very crucial to the is close to achieving grid parity. Hence, there from the perspective of achieving 100 GW ofenergy sector. is anticipation that with solar tariff being very installed solar energy target.• Section 80 IA of Income tax Act 1961 close to achieving grid parity, this cess should • There is a need to encourage storageprovides 10 year tax holidays to the now be rolled back to the pre-2016 budget solutions, off-grid solutions, mini gridinfrastructure projects. Domestic energy levels, i.e., INR 200 per tonne.sector has been availing tax holidays under • With implementation of Goods andthis section in the FY17. However, to ensure Services Tax (GST), the tax benefits availeda sustained growth in the sector, extension of by the renewable energy sector are bound to80 IA tax holidays for at least two year period disappear. This will raise cost of productionwould be highly desirable. of renewable based energy. To have as less• It is high time that the Government of India of an impact as possible, Renewables(GoI) makes efforts to resolve the stressed (especially solar and wind) should beasset situation. A stressed asset revival fund kept in the lowest tax bracket of GST.empowered to perform capital as well as • At present, Accelerated Depreciationoperational restructuring of stressed power (AD) available to the wind sectorplants is expected to be carved out from stands at 80 per cent. AD is one of theNational Investment and Infrastructure Fund. crucial financial incentives which• Hydro power plants which are best suited has contributed to the renewablefor meeting peaking power demand would energy sector being recognized as arequire policy push from the government. very attractive and lucrative sectorThis is important to ensure smooth in India. However, it would now beintegration of large amount of renewables reduced from 80 per cent to 40 per cent startingto the grid. India has about 145 GW of April 2017. The government should take suitablehydropower potential, 70 per cent of this February 2017 | Energy Next | 37
BUDGET 2017-18 | INDUSTRY VOICESfinancing through some guarantee funds and / fuel of the future, the Government of India exploration and production facilities will helpor interest subventions. should ensure that there is a significant these facility owners avail additional benefits• Till now, it was only Coal India and its increase in the consumption of natural available to infrastructure projects and cover upsubsidiaries which were responsible for gas in transport, industrial use, and in for some of sunk cost.commercial mining and distribution of coal in domestic households. In the absence ofIndia. However, in the current evolving business sufficient domestic production, the gas has A more hand-on approach to resolutionlandscape, it is now becoming imperative for to be imported in form of LNG. To promote of the pending issues will be the key tothe government to open up commercial coal consumption of LNG, import duty of LNG the growth in the sector. Government hasmining to the private players. Private sector should be made at par with the import duty of demonstrated a strong vision for the sectorparticipation will ensure that it brings with it crude petroleum, which is presently zero. that encompasses energy security, clean /not only new and advanced mining technology • Exploration of oil and gas is a risky business sustainable energy, and affordable powerbut also lead to increased operational efficiency and at times explorers find no oil or gas. to all. The future of the energy sector looksand market driven coal pricing. However, mere Companies invest huge amount on exploration optimistic as higher investment flows areopening of the sector will not be sufficient, it and on setting up exploration and production envisaged owing to the various policywill call for the government to draw a clear cut facilities. No production results in sunk initiatives and the budgetary support. Today,roadmap to ensure the creation of a free coal cost for the companies and thus companies all eyes are on India to see how it can translatemarket in the country. involved in this business require support from words into actions as well as accelerate the• Realizing the importance of natural gas as the government. Infrastructure status for reforms momentum for a more sustainable and inclusive growth.W ind Energy sector in India K.R.Nair has witnessed tremendous President, Indian Wind Power Association growth over the last few years, backed by the ‘Govt should considerenabling policy initiatives and incentives lowering the interest rateprovided by the Government, which through interest subsidyhave created a conducive environment and extended tenor-debtfor investment in wind energy sector for wind projects’particularly by foreign investors. GBI be continued in the current form or any like Customs Duty exemption on import of The two incentives which have been the equivalent alternative incentive provided, so raw materials and components to boost thedriver of growth for wind industry in India that the investment continue to come in the domestic manufacturing of Wind Turbines.are Accelerated Depreciation (AD) and wind energy sector. There should be a differential customs dutyGeneration Based Incentives (GBI). While the structure for raw materials and finished goodsAD at 80 per cent is proposed to be reduced Section 80IA of the Income Tax Act, to incentivise local manufacturing. Whileto 40 per cent from 1st April, 2017, the GBI 1961 provides 10 year tax-holidays to introducing GST, since many exemptionsis also coming to an end effective from 1st infrastructural projects. Wind energy Industry of duty like excise and special additionalApril, 2017. We expect that the Government has been availing this tax holiday all along, duty enjoyed by the wind industry will bewill reconsider the matter and retain the AD which is proposed to come to an end on 31st subsumed in it, it is expected that the windto 80 percent at the current level as also the March, 2017. For a sustained growth of the industry be given zero duty structure in GST, wind energy sector, extension of 80IA tax as any higher rate would result in the increase holidays is required for another five years till in cost of production of wind turbines. 2022, the time frame by which the target of 60 GW has been fixed by the Government for The Government should consider wind industry. lowering the interest rate through interest subsidy and extended tenor- debt for wind The Budget for 2017-18 must address the projects, as also allocate more funds from concern of the Wind Industry relating to the Clean Energy Fund for development of the impact of Goods and Service Tax (GST) the wind energy sector. when introduced and provide fiscal incentives38 | Energy Next | February 2017
