Renewable Energy Technologies
The importance of the increasing role of renewable energy sources in the overall
energy scenario in India was recognized in the early 1970s. During the past
30 years, significant efforts have gone into the design, development, field
demonstration and large-scale use of a number of renewable energy products and
systems. Today, India has among the world's largest programme for deployment
of renewable energy products and systems. It is also the only country in the
world to have a separate Ministry for Non-conventional Energy Sources. The Indian
Renewable Energy Development Agency (IREDA) is the only agency of it's kind
in the world to finance renewable energy projects.
India has a large potential for renewable energy (RE), an estimated aggregate
of over 100,000MW. In addition, the scope for generating power and thermal applications
using solar energy is huge. However, only a fraction of the aggregate potential
in renewables, and particularly solar energy, has been utilized so far.
Our activities cover all major renewable energy sources of interest to us as
biogas, improved cooking stoves, biomass, solar energy, wind energy, small hydro
power, energy recovery from wastes and other new and emerging technologies.
About 6,400 MW (as of March 31, 2005) of renewable power generation capacity has been set up in the
country. Wind power generation alone accounts for 3595 MW of energy, small hydro
projects for another 1,705 MW and Biomass , 750 MW. More than 80,000 stand alone
PV systems aggregating to about 47 MW have been installed in the country so
far. Three million families are covered under the biogas programme and 33 million
improved cooking stoves have been deployed. It is estimated that some 5,000
entrepreneurs are involved in the biogas programme and 10,000 self-employed
workers are involved in the improved cooking stove programmes.
In 1992 the Ministry of Non-conventional Energy Sources (MNEs) announced a new
strategy and action plan to replace subsidy-driven programmes with commercialization.
Financial incentives were trimmed and fiscal incentives, such as concessional
tax rates, along with soft loans, were introduced to encourage enterprise. Several
renewable energy technologies (RETs) such as wind, solar thermal, solar photovoltaics
(SPV) and small hydro (SHP) are now promoted on a commercial scale. Today India
has the largest decentralized solar energy programme, the second largest biogas
and improved stove programmes, and the fifth largest wind power programme in
the world. A substantial manufacturing base has been created in a variety of
RETs, placing India in a position not only to export technologies but also to
offer technical expertise to other countries.
Business Opportunities
India has become a land of opportunity for investors in renewable energy technologies
(RETs). Today we are in a position to provide consultancy services, transfer
technologies, set up manufacturing plants and projects on turnkey basis and
organise programmes in other countries. We are also looking for cooperation
with other countries and organizations in renewable energy and new investments
in these environment friendly technologies. Both Indian and foreign investors
can contribute to technology development, manufacture and export of various
RE systems and devices. Some of the specific areas of such joint collaborations
include:
Technology Import or Collaboration for:
· Manufacturing low-cost solar photovoltaic cells/modules · Processing and constructing
treatment plants for municipal solid waste using technologies that can recover
resources and energy - high efficiency biomethanation, pelletisation, gasification,
incineration and landfill.
· Advanced technologies for treatment of, and energy recovery from, industrial
effluents and sewage wastewater.
· Fluidised bed biomass gasifiers using a variety of biomass for electrical,
mechanical and thermal applications.
· Fuel cells and electric vehicles.
Requirement for specialised entrepreneurs to provide services for RE projects
on a short-/long term contract for:
· Marketing and Sales · After Sales service
· Operation and maintenance
· Renovation and modernization
· Managerial expertise
Opportunities for enhancing manufacturing capacity of different end-use applications
of RETs through:
· Low-cost, proven RE devices and systems produced on a mass scale · Biomass
gasifiers for providing electricity and as prime mover in rural areas
· Small capacity wind electric generators
· Standard SPV power packs for supply of electricity in private buildings
· Stand-alone systems and hybrid systems.
Existing Capabilities
With a strong industrial base and successful commercialization of technologies
in wind, SPV, solar, thermal, small hydel, biogas and improved biomass stoves,
India is in a position today to offer "state-of-the-art" technology to other
developing countries and play a leading role in the global movement towards
sustainable energy development. Lets take a look at some of the major areas
where opportunities for joint collaborations and investments are available.
