Abstract
The 12th Plan (v/s 11th Plan) renewable capacity addition to slowdown
CARE Research expects the 12th Plan (2012-17) the renewable especially wind
capacity addition to slowdown due to removal of tax benefit. However, wind
capacity addition is likely to maintain its dominant share in the capacity
addition. At present, the policy environment needs a boost to achieve as
removal of Accelerated Depreciation (AD) scheme from April, 2012 is likely to
act as dampener resulting into sharp slowdown in wind capacity addition in the
12th Plan. Moreover, solar capacity addition is purely RPO driven; hence
institutional framework needs to be strengthened for higher and sustainable
capacity addition run-rate. Finally, State level policy issues related to
Small Hydro Power (SHP), Biomass, Co-generation, Waste-to-Energy (WtE) sectors
need to be sorted out to improve 12th Plan capacity addition.
With AD benefit removed, capacity addition to fall; IRR to shrink by 300-400bps
AD benefit was removed from April 1, 2012, which was a major driver for wind
installations in the 11th Plan. The country added 3.2GW of wind capacity in
FY12 (last year of the 11th Plan), which is expected to fall sharply due to AD
benefit removal. Consequently, CARE Research expects capacity addition to fall
to sharply from FY13 onwards. The Central Board of Direct Taxes (CBDT) issued
a notification on 30th March 2012, that the depreciation on wind mills will be
restricted to 15% from the current financial year (with and additional 20%
depreciation on equipments). This marks a significant change to the incentive
structure as AD benefit typically increases project IRR by around 300-400bps,
with other factors held constant. Thus, the industry would move strongly
towards IPPs driven from a typical retail investor driven structure a few
years ago.
Indian capacity glut to pressurise WTG margins; ancillary market to deepen
Indian wind market is primarily small captive player driven which used to
invest in wind turbines primarily to avail tax-shield. With AD benefit
removal, the wind equipment market is expected to shift towards large IPPs.
Consequently, CARE Research believes that this coupled with capacity glut can
continue to put pressure on wind equipment industry margins over the near to
medium term. However, ancillary component manufacturing in India can partially
help negating the margin pressure as lead time faced for procuring small
components which are currently imported from Europe and China may contract
significantly.
Table of Contents
SECTION- I CARE Research's OUTLOOK
Outlook on Indian Renewable Energy Sources
- 12th Plan (2012-17) to add 19.7GW; funding requirement of Rs1.35tn
- AD scheme removal to hurt wind capacity momentum; IRRs to fall by 300-400
bps
- Indian capacity glut to pressurize WTG margins; ancillary market to deepen
- Solar Grid Parity by 2017, few states to reach it even before the 12th
Plan end
- JNNSM Batch-II bidding aggressive; State preferential bids are still
lucrative
- Capital costs underestimation; higher raw material prices to hurt biomass
sector
SECTION- II INDUSTRY SECTION
Indian Renewable Policy & Regulatory Evolution
- Electricity Act, 2003
- National Electricity Policy, 2005
- National Tariff Policy, 2006
- Rural Electrification Policy, 2006
- Integrated Energy Policy
- National Action Plan for Climate Change
- Feed in Tariffs
- Generation Based Incentives
- Rationale
- Jawaharlal Nehru National Solar Mission
- Renewable Purchase Obligation and REC Mechanism
- National Clean Energy Fund
Carbon Credits
- An introduction
- The Kyoto Protocol
- Clean Development Mechanism
- How to Register for CDM benefits?
- Methodologies to Calculate CER benefits for renewables
- Applicability
- Identification of Baseline Scenario
- Monitoring Methodology
- Kyoto targets and demonstrable progress by Annex-I countries
- Carbon financing
Wind Energy
- An introduction
- Global wind scenario
- Indian Wind resource potential and installed capacity
- Wind tariffs and Generation Based Incentives (GBI)
- Wind technology improvements and trends in India
- Indian Repowering potential
- Benefits and challenges
- State-Wide repowering potential
Solar Energy
- An introduction
- Solar Plant and technology types
- Photovoltaic
- Concentrating Solar Power (CSP) plants
- Global Scenario
- Why Globally Solar PV Module prices crashed?