BUDGET 2017-18 | INTERVIEWGovt should play enabler inchanging market conditionsIncreased deployment and innovation will further drive down costs and promotegreater installations, says Amit Kumar, Partner, Energy & Utilities, PWC India,in a conversation with Nidhi Francis.QWhat are the growth drivers from non-fossil based sources by 2030 are The government has set a rather for the Renewable Energy very ambitious targets and timelines. In order to meet these, the Government has been ambitious target for the sector, do sector in India instituting a mixture of enablers in the form ofThe renewable energy sector has since the subsidies, policies involving simpler clearances, you think that industry is on trackpast few years gained immense momentum access to cheaper finance and a mixture of taxglobally. The shift to renewable energy sources concessions. A notable change was in tariff to achieve the targetscan be attributed to a diverse set of factors such policy released in 2016 that detail 8% solar RPO No doubt the targets of the Government whenas the increasing awareness of climate related by 2022 and a renewable generation obligation they were released around RE-Invest 2015issues and innovation/commercialization of for new coal and thermal plants. Another seemed ambitious. But, in the current scenario,renewable energy sources. underlying motive for the establishment of such the investments that the sector is witnessing targets is to reduce the quantum of our coal promise to contribute significantly towards the The renewable energy scale up plan of imports that stands at around 150 million tons attainment of these targets. The limiting factors175 GW by 2022 that was instituted by and ensure greater energy security for India. in case these targets are not met will not be thethe Government of India along with the lack of investments but factors related to gridsubsequently declared Nationally Determined The increase in focus globally and connectivity and stability issues that come alongContributions of achieving 40% generation implementation of such technologies has led with the deployment of a large percentage of to significant reductions in cost of generation renewable energy projects into a grid. Facilitating from such sources making these competitive these targets will require significant and effective and in some cases cheaper than conventional measures by the Government to facilitate the sources. In 2016, country witnessed a tariff of grid-integration of this electricity generated INR 4.34/kWh being bid out for solar projects along with ensuring confidence in the minds of thus providing a boost to faster adoption of developers that their projects will not be asked to solar projects in the economy. Innovation back down in future. in implementation of renewable projects, financing mechanisms, greater access to India already has wind power installations finance and a market of very significant size of over 28.7 GW against the targets of 60 GW have further strengthened this commercial by 2022. SECI has in this month received drive for renewable energy projects. bids of 2.6 GW against a capacity of 1 GW for the first reverse bidding auction for the wind energy sector. Similarly, the solar sector has seen remarkable growth in the previous year and has February 2017 | Energy Next | 39
BUDGET 2017-18established an even more remarkable pipeline of taken up in the budget this year in roughly a 5% increase in electricity tariffsprojects to be established in this year. The solar There are mixed expectation from this year’s but might be suitably countered by reductionspark and online reverse auction mechanisms budget. The industry players have been in the costs of generation.have proved to be very successful. India’s current demanding an increase in incentives whilecapacity stands at almost 10 GW and there are the objectives of the Government are to GBI close: Generation based incentives thatcurrently over 14 GW of projects in the pipeline adapt enablers with the change in market were offered to wind energy projects will expireand over 6 GW projects in the tendering phase. conditions so as to achieve maximum at the end of this year. Market expectations areThe auction for the Rewa project in MP that sustainable outcomes. Major expectations that these incentives will not be extended inwas opened this week has seen bids of 7.5 GW from the budget have been provided below. the current budget and wind energy will followbeing made by 20 players as against the total in the shoes of solar energy i.e. price discoveryproject capacity of 0.75 GW. Receiving bids from GST on solar: With the introduction of GST through reverse auction mechanism.20 players when the minimum bid size is of this year, the exemptions available to solar will250 MW depicts that sector has diverse players, be disrupted if appropriate provisions are not Establishment of a stressed asset revivalkind of financial leverage and appetite players made. Expectations are that the GST entailed fund: Increasingly, there have been talksoperating in this market have developed. in the manufacture and sale of solar modules around the establishment of a stressed asset and components for other renewable energy revival fund from amongst the National The part of the scale up targets that seems technologies will be made zero or kept in the Investment and Infrastructure Fund (NIIF)ambitious is the 40 GW of rooftop against which lowest slab to promote manufacturing in the that has the purpose of supporting stalledonly around 1 GW has been achieved till date. Nation and keep our products at par with and stressed power plants via means ofAlthough all but one state in India has come out competing Nations. capital and operational restructuring.with supportive net metering policies and SECIhas recently invited two bids for the development Excise and Customs: In order to promote Additional incentives and enablers canof 500 MW and 1000 MW rooftop solar projects, manufacturing in the solar PV segment, be expected for the rooftop solar projectsthere are still issues faced in the implementation one