1
OPET ANNUAL GENERAL MEETING
Mariehamn 13. - 14. 9. 1999
Technical session: EXPORT MARKETS FOR RENEWABLE ENERGY
Export Markets for Wind Power in India
Matti Heikkilä, STE BESEL
Group leader Guillermo J. Escobar
BACKGROUND
Industrial development in India has
resulted to a severe power shortage
Blackouts both within industry and households
80 000 villages without electric power
An obstacle for continuing economic development
Renewable energy forms are gaining growing interest
Installed renewable capacity today 1350 MW, out of this 80% is wind
In wind power, India is one of the five 1000MW club members
Germany 3200 MW, USA 2500 MW, Denmark 1600 MW,
Spain 1100 MW, India 1000 MW (as end of June 1999)
Distribution of installed power by states /3/
STATE
MW
Tamil Nadu
Gujarat
Andhra Pradesh
Karnataka
Madhya Pradesh
Maharashtra
Kerala
Orissa
707
167
56
17
12
6
2
1
Total
968
2
INDIA, installed capacity, MW per year
(BTM Consult 1999)
400
350
300
250
200
150
100
50
0
1993
1994
1995
1996
1997
1998
The history of Indian wind power development
Dramatic rise in 1993 - 1995
Declining 1996 - 1998
New rise started 1999
Reasons for the decline:
*too fast start
*weak players wanting quick returns
*bad technical quality
*lack of standards
*lagging legislation
*unprepared electric utilities
*poor public informing
The result was:
1999
2000
2001
3
No acceptance gained
Utilities were reluctant
Public incentives diminished
Financing became uncertain
Governments changed - more uncertainty
Investors withdrew
However, new start was considered as indispensable
Now, wind power market is having its second start
Today, less than 1% is wind. The national goal is 5% by the year 2020 (5000 MW
more wind)
Ministry of Non-Conventional Energy Sources (MNES) main player:
Wind development programs (200 to 300 MW per year), areal studies, technical
surveillance, contacts with local authorities, master plans to develope known windy
regions
Indian Renewable Energy Development Agency IREDA:
Project and equipment financing up to 85 %,
$ 187 million budgeted
Finances projects with favourable interest loans
Market liberalization:
projects partly state owned, partly private
For private sector 100% depriciation in the first year
Additional incentives if projects support rural or social development programs
(more jobs, more economic activities for remote areas)
Example: Maharashtra, central west India:
official target 100 MW by March 2000
Grid reinforcements
Tax reductions for 6 years
Near term potential 500 MW in four specific locations
Production costs:
4
Wind
Diesel
Coal
0.035 - 0.045
euro/kWh
0.055
euro/kWh
0.038
euro/kWh
Feed in tariff 0.05 - 0.06 euro/kWh in several
states of India
All major western turbine manufacturers are present in India,
and have their share of the market
Open competitive market
Local participation preferred
Joint ventures, technology transfer, local subcontracting, local entrepreneuring
June 1998: cyclone in the county of
Gujarat hit three wind farms
Wind speeds up to 70 m/s
Out of the 315 turbines at the site
129 were destroyed totalling 30 MW
Damage to other civil constructions were similar - 3000 human victims
EMERGING WIND POWER MARKET IN CHINA
Theoretical wind power resources huge,
250 000 MW
Today 220 MW, since 1995 growth rate
50% per annum
National goal: 1000 MW by the end of 2000
(not quite realistic)
Problems for IPP:s in grid accession
and end use financing
Two joint ventures: one with German Nordex Balcke Dürr, the other with Spanish
MADE Renewable Energy, to produce locally wind turbines up to 600 kW in unit size
China is serious and ambitious in renewables:
Wind power is in Government´s priority list
for foreign investments
5
In this huge economic environment small openings give big possibilities
Example: 24 MW plant, three Chinese investors and NUON, Netherlands
CONCLUSIONS
State programs
Legal framework
Financing instruments
Economic incentives
Local acceptance
(administrative, private)
All the bits and pieces
are there - go Far East
Sources:
/1/ World Market Update 1998, BTM Consult, March 1999
/2/ Windpower Monthly, second half of 1998, first half of 1999
/3/ Renewable Energy World, James X James, Vol 2 No 3