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Wind Electricity in India: 1700 MW annually and increasing

Wind Electricity in India: 1700 MW annually and increasing. Ajay Mathur President Suzlon Energy Limited India. Concept Note. Overview. Annual addition of wind energy in India has grown from ~100 MW in the late 1990s to +1000 MW after 2004 Major drivers are:

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Wind Electricity in India: 1700 MW annually and increasing

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  1. Wind Electricity in India: 1700 MW annually and increasing Ajay Mathur President Suzlon Energy Limited India

  2. Concept Note Overview • Annual addition of wind energy in India has grown from ~100 MW in the late 1990s to +1000 MW after 2004 • Major drivers are: • Investment by energy-intensive industries in wind energy to freeze future electricity costs • Cost reductions due to decreases in production and O&M costs, and increased availability • Demand enhancement due to RPS/feed-in tariff requirements, and CDM benefits • Proactive public policy; diversity of investors; and innovative business models are the ingredients of the robust Indian market • Large potential to sustain growth

  3. Wind Energy Development in India Installed wind energy capacity in India is now in excess of 5,000 MW

  4. Sea-coast + Desert areas (Average PLF of 18-20%) Dual Monsoon Forest & Mountainous region (Average PLF of 18-30%) Mountainous, Sea Coast areas (Average PLF of 25-30%) Wind Potential in India

  5. What happened in 2000-04 ? • Investment by energy-intensive industries in wind energy to freeze future electricity costs has been a major driver • Market has also grown because of cost reductions due to: • Indigenization of production; • “End-to-end” business model; and • Better design • RPS/feed-in tariff requirements, and CDM benefits continue to spur demand into the medium term

  6. Wind energy investments enhance global competitiveness Managing energy costs is key to global competitiveness of energy-intensive industries Energy Costs are “frozen” with wind energy investment

  7. Wheeling & Banking FacilitiesEnable Self-Use of Wind Energy • Self use by energy-intensive industries has been enabled by wheeling and banking facilities provided by utilities • Utilities wheel electricity from the (often remote) windfarm to the industry for a charge, and bank unused electricity which can be drawn later at a charge • This has greatly increased the number of investors in wind energy, resulting in enhanced competition and in making the sector more robust due to the diversity in investors

  8. Cost ReductionIndigenization of Production • Suzlon started increasing share of domestic content ever since its started manufacturing • Other manufacturers were forced to indigenize as well for competitive reasons • Government started reducing the number of components on which import duty exemption was available • Almost all components of Suzlon machines are now sourced from India; all the major suppliers now have 40 to 70% domestic content

  9. Cost Reduction“End-to-End” Business Model • Suzlon, apart from manufacturing, marketing and installation, also started investing in: • pre-installation activities (wind mapping, site identification and development, evacuation lines, O&M facilities), and • post-installation activities (O&M services, grid connectivity, realization of payment from utilities) • This is now the mainstream business model • This has: • reduced fragmented costs associated with site development and O&M services, and • enhanced availability due to better O&M services

  10. Cost ReductionBetter Design • Suzlon acquired design centres in Europe to design India-specific designs • Energy generation is higher because of: • Larger rotor swept areas • Taller towers • Better aerodynamic profile of rotor blades • Automatic control and pitching • Better grid connectivity

  11. Renewable Portfolio Standards and Feed-In Tariffs • Electricity Act 2003 requires state Electricity Regulatory Commissions to: • mandate minimum amount of electricity from renewables that must be procured by utilities, and • Establish preferential tariffs for this procurement • Five state Electricity Regulatory Commissions have mandated procurement percentages and tariffs • This has led to increased investments in site development and in manufacturing-capacity enhancement

  12. Supply Percentage and Tariff Fixation

  13. Peep into the Future • Opportunities • Rapid addition of capacity • Global interest in investment • Adequate Potential • Issues • Evacuation of electricity • Integration of infirm power in grid management • National RPS

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