can expect a streamlining of import as these require substantial support so thatof solar rooftops such as in obtaining clearances duties on modules and system components, rooftop solar gains momentum and come tofrom distributions companies and regulatory with an aim of making the domestic high growth path. Hon’ble Power Ministercommissions. However, the rooftop segment is manufactured items more competitive. Mr Piyush Goyal has also indicated recentlytouted to be amongst the main focus areas of that one can expect tax sops in the comingthe Government in the coming years and may Accelerated Depreciation (AD): The budget for the promotion of renewables withwitness significant policy interventions that accelerated depreciation benefit available to a focus on solar rooftops. Hydro Projects thatclubbed with the fall in prices of generation may renewable energy is likely to decrease further in are greater than 25 MW may also be grantedexponentially boost the total installations in this the coming budget which is 40% now and was incentives similar to renewable energysegment. 80% previously. This is considering that AD has sources such as lower tax rates and deemedWe see the industry players have become a relatively weak driver in the sector and export status to propel this sector forward.been demanding more incentives may be replaced by alternative enablers.for the growth of the sector, what Government had introduced thekind of measures are likely to be Income tax holiday: The income tax holiday “clean energy cess” to support of ten years that was recently awarded to solar the development of the renewable power projects for a period of ten years may energy sector, and later widened be done away with this year. This might result40 | Energy Next | February 2017
INTERVIEWits ambit. Has this clean energy GBI is supposed to lapse on March the current grid system that we have. There maycess made any impact on the 2017. Do you see the government be transmission, grid balancing and other suchgrowth of the sector? Are we likely giving an extension to this project issues if the generation from these sources can’tto see any changes on this front in in order to achieve targets be easily and accurately forecasted. Further withthe budget GBI was first introduced in December 2009 with an increase in the supply of energy to the grid,The coal cess was introduced under the a target of supporting the deployment of 4 GW appropriate measures will have to be taken toNational Clean Energy Fund in the budget of of wind energy installations. The scheme was ensure that renewable energy projects are not2010-11 and its value was then kept at INR then renewed in September 2013 and extended asked to back down. In the present scenario50/tons. It has since been increased on three up to March 2017. As of October 2016, around there have been multiple cases where windoccasions and is at INR 400/tons currently. In 7000 MW of wind power projects had been power developers have been asked to back downthe previous year, the cess raised INR 12,623 implemented under the GBI scheme. their generation, which in turn lends a bad namecrores and in the current financial year, it to the industry and will definitely hamper theshould be around INR 26,000 crores. This MNRE had previously sanctioned a study to addition of new capacities and the investmentscess was initially known as the clean energy evaluate the effects and current requirements that are expected to be made in this sector. Thecess and its contributions were entirely for of the GBI scheme, wherein it was determined green energy corridor that was being planned isthe clean energy sector but was later renamed that alternate business models such repowering a viable solution to this problem but will requireas Clean Environment Cess. Under its gambit existing plants, streamlining inter-state sale of significant investment and time to take shape.now, other developmental activities that are power and promoting competitive bidding for Recently solar tenders involving storage haverelated to the environment such as the Ganga wind power may prove advantageous in the been released by SECI, which is a commendableRejuvenation Plan and development of green current market. To this effect, all three of these step in this direction as well.infrastructure have also been included. suggestions were implemented in the second half of the previous year with policies for the first two Regarding solar rooftops, the owners The amount that is being generated is almost being released by MNRE and a competitive bid face many issues like obtaining thedouble of the annual budgeted expenditure of for 1000 MW of wind being released by SECI. requisite permissions and clearances fromMNRE that is around INR 14,000 crores and is local departments for grid connectivity andproposed to contribute to their entire budgetary With the introduction of these enablers for net metering permissions. Additionally,support of INR 5,000 crores. the sector, the feeling is that the Government will there are frequent delays in the disbursal of not continue with GBI for the sector. The major subsidies and an insignificant percentage Although majority of the amount is issues currently are in the sale of wind power and of the installations currently have beendedicated to activities other than those certain Discoms asking wind power developers implemented in the RESCO mode.related to the renewable energy sector, still to back down. To counteract this, there havethe quantum of funds allocated to this sector been talks of procurement based incentives that What is your medium term outlookhas been sufficient to place this sector on the may be awarded to Discoms if they complete for the sector going forwardpath of exponential growth. Since the past their payments within a certain time period and All stakeholders in renewable energy willfew years almost all subsidies and incentives do not ask wind power developers to back down. agree that this sector has gained significantbeing provided to the sector have been momentum in recent times and is on acontributed by this fund. When we consider Industry players often talk about high growth path from here on. Innovationthat renewable energy sources, particularly some gap in the policy and its in terms of storage technologies andsolar energy have grown from less than 50 implementation at various levels, advancements in grid integration will paveMW to almost 10,000 MW after