- Centre and State Policies
- Jawaharlal Nehru National Solar Mission (JNNSM)
- Objectives and targets
- Project guidelines under JNNSM
- Key concerns
- State policies
- Solar potential and installed capacity
- Bidding under JNNSM Phase I (Batch II) seems aggressive
- Key observations
Small Hydro Power (SHP)
- An introduction
- SHP resources and potential
- State policies
- Problems associated with SHPs
Biomass/Biogas and Cogeneration
- An introduction
- Biomass/Biogas Potential and installed capacity
- NAPCC
- Objectives
- Target
- Conversion of Biomass to electricity
- Problems associated with Biomass
- Raw Material scarcity
- Lack of Fuel Pass-through arrangements
- Long Control period
Waste to Energy (WtE) generation
- An introduction
- Types of Waste
- Installed capacity and potential
- Present situation of Municipal Solid Waste (MSW) generation in India
- Solid Waste management
- Per Capita MSW generation
- MSW composition
- Issues and challenges in WtE
Off-grid renewable energy applications
- An introduction
- Off-grid renewable applications-impact assessment for Rural Electrification
- Advantages
- Saving transmission costs
- Lowering T&D losses
- Disadvantage
- Can Hybrid systems have better economic viability?
- Solar Hybrid concept
- Hybrid System applications
- Net-metering and Rooftop based PV systems
- Solar powered rural telecom towers can soon become a reality
RPO & REC Framework
- Renewable Purchase Obligation
- Salient Features of REC framework
- Advantages of REC mechanism
- Inter-state transmission
- Promotion of Stand-alone systems
- Competition in Electricity market
- Overcoming the barrier of natural diversity
- Alternative to meet Renewable Purchase Obligation
- Attract investment
- How can REC mechanism aid renewable market development?
Comparative Analysis
Renewable financing
- Renewable funding scenario
- Wind Business models and financing
- Solar project financing
- Various problems faced by financial institutions in solar projects
- Current PPA structure
- Limited availability of Solar irradiation data
- Weak financial position of distribution companies
- EPC Contractors and Performance guarantee
- Other RE financing issues
SECTION- III COMPANY SECTION
Orient Green Power Company Limited
- Background
- Corporate action & remarks
- Operations
- Consolidated Financial Performance
- Share Performance
Mytrah Energy Limited
- Background
- Corporate action & remarks
- Operations
- Background
- Corporate action & remarks
Greenko Group
- Background
- Corporate action & remarks
- Project Portfolio
- Operational Biomass and hydro projects
- Hydro projects under development
- Biomass/Natural Gas projects under development
Bermaco Energy Limited
- Background
- Corporate action & remarks
- Completed projects
- Ongoing projects
SECTION- IV ANNEXURES
- Annexure 1 - Status of RPS & REC regulations of SERCs As On 11.01.2011
- Annexure 2 - Manufacturers Offering Class II and Class III wind turbines
- Annexure 3 - State Level Grid interconnection, metering practices and
charges
- Annexure 4 - MW Scale Grid Solar power plants commissioned in India
- Annexure 5 MSW Energy generation potential and fossil fuel
List of Graphs and Tables
SECTION- I CARE Research's OUTLOOK
Outlook on Indian Renewable Energy Industry
- Base Case
- Best Case
- Funding Requirement for RE Projects in 12th Plan (Rs bn)
- Wind Capacity in India (GW)
- Solar grid parity not too far
- Few States to achieve Grid Parity faster
- Capital Cost break-up of Solar PV based projects under JNNSM
SECTION- II INDUSTRY SECTION
Carbon Financing
- Target reductions of major Kyoto parties & demonstrable progress
- CDM revenues/MW for installed capacity
Wind Energy
- Cumulative capacity addition in top five countries in the last two decades
- Wind Power Re-assessment studies (GW)
- Average Size of WTG installations
- Various State-wide repowering potential
Solar Energy
- Growth in global solar PV installed capacity (GW)
- JNNSM Mission targets
- Project guidelines under JNNSM
- State Solar policies
- JNNSM Phase I-Batch-II
Small Hydro Power (SHP)
- Small Hydro power polices for key states
Biomass/Biogas and cogeneration
- 12th Plan (2012-17) target
- 13th Plan (2018-22) target
- Installed capacity of commissioned Biomass/Cogeneration projects (MW)
Waste to Energy (WtE) generation
- Types of Waste
- WtE Potential in Top ten states
- Per Capita MSW generation (kg/day)
Off-grid Renewable Energy Applications
- Deployment of various renewable energy systems in India
RPO & REC Framework
- RPO achievement and target level
Renewable financing
- Indian Wind Business model comparison
- Options for financing for a wind project
SECTION- III COMPANY SECTION
Orient Green Power Company Limited
- Existing Wind operations
- Capacity Expansion Wind
- Finalized order on wind turbine suppliers
- Existing Biomass operations
- Existing Projects Biomass power plants
- Consolidated Financial Performance
- Share Performance
Azure Power
Mytrah Energy Limited
Greenko Group
- Project portfolio
- Operational projects-Biomass
- Operational projects-Hydro
- Projects under development-hydro and Biomass/natural gas
Bermaco Energy Limited
- Completed Projects
- Ongoing Projects