POWER GENERATION TECHNOLOGIES
Wind Power
Small Hydro Power
Biomass Power : Cogeneration & Gasifiers
Energy from Wastes
Solar Photovoltaics
Solar Thermal
Biogas
Integrated Rural Energy Programme
Policies for Small Scale Industries
Wind
Power
India is the fifth largest wind power producer in the world after Germany, the
USA, Denmark and the UK, with a wind power generation capacity of 3,595 MW. The wing potential in India
has been estimated at 45, 000 MW. The states with high wind power potential
are Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh and Maharashtra.
Almost 6.5 billion units of electricity have been fed to various state grids
from wind power projects. Almost 80% of the power thus generated has been used
for captive consumption, and the rest sold to the grid or to a third party.
Investment opportunities are available for
· Corporate users of power
· Long-term investors in power
· promoters of clean power
· potential pollution traders
Opportunities exist for Indian companies for joint ventures in the production
and services related to wind electric equipment
· Investment in generation of power · As developers / project promoters
· consultancy
· O&M
· monitoring and inspection
Opportunities also exist for export of wind related services such as:
· consultancy · wind resource assessment
· formulation of policies
· project planning
Policy Measures and Incentives
The policy framework and incentives offered are:
· Fiscal and financial incentives
· Wheeling, banking, Third party sale, Buy-back facility by State Electricity
Boards (SEBs)
· Capital subsidies and sales tax incentives in certain states
· Soft loans from the Indian Renewable Energy Development Agency Ltd. (IREDA)
Fiscal and Promotional Incentives from Central Government
The following fiscal and promotional incentives are available from the Central
Government.
· Concessional import duty on specified wind turbine parts
· 80 percent accelerated depreciation
· Customs and Excise duty relief
· Loans through IREDA
· Tax holiday for power generation projects
Small
Hydro Power
The focus of the Small Hydro Power (SHP) is on promoting commercialization and
active private sector participation. An estimated potential of about 15,000
MW of SHP exists in India at the moment. The Ministry of Non-Conventional Energy
Sources (MNES) currently has a database of 4,233 potential sites with an aggregate
capacity of 10,071 MW for projects upto 25 MW. Keeping in view of the policy
of the Government of India to encourage private participation in the field of
power generation, the thrust of the SHP programme is to set up commercial SHP
projects. All the states have suitable policies in this direction, to be achieved
through.
Investment Opportunities
Business opportunities exist in:
· Industry based R&D
· renovation and modernization of old SHP projects
· Development and upgradation of gharats. The scheme is being operated through
local organizations such as the Water Mills Association, cooperative societies,
registered NGOs, local bodies and SNAs.
· Setting up of portable micro-hydel sets up to 25 KW capacity.
· Implementation of the UNDP-GEF Hilly Hydro project on optimising development
of small hydro resources in Himalayan regions of the country. Twenty demonstration
projects based on commercially viable and environmentally friendly sound technologies
will be set up.
Fiscal and Promotional Incentives
The facilities available in the states include wheeling,banking, attractive
buy-back rate and facility for third party sale among others. In order to accelerate
development of SHP power in the country, MNES are providing incentives for :
· Detailed project report preparation-from Rs. 1.25 lakh per MW up to Rs. 5 lakh (above 10 MW and up to 25 MW)
· Under special incentives for the North east region and Sikkim, capital grant
of Rs. 7.5 crore per MW is available for SHP projects in the region. The maximum
support per project is Rs. 22.5 crores.
· Financial support for renovation, modernization and capacity up-rating of
old SHP stations-upto Rs. 2.6 crore per MW or 75% of the R&M cost, whichever is
lower.
· Financial support for development/upgradation of water mills: upto Rs.30,000 per MW
or 75% of project cost, in mechaincal mode and Rs. 1,00,000 or 75% of project cost
in electrical /electrical plus mechanical mode.
· IREDA provides soft loans under MNES for setting up of SHP projects upto 25
MW capacity in the commercial sector.
Biomass
Power : Cogeneration & Gasifiers
Currently, biomass contributes 14% of the total energy supply worldwide and
38% of this energy is consumed in developing countries, predominantly in the
rural and traditional sectors of the economy. The various applications of biomass
energy include thermal or heat, mechanical water pumping for irrigation and
power generation including village electrification and industrial applications.