the inception can you identify some critical the way for increase in renewable energyof the NCEF, one can confidently say that it areas that need immediate deployment. Increased deployment andhas proven to be a very successful and effective attention innovation will even further drive down costsstep introduced by the Government of India. India has seen most of its growth in the and promote greater installations. Although renewable energy sector in the past few years there is no doubt on achievability of 175 GW In this budget however, we expect that the despite bottlenecks, which are pertaining to installations in the country, there could becoal cess will remain at its current value of INR implementation of policies, mainly because the debate on timeline. Further, establishment of400/tons as the burden of this cess currently roles of stakeholders are not properly defined 2030 NDC targets provide confidence that thisis significant on coal players and also there and lack of infrastructure or resources to sector has long term focus of the policymakershave been significant reductions in the costs of achieve what we plan out to do. The two major and its advancement is here to stay.generation of renewable energy sources. Also, issues that need attention are a) Ensuring themore clarity with regards to the disbursement integration of renewable energy into the grid; With the number of players that haveand operationalization of the NCEF is required and b) Enabling swift and easier implementation entered in the Indian market particularlyand may be provided this time. of solar rooftops. the solar and wind energy, the investments that are being made and are forecasted; weGeneration based incentives Renewable energy sources of generation are can safely infer that the sector is promisinghave somewhat aided the sector intermittent and may cause electricity grids to in both the medium and long term.especially wind power projects, become unstable if their proportion is high in February 2017 | Energy Next | 41
WINDSailing towardsglobal leadership India and China are the two fastest growing markets and India has a pride in place with over 90% of the investment coming from the private sector through IPPs, writes DV Giri. Globally, the wind energy sector Similarly India also installed 3472 Mega has witnessed a tremendous Watts in the financial year 2015-16 and it will growth in the 2016, with be a land mark year for the industry in 2016- India being ranked 4th for 17 to cross over 4 GWs. global wind power installation as issued by the report of Global Wind Energy India and China are the two fastest Council (GWEC) following China, USA growing markets and India has a pride and Germany. The collective wind power in place with over 90% of the investment generation capacity of India is 25088 MW. It coming from the private sector through IPPs. is expected touch 30 GW by March 2017. The Industry also gets support from profit making PSUs like the Navratnas. India is It is a matter of pride for the association perhaps the cheapest in capital cost with over (IWTMA), as it has been a combined effort 75% local decision truly contributing to make that has culminated into this achievement. in India. Last year was very successful for the wind industry worldwide. Wind Industry should not be seen in Isolation as yet another source of Renewable42 | Energy Next | February 2017
IWTMA India and China are the two fastest growing markets and India has a pride in place with over 90% of the investment coming from the private sector through IPPs. It would be appropriate to act that apart Energy there is a potential for off-shore wind from India having to achieve 40% cumulative energy development and a policy has been electric power from non-fossil fuel based cleared and notified. The first project of off- energy resources by 2030 with the help shore wind with a participation of European of transfer of technology and low cost Union and NIWE will lay the foundation to International Finance including from Green exploit this potential. Climate Fund. To conclude if energy security is to be RE sources especially Wind & Solar achieved and our growing concerns of will play a critical role in the energy climate change and global warming, the mix to achieve energy security. It is not exploitation of Wind Energy will happen and exaggeration that oil, coal and gas is not it will play a vital role. going to last forever and it is critical to manage. The use of fossil fuels for longer IWTMA is 18 years old organization sustainability to the growing needs of fast which has been working towards the developing country like India. formulation of policies for the sector and liaisoning between the Turbine The industry is well poised for tremendous manufacturers and the government. IWTMA growth with a manufacturing base of 9,500 was established to aggressively campaign MW per annum which is expected to grow for a Green Revolution to encompass the into 13,000 MW in the next couple of years, economy, business, and rural employment, aggressive participation by IPPs and a and to contribute towards energy self- potential of 302 GW at 100 Meter hub-height reliance for the country. The Association estimated by National Institute of Wind has been an important stakeholder in the Energy (NIWE). development and growth of the wind power industry. Today, with our endeavour and The challenge comes from grid support from the ministries and other augmentation and participation of all departments, we have been able to achieve a Wind States in performing their Renewable lot but still there is a long road ahead and our Portfolio obligation is now restricted to the mission to achieve 60GW by 2022. Wind States. The author is Secretary General, Indian Wind Scheduling and Forecasting are key Turbine Manufacturers Association elements to achieve laudable goals. (Views expressed by the author is personal)Energy as it is a game change here to rural While the above is for on shore Windeconomy and rural employment. It may be further emphasized that themanufacturing industry carries out a numberof CSR programmes to the Welfare of therural people. The Ministry of New and RenewableEnergy, Government of India has takennumber of initiatives to promote the sectorsuch as Accelerated Depreciation (AD)Generation Based Incentive (GBI), RECmarket as a tool to help DISCOMS andthe price discovery mechanism and energycertificates and the current implementationof 1 GW through Competitive Bidding. February 2017 | Energy Next | 43
