OLIVE EARTH

This first part of the the article series on Wind Energy in India discusses the regulatory environment and the current state of growth of Wind energy in India.

The energy policy for India is characterized by tradeoffs between different drivers like:

• Rapidly growing economy, with increasing household incomes, hence a need for dependable and reliable supply of electricity, gas, and petroleum products as most of the service and manufacturing sector is intricately propelled by energy
• Rapid urbanization leading to urban and regional environmental impacts, necessitating the need for the adoption of cleaner fuels and cleaner technologies
• In fossil fuel centric energy economy, limited domestic reserves of fossil fuels, necessitates import of a vast fraction of the gas, crude oil, and petroleum product requirements, and recently the need to import coal as well severely straining the balance of trade

Given that adoption of cleaner technologies, especially renewable energy, often means that this electricity is expensive for many Indians, particularly in rural areas. Since a large populace is still at an energy divide, such a situation is a hindrance to effectively balance the above parameters while planning and executing on the energy future of India.

Nevertheless, there is a significant potential in India for generation of power from renewable energy sources-, small hydro, biomass, and solar energy. A long coastline, low installation costs and ready local availability of key raw materials have all made India a favourite destination for offshore wind power. Today, India has one of the highest potentials for the effective use of renewable energy. India is the world’s fifth largest producer of wind power after Denmark, Germany, Spain, and the USA. Global majors such as Areva, Siemens and GE queuing up to explore opportunities in the country.  

Background and Policy Environment:

Some of the plociy and regulatory environment driving the development of Wind Energy in India include:

National Mission for Enhanced Energy Efficiency: Building on the Energy Conservation Act 2001, the plan recommends:

• Mandating specific energy consumption decreases in large energy-consuming industries, with a system for companies to trade energy-savings certificates;

• Energy incentives, including reduced taxes on energy-efficient appliances; and

• Financing for public-private partnerships to reduce energy consumption through demand-side management programs in the municipal, buildings and agricultural sectors.

The National Action Plan for Climate Change (NAPCC) also describes other ongoing initiatives, including: 

·         Power Generation: The government is mandating the retirement of inefficient coal-fired power plants and supporting the research and development of IGCC and supercritical technologies.

·         Renewable Energy: Under the Electricity Act 2003 and the National Tariff Policy 2006, the central and the state electricity regulatory commissions must purchase a certain percentage of grid-based power from renewable sources.

·         Energy Efficiency: Under the Energy Conservation Act 2001, large energy-consuming industries are required to undertake energy audits and an energy labeling program for appliances has been introduced.

The Wind power programme in India was initiated towards the end of the Sixth Plan, in 1983-84. A market-oriented strategy was adopted from inception, which has led to the successful commercial development of the technology. The broad based National programme includes wind resource assessment activities; research and development support; implementation of demonstration projects to create awareness and opening up of new sites; involvement of utilities and industry; development of infrastructure capability and capacity for manufacture, installation, operation and maintenance of wind electric generators; and policy support.  The Ministry of New and Renewable Energy is the nodal ministry for development of all renewable forms of energy including wind energy.  Current initiatives are expected to yield savings of 10,000 MW by 2012.  The central government has put in place a set of fiscal and promotional incentives for wind energy that are summarized below:

o   Generation-Based incentives of Rs. 0.50/kWh

o   Concessional import duty on specified wind turbine parts.

o   80%  accelerated depreciation in the first year

o   Excise duty reliefs

o   Loans through IREDA

o   Income Tax holiday applicable to wind power as in the case of   power projects

Current Scenario:

The installed wind power capacity of India is 11807.00 MW as of March 2010. It is expected that by the end of 2012, India's wind power capacity will reach 6,000 MW. Out of the total power capacity installed in India, wind power energy accounts for about 6%. It generates 1.6% of India's total power. According to the estimations of Indian Wind Energy Association, India has the 'on-shore capability to utilize 65,000 MW of wind energy for the generation of electricity. India has a huge amount of unexploited wind resource that can help immensely in the future years to come.

The wind power capacity in India is the maximum in Tamil Nadu. As of March 2010, the state has 4889.765 MW of wind generating capacity. Kethanoor, Gudimangalam, Chittipalayam, Poolavadi, Sunkaramudaku, Kongal Nagaram, Murungappatti, Gomangalam, Anthiur are the places in Tamil Nadu with the maximum wind generating capacity. Next to Tamil Nadu is Maharashtra, which is the 2nd state in India to generate wind power energy.  The Government of Gujarat also banks largely on the wind resources. The state has identified Samana in the Rajkot District as the perfect place for installing 450 turbines, which would generate 360 MW of energy. In order to facilitate the development of wind energy in the state through investments, the Gujarat Government has come up with several incentives, which includes high tariff for wind energy.  The state of Karnataka is also not lagging behind. There are several wind farms in the state. Chitradurga and Gadag are among the districts with the maximum number of windmills.