Aug-Oct'10 Engg.cdr

ARTICLE A CRITICAL ANALYSIS OF GOVERNMENT OF INDIA POLICY TOWARDS WIND POWER DEVELOPMENTS WITH REFERENCE TO WORLD SCENARIO By SHRUTIDHARA SARMA *

R. NATARAJAN **

D.P. KOTHARI ***

* B. Tech Student, Department of Mechanical Engineering, Tezpur University, Tezpur, Assam. ** SMVS, VIT, Vellore, Tamil Nadu. *** Advisor, VIT, Vellore, Tamil Nadu, India.

ABSTRACT Energy use is the basic criterion for the development of a country. India is a vast country and its electricity demand is high. But the per capita consumption is low which reflects its demand shortage and pushes it to a world rank of 156 in electricity utilization. This demand, however, could be met if the available renewable resources had been utilized properly. Sometimes it is thought that India's government policy for wind power is not up to par and India lags behind. If this is the trend, then other countries will surpass India in wind power growth and it will never become a wind superpower. Thus, the aim of this paper is to review India's wind power growth in comparison to other countries of the world. Keywords: Tariff, Subsidy, Incentives, Per Capita Consumption, Tax, Agency. INTRODUCTION

USA, Germany, Spain, and China maintain to keep their

Today the world community is concerned with climate

wind harnessing positions constant (Twidell, Weir & Tailor

change, green house effect and global warming. The

2006). Although China is constantly improving its wind

root cause of this is the heavy use of fossil fuels by modern

production, the literature indicates that Denmark could

civilization. And it is this heavy fossil fuel trend that has all

not generate electricity at an increasing rate but has

the developed nations moving toward the generation of

already done as much as it can. It has saturated its

electricity from non- conventional energy sources [Wind

onshore areas supplying 19.6 % of its total electricity by

Power, 2009 & Wikipedia, 2010].

wind and is also trying to develop advance technologies

India is the world's largest democracy and a developing country. But it has a peak demand shortage of around 14% and an energy deficit of 8.4%. In order to keep pace with this growing demand, India imports 70% of its oil

for off-shore wind farms [Renewable Energy-Market and Policy Trends in IEA Countries, 2008]. Yet, India keeps on sliding down the slippery slope letting other countries surpass it.

which is likely to go up to 85% in the next decade and to

Table 1 shows the wind power growth in the top 6 countries

about 92% by 2020. As a result, India needs to review its

of the world including India.(WEG Installations, 2010, Learn

electrical production from renewable sources of energy

About Wind Power, 2009, Policy Framework and Key

[Kothari, Ranjan & Singhal, 2008]. From the various sources

Incentives for RE Technologies, 2008, Energy Programme

available, wind power is the most viable one, as it can also

in India 2010).

provide surplus electricity to the country. This surplus

The graph (Figure 1) shows the representation of Table 1 in

electricity needs proper government support as well as

graphical form:

public interest. To this end, the private sectors are seen as

Table I shows that growth in China doubled in 2006 and

leading the growth in harnessing the wind, whereas

has kept pace with this trend of more than 100% growth

support from the government is missing.

every year (Lauber 2008). Yet, growth in India in 2006 was

The major wind power producing countries, such as, the

41.5%, and in 2007 was 25% then was reduced to 22% in

i-manager’s Journal on Future Engineering & Technology, Vol. 6 l No. 1 l August - October 2010

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ARTICLE Installed wind capacity(MW)

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

U.S.

China

Germany

Spain

India

Denmark

2578 4275 4685 6372 6725 9149 11575 16824 25237 35159

346 402 469 567 764 1260 2599 5910 12020 25805

6113 8754 11994 14609 16629 18415 20622 22247 23903 25777

2235 3337 4825 6203 8263 10027 11623 15145 16689 19149

1167 1507 1702 2110 3000 4430 6270 7850 9587 10925

2300 2489 2880 3110 3124 3128 3136 3125 3160 3465

Table 1. Wind Power Installations (MW) in top 6 countries of the world

states [The Gazette of India, 2010, Wind Energy, 2010]. · Provision of National Generation Based Incentive (` . 0.5/KWh) over and above existing incentives in 2009.[7] (Wilkins, 2002). · A capital subsidy of 2/3rd the project cost (max. ` . 2.00 crore per 100KW) is born by MNRE. Interest subsidy up to 4% is provided by IREDA for captive power projects of maximum capacity 200KW (Agarwal, 2006). · 2.5% of the ministry's share of project cost goes to the State Nodal Agency. Certain parts of the country viz. The North-Eastern region, hilly areas of Jammu & Kashmir, Himachal Pradesh gets 20% to 50% higher subsidies with respect to other states [The Gazette of India, 2010].