WINDWind:A viableinvestmentoptionVarious Government incentives at central level like Accelerated Depreciationand Generation Based Incentive are big drivers for the industry says RameshKymal, Managing Director at Gamesa Wind Turbines Pvt. Ltd, in aninteraction with Anurima Mondal.Q India ranked 4th milestone. Tell us something Despite being a late entrant position in global wind in the country’s wind-turbine power installed capacity about your contribution in market, Gamesa Renewableand Gamesa was one of the became India’s largest windmajor companies that helped India’s wind energy market. turbine maker. How did youthe country to cross the India’s renewable energy has witnessed manage to achieve this tremendous transformation redefining the significant milestone in such a industry outlook. In 2016, India recorded the short span of time? highest wind installations with over 3400 MW Gamesa has consistently offered tailor in which Gamesa has contributed over 1 GW made solutions that suit the Indian wind of installations. Even though Gamesa was scenario and our focus on developing skill a late entrant in the country’s wind turbine in the country has aided our expansion market, we have successfully installed wind here. Technology is a key differentiator capacity of over 3500 MW till date and hold and our strong Research and Development the leadership position with a market share of activities have helped us pave the way in over 30%. Our 1st 1000 MW took us 4 years, the industry with our intelligent turbine 2nd took us 17 months and the 3rd has just designs that help extract maximum out taken 9 months to achieve. This goes to show of low wind sites. Our robust EPC and that Gamesa has established a strong foothold project execution capabilities backed in the country and is planning to further boost its capacity and operations.44 | Energy Next | February 2017
INTERACTIONby a widespread and reliable service this growth. We believe this growth will Where do you see yourorganization have helped us reaffirm continue despite some policy changes as company five years from now?our position in this space and gain trust Wind is now much more competitive and For the last three years, we have successfullyamong customers. would be a viable investment. maintained our market leadership position and are very much on track with ourCould you tell us about your India has a target of installing forecasted growth for this fiscal too. We havecore strengths that make you 175 GW of wind power capacity recently started our Solar Business. While wedifferent from other players? by 2022. What are the concerns hope to maintain our leadership & marketThe Indian market accounts for 29 per cent that you may suggest to help share in the Wind Space, we are confident ofof our global sales. In line with Make in India in achieving the target? scaling up our Solar EPC & Inverter businessIndia, Gamesa already operates two nacelle The demand for power in India is evident to be among the best in the coming yearsmanufacturing facilities near Chennai, and will keep growing to power theTamil Nadu and a blade manufacturing economy. The industry is geared to meet What advice would you like toplant in Halol, Gujarat. The company the requirements while investors are keen give to young entrepreneurshas also invested in joint Venture for to be part of this growth story. However, who want to penetrate theTower manufacturing at Halol, Gujarat. as the scale grows, there is a growing Indian wind energy market?Our upcoming Nellore facility will be an concern as the existing Grid infrastructure As a young entrepreneur makingaddition to the Make in India initiative of in not adequate to absorb such huge themselves aware of the current windGamesa. Various factors like geo-political amounts of the Renewable Energy. It is energy market both in India and globalopportunities and energy demand and the need of the hour to expedite the Green is very essential. India is short of power,growing economy are providing huge Corridor projects across India & also set and thus, new renewable capacity shouldopportunity to manufacture in India. up RE Management Centers to effectively focus on producing electricity for theOur Global installation base of 38 GW evacuate the power from all the RE undersupplied market. India now has ahas enabled Gamesa to establish itself as projects. Another key concern of investors golden opportunity to shape its energya provider of reliable wind solutions and is the off-taker risk. Most distribution mix with social and economic growthwe plan to further boost our capacity and companies are financially distressed thus at the top of the government’s agendaoperations in India. This is a result of a strong making the projects un-bankable. Signing and new energy sources to serve thiswind assessment expertise, supply chain, PPAs and payment delays are major demand are increasingly coming fromdevelopment pipeline built by professional stumble block for investors. We appreciate renewable energy. As renewable energyteam that aims to deliver every project on the UDAY initiative which aims to address gains prominence, Grid managementtime. Despite being a multinational we have these issues; however, this needs to be will become a critical focus area. Hybridhad a very focused & regional approach more cohesive with greater involvement Systems, Smart Grid Solutions & Energywhich enables the company to adapt & serve from states. RPO compliance is also Storage would be some of the growthour customers better while offering the best expected to improve once the utilities are areas likely to complement & further drivein class global technology. financially stable. growth of Renewable Energy.What do you think was thereason of such massivedemand in 2016?For the last two years, India has beengrowing rapidly and presents anopportunity for us. We see India as agrowth market with various nationallevel and state level policies driving therenewable capacity across the country.Various Government incentives at centrallevel like Accelerated Depreciation andGeneration Based Incentive are keydrivers for the industry. The Govt hasalready indicated that some of thesebenefits will be scaled down in 2017which has spurted further accelerationin installations. Foreign investments &lending has been instrumental in driving February 2017 | Energy Next | 45
WINDThe sector truly propels‘MAKE IN INDIA’Indian wind sector is capable of achieving 60 GW target by 2022,says Tulsi Tanti, Chairman and Managing Director, Suzlon Group,in an interaction with Anurima Mondal.QIndia ranked 4th position in improving the energy yield global wind power installed and bringing down the cost of energy. capacity index and Suzlon The technological innovations led by Suzlonwas one of the major companies have been implemented in many areas viz. thethat helped the country to cross size and weight of rotor blades, to increasingthe milestone. Tell us something the height and type of towers (75 meter latticeabout your contribution in India’s towers, tubular towers to S97 120 meter hybridwind energy market. towers). Furthermore, majority of the turbines in India installed up to the year 2000 are below With ~28.5 GW wind energy installations, 500 KW capacity. Today, we have machines ofIndia attained 4th position in global wind power up to 2.1 MW capacity and above.installed capacity, of which 10 GW has beencontributed by Suzlon in the Indian market. We are exporting wind product and technology to more than 30 countries in Suzlon wind installations are capable of the world and have made India a globalpowering over 5 million households per manufacturing and technology hub forannum and offsets ~21.5 million tonnes of wind energy. Wind sector is truly ‘Make inCarbon Dioxide (CO2) emission annually. This India’. We are a fully vertically integratedinstallation also accounts for ~22% of India’s manufacturing company which provides end-renewable energy sector and 35% in India’s to-end solutions and have 14 manufacturingcumulative wind energy installations. Wind facilities across the country.technology has witnessed a change over thepast two decades. Efforts are now focused on Suzlon pioneered the ‘concept to commissioning’ model in the wind energy industry, offering complete end-to-end solutions to harness wind for energy generation. In the next 5 years, we plan to build almost 15 GW energy assets in India. Suzlon has recently achieved 10,000 MW wind capacity in India. How did you manage to achieve this significant milestone? Two decades ago, Suzlon Group embarked on a journey in the clean energy space from Gujarat. With cumulative wind energy installations of over 16,000 MW worldwide, Suzlon operates46 | Energy Next | February 2017
INTERVIEWacross 19 countries and has over 1800 customers Suzlon pioneered the ‘concept toacross the globe. commissioning’ model in the wind energy industry, offering complete end- This landmark achievement is a testament to-end solutions to harness wind forof our customer’s confidence in Suzlon’s energy generationtechnologically advanced products and projectexecution and service capabilities. Our focus Our R&D efforts have resulted in path- received 50 MW order from leading powerhas always been on upgrading our technology breaking new products such as the S97 120 utility in the state of Gujarat.and hence we have advanced our technology to and S111 meter hybrid towers. The towersharness wind energy at even Class II wind sites. in addition to getting our latest rotor designs What initiatives have you taken to into winds with higher energy also require one reduce Levelised Cost of Energy We have established a multi-pronged strategy third less concrete for their foundations and (LCoE)?that covers continuous R&D and innovation in are easier to transport to the site We have invested close to USD 250 million in thedesign, manufacturing and O&M services. o The S97-120 m is giving 35% PLF in India, last 5 years towards R&D and continue to do so which is the highest PLF turbine in the country with an aim to reduce the cost of energy further Over the years, Suzlon has been leveraging o The S111-120 m is forecasted to provide a 40% by 25 % in the next 5 years.technology to consistently increase the plant to 45 % PLFload factor (PLF). The S97 120 m (2.1 MW) Aligned with the government agenda, we areturbine with hybrid tower has achieved 35% With its foray into the solar segment, Suzlon striving for sustainable and affordable energy forPLF. With the help of a prototype of the S111 is one of the few players to provide turnkey all by focusing our R&D efforts on developing120 m hybrid tower turbine installed at Bhuj, solutions for solar projects. high yield products that effectively bring downGujarat is expected to deliver 40% PLF. the LCoE and improve customers’ Return on Suzlon has recently bagged 105 Investment (ROI). This has resulted in path- We are present across all nine high wind megawatt (MW) order from Axis breaking products:potential states of India i.e. Gujarat, Maharashtra, Energy Group in Andhra Pradesh. o The S97-120m (2.1 MW) turbine with hybridAndhra Pradesh, Telangana, Tamil Nadu, Which other states are you tower which enables viability of low wind sitesRajasthan, Madhya Pradesh, Karnataka and focusing on? and has 35% PLF.Kerala and have invested in setting up 14 Suzlon is a market leader in India with a global o The S111 (2.1 MW) turbine prototype hasmanufacturing units in strategic locations to footprint across Asia, Australia, Europe, Africa, been successfully tested in India and USA. Incater to high wind potential sites. North and South America. Over the past two India, it is amongst the few in its class to have the decades, Suzlon has built and consolidated its largest rotor diameter spanning 111.8 m. S111Could you tell us about your core presence in 19 countries. is one of the highest yielding IEC Class III windstrengths that make you different turbine.from other players? Post the Axis Energy Group order win, we o The S111 120m hybrid tower prototypeWe are the market leader in India and secured a repeat order of 226.8 MW from a turbine commissioned in Gujarat in March 2016have a global spread extending across Asia, leading Independent Power Producer for a targets a PLF of 40%.Australia, Europe, Africa and North and project in Andhra Pradesh. Additionally, weSouth America with installations of 16.07GW across 19 countries of which over 10GW is in India. We are industry leaders particularly inaerodynamic technology which is one of ourbiggest USP. We have our R & D centres inGermany, Netherlands, Denmark and India.Last year, we established a Blade Science Centrein Vejle, Denmark, which will work on thedevelopment of aerodynamics, pitch controlsystems, smart controls and new structures Our R&D efforts are focused on the following:o Lowering the LCoE by 20% in the next fiveyears with new turbineso More efficient turbines to make previouslyunviable sites viableo Continue to increase our plant load factor andto stabilize the grid in Indiao We envision gigawatt size projectssupported by increasing digitization and bestin class service February 2017 | Energy Next | 47