Figure 1. Graph showing Wind Development in top 6 countries of the world (2000-2009)

2008. India was 5th in wind power growth until 2004 then became 4th in 2005 and again became 5th in 2008 (Kishore, 2008). However, in 2008, India was succeeded by China, a country which started producing wind power 4 years later than India did. India's policy for wind power promotion is as follows.

· R&D support up to 100% for government institutions and 50% for private institutions are paid. Foreign firms can also receive subsidy support in certain exceptional cases [Annual Reports of The Ministry, 2009]. These are the policies which promote wind power in India. Below is a graph (Figure 2) that shows year-wise Indian policy versus the installed capacity.

1. Notable Points of Indian Policy

From the graph (Figure 2) it is clear that wind power

· Signing of Clean Development Mechanism (CDM) under Kyoto protocol in 2002 .

installations in India rose from 2003, fell in 2007, rose in 2008 and then came down in 2009. 3rd party sales were

· The Electricity Act 2003 made generation,

allowed under Electricity Act 2003 and The National

distribution and transmission possible at both state

Electricity Policy pressurized the increase share of

and national level for the first time and set

electricity from non-conventional energy sources.

Renewable Portfolio Standards in states (Installed

National Tariff Policy made it obligatory to purchase

Wind Power Capacity, 2010).

renewable energy in a time-bound manner. Again the

Provision for 80% accelerated depreciation for ·

buy-back rates of states were revised for e.g. the previous

wind farms over 1 or 2 years and a 10 year tax

buy-back rate in Tamil Nadu was `.2.7 but later became

exemption for wind power projects and favorable provisions on wheeling, banking and third party sales accompanied by lower customs and excise duties for specified equipment (Pawar, Ekal, 2003). Introduction of feed-in tariffs, generally higher than · the conventional ones, usually amounting to `. 3.10 – `. 4.3 (€5.1 – 7.1 cents) per kWh by 9 Indian

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Figure 2. Indian policy vs. additional installed wind capacity [Wind Power, 2009, India Energy Issues, 2008, Installed Generation Capacity in India, 2010, Renewable Energy, 2009]


ARTICLE `.3.39 (Kothari and Nagrath 2009). Favorable wheeling,

There is no industrial backup so far as fabrication, ·

banking were able to attract investors in wind technology.

maintenance, infrastructure are considered. So,

These changes could have been responsible for the

whereas western countries are setting up plants of

2003-2005 growth. And India became 4th in 2005. But

4-5MW while India could still set only 1-2MW plant

India could not keep up the pace. In spite of the support

only.

from government as mentioned above, the installations

India's tremendous wind energy resource has only ·

decreased and India came down to 5th in 2008. The

been partially realized due to the lack of a

heavy declining nature of the graph proves this. This could

coherent national renewable energy policy.

mean there is something wrong either in the policy or its

Certain states for e.g. the north-eastern region is not

implementation. However, if proper planning is not made

taken into account while estimating the wind

soon, India will once again be on a wind power decline.

potential.

2. Critical Analysis of Govt Policy and Suggestions

Although theoretically the RPS (Renewable Portfolio ·

Below are listed some of the points which figure out the

Standards) and fed-in-tariffs can co-exist, this

faults in India government policy.

needs to be well managed to avoid inefficiencies.

· India first of all, does not have a National

The capital cost of installation has increased ·

Renewable Energy Policy. So, the promotion of

whereas the capacity of installation remains same.

renewable energy is mostly carried out by state

Only 90 out of 642 monitoring stations are ·

governments and therefore incentives, tariffs and

active presently. 250 power plants are already

power purchase agreements differ from state to

closed [World Wind Energy Report 2009].

state [Renewable Energy, 2009].

India is not seriously concerned about the R&D ·

· It does not put obligation on grid operators to

required in wind sector. While Denmark set up Riso in

purchase a fixed amount of renewable electricity

1958, India felt the use of such a centre only in 2005

and penalties for not doing that, like China. Nor it

as a result of which CWET was established.

adds renewable premium to the cost of electricity sold. · The wind energy projects are put up by either private power utilities or for captive consumption. There is no tariff based tender system like China. This puts a hurdle in the large scale development of wind farms at the national level. The local Electricity Boards are facing monetary · loss due to some popular scheme of the state governments. So, they do not come forward to put up new plants for power generation [Class Lecture, July 10, 2010]. The power produced by Independent Power Plants · (IPP) is not evacuated by local Electricity Boards (EB). So, interested individual have to leave in spite of their interest in this field. Local EBs is not doing because they are not having sufficient funds at times reported [Class Lecture, July 10, 2010].