WIND | INTERVIEWIndia has a target of installing India, while Solar is imported from China. in Green Energy Corridor project. During4600 MW of wind power capacity Incentives for local manufacturing and job the Union Budget 2016, the coal cess wasin 2017-2018. Tell us two things creation in the sector should be considered doubled to Rs. 400/tonne, thereby, creatingthat you would like to address for o Implement the EXIM practices of China the resources to achieve the 175 GW target.achieving the target? and USA that gives a line of credit of $1 The government’s commitment to improveTo continue the momentum in the renewable billion and $2 billion respectively, in case of grid infrastructure also reflected in theenergy, the government should consider the exports by local companies. In India, EXIM proposed additional depreciation for thefollowing policy recommendations offering is limited to $200 million per year. plant and machinery acquired, installed foro Long-term policy predictability: Accelerated RBI should remove the 10% limit imposed to transmission activity.Depreciation (AD) and Generation Based one company or infuse $5 billion fresh equityIncentive (GBI) should continue till 2022 to EXIM What are your future plans?o Banks and financial Institutions should Aligned with the ‘Make in India’ initiativeearmark at least 20% finance for Renewable Do you think India has a and the green commitments of the IndianEnergy projects and provide finance for business-friendly environment? Government, we aim to install 15 GW in thelonger period of 20-25 years. What are the major challenges next six years.o SMEs should be supported by 5% interest you face as a wind powerrebate for using renewable energy for captive producing company? Our focus areas include R&D to harnessrequirement. The government’s thrust on renewable technology and reduce Cost of Energyo Improve availability of grid and land energy has helped the business environment. (LCoE), increase Plant Load Factor (PLF)infrastructure at State level Alignment of State and Central Government and make low wind sites viable, ramp upo GST for RE projects at zero rate, since has increased, which has impacted the volumes, expand our presence in focusedelectricity is not subsumed under the execution of renewable energy projects. markets, realize business efficiencies,proposed GST framework introduce new generation products, enableo Provide manufacturing with support There are various policy actions such digitalisation to enhance services and furtherto facilitate innovative financing, increase as approval on the repowering policy, the optimize capital structure.capabilities, facilitate job creation and draft wind-solar hybrid and revised RPOmeet the ‘Make in India’ initiative. Wind trajectory. Further, policy impetus included, We are also working on setting up utilitymanufacturing capacities are created in 1 GW under Inter-state transmission scheme scale, GW size renewable projects. With (ISTS) across various states and investments our foray into solar energy, we have already expanded our portfolio and presence.Aligned with the ‘Make in India’ initiativeand the green commitments of the A Wind-Solar hybrid is another conceptIndian Government, we aim to install 15 that is gaining momentum in the industryGW in the next six years and Suzlon is focusing on it. This option optimizes land usage, grid infrastructure and offers energy reliability through complementary forms of energy generation. We are confident that, with our plans and strategies, we are well on the way to achieving our vision of becoming one of the best renewable energy companies of the world. What are your expectations from Indian renewable market? The renewable energy landscape both in India and globally, is undergoing significant transformation. With over 28 GW wind energy, India today is the fourth largest in terms of wind installed capacity. We see the demand for clean, sustainable and affordable power continuing especially in emerging markets. India’s commitment at COP21, to reduce 30% to 35% carbon emission and increase renewables to 40% of the energy mix by 2030 will continue to give impetus to incremental demand for renewable energy.48 | Energy Next | February 2017
WIND | FOCUS‘Indian market looks forinnovative Cos.’India has ample growth opportunities, says V Sai Baba, CEO, SolarBusiness & President Strategy Business Development, Inox Wind Ltd in aninteraction with Anurima Mondal.QIndia managed to step Renewable Generation Obligation (RGO); Could you tell us about your core up to a good 4th position setting up of exclusive wind/solar parks; in global wind power development of power transmission network strengths that make you differentinstalled capacity. What do you through Green Energy Corridor project etc.think has helped the country from other players?achieve this milestone? However, there is large gap between No.1 and Inox Wind is India’s leading wind energyYes, India ranked 4th in the Global Wind No 4 that indicates that there is lot more to be solutions provider servicing IPPs, Utilities,Power Installed Capacity Index with done and what we have is not enough. PSUs, Corporates and Retail Investors.cumulative installed wind power generation It is a fully integrated player in the windcapacity of 25,088 MW, behind China What has been your contribution energy market with three state-of-the-art(145,362 MW), USA (74,471MW) and in making India a major wind manufacturing plants in Gujarat, HimachalGermany (44,947 MW). The credit for this energy producer? Pradesh and Madhya Pradesh with aachievement goes to the Government which is Inox Wind with 1600 MW of capacity, ~800 cumulative manufacturing capacity of 1,600determined to increase share of clean energy MW of installation in FY16 and ~2000 MW MW. Inox’s WTGs are based on AMSCthrough massive thrust in renewables. Other of cumulative installation has played very technology and we currently offer our clientsdriving forces behind this development were active role in wind energy capacity installation multiple blade and tower variants of the 2 MWClimate change and India’s commitment in India. We have recently commissioned turbine. Inox’s WTG are equipped with DFIGto reduce CO2 emission, need of energy a Greenfield plant at Barwani (Madhya technology which is one of the most advancedsecurity, current shortage of electricity and Pradesh). This integrated manufacturing technologies being used globally. The sweptlow access to economical energy in large part facility manufactures blades & towers, and area per MW is also one of the highestof the country. The Government has been will manufacture nacelles & hubs in the which we believe makes the WTG suitablepromoting renewable energy generation by future. This facility at M.P., which will be for low windy sites and climatic conditionsoffering various financial incentives, such as amongst the largest in the world, has doubled such as those prevalent in India. We havegeneration-based incentives (GBIs), capital Inox Wind’s manufacturing capacity to 1,600 obtained ISO 9001:2008, ISO 14001:2004,and interest subsidies, viability gap funding, MW per annum. So, we are working towards OHSAS 18001 and ISO 3834 certificationsconcessional finance, fiscal incentives among sustainable environment with economical for our management systems pertaining toothers. Government has implemented various power to our country and this is our manufacturing, installation, commissioningschemes for growth of this sector such as contribution to the nation. and O&M of wind turbinesRenewable Purchase Obligation (RPO) and Inox Wind provides turnkey end-to-end February 2017 | Energy Next | 49
WIND | FOCUSsolutions, including wind studies, energyassessments, land acquisition, site infrastructuredevelopment, power evacuation, statutoryapprovals, supply of WTGs, erection andcommissioning and O&M of the wind farms. Wecurrently have 1350 MW of strong order bookand ~4700 MW of projects sites which we offerto our customers.NTPC has joined hands with China. The only bottleneck we see to achieve cost in India. Moving in this direction, weyou for a 50-MW wind project to this target is slow policy announcement. States have entered into collaboration with ourbe deployed in Gujarat. Please come out with FITs very late; in some cases 6-9 technology partner AMSC to develop a 3share more details about this months post expiry of current FIT and that FIT MW turbine specially designed for Indianpartnership. is for one year only in some cases so the vicious market. This product should be availableIt was a proud moment for us when Inox joined circle continues. Signing of PPA is also a long & in FY19 and would be a game changer inhands with NTPC Limited, India’s largest energy time consuming process which should also be Indian Wind power industry. With superiorconglomerate in Dec 2016 to supply and install in timely manner. Industry is mature enough to technology and efficient cost structure, we50MW of advanced 2MW DFIG 100 rotor take care of other issues. want to improve return on investments fordia Wind Turbine Generators. This 50MW our customers and want to reduce cost ofmaiden order marks NTPC’s foray into Wind Do you think India has a power in India.energy generation. The move is a part of the business-friendly environment?company’s target of sourcing about 11% of What are the major challenges What are your expectations fromits planned capacity of 128 GW by 2032 from you face as a wind power Indian renewable market? Pleaserenewable energy. The Project is scheduled to producing company? share your pre budget views.be commissioned by Q1 FY 17-18 and will be Inox Wind has grown from revenue and India has enough policies and incentives toexecuted from concept to commissioning by us. profit of Rs 73 crore and 6.4 crore in FY11 provide impetus for strong growth. We have to Rs 4, 414 crore and Rs 453 crore in FY16 policies, fiscal and financial incentives areWhich other states are you respectively and we generate our entire all in place; however, proper execution is thefocusing on? revenues within India. This makes it very only bottleneck. For example, RPO policyInox has capacity, expertise and presence in all clear that Indian consumers have appetite alone can create demand for 28000 MW8 windy states in India. In current financial year, for products/services which suits there wind capacity if implemented in a disciplinedwe are executing projects in Gujarat, Madhya requirement and provides value for their manner. Our only demand from governmentPradesh, Andhra Pradesh and Tamil Nadu. money (return on investment). Now, whether is that there should be unambiguousIn FY16, we executed projects in Madhya India has business-friendly environment or guidelines/policies which should bePradesh, Gujarat & Maharashtra and were not is a question of perception. Yes, there announced well in advance and for longerno.1 in these three states in terms of capacity are some unique challenges but it has ample term (like FIT by states should be announcedaddition. Previous to that, we have executed growth opportunities. well before end of existing FITs and shouldprojects in Rajasthan, Gujarat & MP and have be for at least 3 years). Post announcementdone very well in terms of capacity addition. So Where do you see your company implementation should be top priority.in nutshell, we have resources and capabilities five years from now?to set up plant anywhere in India as per Our vision is to be amongst the leading What advice would you like torequirements of the customers. renewable energy companies globally give to young entrepreneurs who through technological and operational want to penetrate the Indian windIndia has a target of installing excellence. We want to establish ourselves as energy market?4600 MW of wind power capacity a leading provider of integrated wind energy I would like to advise young entrepreneursin 2017-2018. Tell us two things solutions in India and to expand to markets that Indian market accepts active, awake andthat you would like to address for globally. We want to provide state-of-the- innovative companies. There is no place for thoseachieving the target. art technology products and economical who are oblivious of changes.Yes, India has target of adding 4600 MW powercapacity in FY18 and cumulative capacityaddition of 60 GW by FY22. India has demandand capability of adding more capacity thanthis. If we look at China, our cumulativerenewable capacity is just 17-18% of that of50 | Energy Next | February 2017
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