There is no specific system of storing wind · generated electricity. As wind produced electricity is varying so it should be stored and supplied when required later. Public awareness drive by government is lacking. · Publicity through media and seminar is poor. There are no agencies collecting micro-survey. · It can be stated that India's journey to wind power development flourished in bureaucratic field rather than technical from 1981 to 2006 i.e. from the year of creation of “Commission for Additional Source of Energy” (CASE) to “Ministry of New and Renewable Energy” (MNRE). Because during this period it was able to generate only 6270 MW against a total wind energy potential of 45 GW (updated to 48.5 later on) by CWET. That means India government has given less emphasis in technical field in utilizing a huge source of energy. A few points are forwarded as suggestion so as to make India attain the position it


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ARTICLE deserves [Annual Reports of The Ministry, 2009, The

care must be taken so that it does not get subsidies

Gazette of India, 2010, Wind Energy, 2009 ].

lesser than the conventional ones when the hidden

· Introduction of clear, stable and long term support policies designed carefully so as to operate in

wheeling facility should be permitted.

harmony with existing state level mechanisms and

Conclusion

not to lessen their effectiveness (Kothari, Rajan and

While the world community is concerned with climate

Singhal 2008).

change, green house effect and global warming; the

· Scheme must be enforceable through the

harnessing and use of wind power is a major factor for any

introduction of a national verification mechanism

country's economic development. And even though the

to ensure that all states comply with the national

technological and economic planning factor of the use

portfolio standards and face penalties if they do

of wind projects reduce conventional projects by half;

not.

they also reduce the heavy load on our use of fossil fuels,

· Updated wind resource map of India to estimate

as they use a non-conventional energy source that make

actual wind energy potential based on up to date

it more environmentally friendly. To this end, as we harness

information, land availability, mast height of

and use wind power India has the means to become a

modern turbines, technological improvements

wind super-power that will allow the country to move

etc. This will continue to grow with government

forward in its quest for higher economic development.

funding.

Acknowledgements

· Procedures for approving wind energy projects

The authors gratefully acknowledge the Indian Academy

must get accelerated in order to save both time

of Sciences (C.V. Raman Avenue, Bangalore) for the

and money spent on getting clearance from

assistance and facilities offered to carry out this work.

authorities.

References

· Improvement of financing for projects ensuring fair

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· Research and development policies are required that support development of new and improved technologies. Like CWET, other R&D centers should be established in various parts of the country. Because of CWET, Tamil Nadu is the no.1 producer of wind energy and adjacent states are also benefited. India being a vast country, climates of different places are different. If R&D centers are established in Assam or Rajasthan where climate is

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ABOUT THE AUTHORS Miss Shrutidhara Sarma is presently a Student of B.Tech in the Department of Mechanical Engineering, 5th semester in Tezpur University. She did summer internship for two months under the Indian Academy of Sciences, Bangalore having Prof. D.P. Kothari and Prof. R. Natarajan as guides.

Dr. R. Natarajan is presently working as a Professor at Energy Centre, SMBS in VIT University, Vellore, Tamil Nadu. He received his BE (Chem) from Annamalai University in 1967 and M.Tech (Petrolium and Refinery Engineering and Petrochemicals) from IIT Kharagpur in 1969. He joined the Indian Space Research Organization (ISRO) in 1969 and was in charge for the development of processes for the production of liquid propellants and later was heading the division “Project engineering and productionization facility”. He executed various projects like Solar Dish Stirling Engine 10 kWe, Biomass Gasification Power plant 100 kWe, Storage and dispensing of hydrogen using metal hydride – water system, Use of used vegetable oils and SVO in duel fuel engine along with producer gas etc. He received the National Research and Development Council (NRDC), Government of India, award in 1986. He is also the international patent receiver for “Hydrogen storage and dispensing system using metal hydride with new dispensing concept in India and USA”. Prof. D.P. Kothari is currently the Director General of Vindhya Group of Institutions, Indore. Prior to this he served as the Vice Chancellor of VIT University, Vellore, Tamil Nadu. He is the recipient of UGC National Swami Pranavananda Saraswati Award, National Khosla Lifetime achievement Award, National Award for Science and Technology. He also served as Director i/c, IIT, Delhi [2005], Deputy Director [Administration], IIT, Delhi [2003-06], Principal, Visvesvaryaya Regional Engineering College, Nagpur [1997-98], Head, Centre for Energy Studies, IIT, Delhi [1995-97]. He was visiting professor at Royal Melbourne Institute of Technology, Melbourne, Australia in 1982-83 and 1989 for two years. He was NSF Fellow at Purdue University, USA in 1992. He is a Fellow of the Indian National Academy of Engineering [FNAE], Indian National Academy of Sciences [FNASc], Institution of Engineers [FIE] and senior member, IEEE. He has published 625 research papers, guided 27 PhDs, 60 M.Techs', authored 20 books in Power Systems and other allied areas. His fields of specialization are Optimal Hydro-thermal Scheduling, Unit Commitment, Maintenance Scheduling, Energy Conservation and Power Quality and Energy Systems Planning and Modelling.


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