Investment Opportunities
The following investment opportunities are open to investors in biomass power
and cogeneration technologies:
· Joint Venture: A foreign investor can enter into a joint venture not only
for manufacturing RE devices/products but also for manufacturing RE-based power
generation projects on Build, Own and Operate (BOO) basis. Investors would be
required to enter into a power purchase agreement with the concerned state.
· R&D Initiatives and thrust areas for technology development: MNES support
R&D initiatives and has identified them as thrust areas for technology development
by investors and technical institutions:
· High pressure boilers and new turbine configurationsScience and technology
initiatives
· Development of process systems and equipment for enhancement and optimization
of power generation.
· Development of cost effective biomass handling, storage and drying systems.
· Feasibility of blending or co-firing of mix of biomass materials or with fossil
fuels.
· Installation and evaluation of Pilot Dendrothermal Power Plants
· Indigenous technology development / adaptation for advanced biomass gasification
involving gas turbines in the combined cycle mode
· A joint/coordinated R&D project on advanced biomass gasification has been
approved to be implemented by IISc Bangalore; IIT Chennai; IICT Hyderabad; and
BHEL, Tiruchirapalli aiming at advancement of technology for generating power
from biomass.
· A project on strategic development of bio-energy has been initiated at IISc
Bangalore, aiming at development of gasifiers of higher power levels.
Policy Measures and Incentives
Promotion of biomass-based power generation is being encouraged through enactment
of favorable policy regimes at the state as well as the Central levels. The
state policies include Buy-back/Wheeling/Banking of generated electricity by
the SEBs; incentives in the form of sales tax exemptions, participation in equity
and grants etc.
Fiscal and Financial Incentives
· Interest subsidy for commercial biomass power projects.
· Upto 3% interest subsidy for biomass/bagasse cogeneration (commercial projects)
· Capital subsidy for Cogeneration projects in Joint Venture model/IPP mode
in cooperative/public sector sugar mills; upto Rs.45 lakhs/MW (Max Rs.8.10 crore
per project)
· Capital subsidy for cogeneration projects in cooperative/public sector sugar
mills through JV companies to be set up by state governments or IPP mode projects;
for JV companies in only four states and four IPP projects (on first-come-first-serve
basis).
· Financial assistance under the National Biomass Resource Assessment Programme
(NBRAP): upto Rs.1.50 lakh per study. Financial assistance upto 90% of the cost,
or Rs.1.50 lakh per study, whichever is lower will be provided to state nodal
agencies.
Energy
from Wastes
Urban, municipal and industrial wastes have high potential for energy extraction
to the tune of 1,700 MW, comprising 1,000 MW of power from urban and municipal
wastes and about 700 MW from industrial waste. India has two programmes for
recovery of energy from urban and industrial wastes:
· The National Programme on Energy Recovery from Urban, Municipal and Industrial
Wastes.
· The UNDP-GEF Project on Development of High Rate Biomethanation Processes.
Investment Opportunities
Corporate bodies and large industrial groups must join hands with R&D institutions
and further develop these fully matured technologies.
Eligible Waste-to-Energy Projects
· Projects based on any waste or a mix of waste material of renewable nature
available from urban, municipal and industrial sectors, other than husk, bagasse,
straw, stalks, and fines of biomass origin.
· Projects based on a mix of other renewable wastes from urban and industrial
sectors including husk and bagasse.
· Projects for production of biogas from distillery effluents are not eligible
under this programme. However projects for power generation from biogas being
produced from industrial waste, including distillery effluents shall be eligible.
· Projects for generation of power from biogas, produced from urban, and industrial
wastes through biogas engines, biogas turbines, dual fuel engines using diesel
oil upto a maximum of 5% as pilot fuel and steam turbines with a minimum steam
pressure of 48kg/cm2 shall be eligible.
Technologies
Projects based in conversion technologies namely, biomethanation, pelletisation,
gasification, pyrolysis, incineration, sanitary landfilling etc. or a combination
of thereof.
Policy Measures and Incentives
Support from the State Government
State Governments of UP, MP, Tamil Nadu, Andhra Pradesh, Maharashtra, Haryana
and Karnataka have announced policy measures pertaining to allotment of land,
supply of garbage and facilities for evacuation, sale and purchase of power
to encourage setting up of waste-to-energy projects.
Fiscal and Financial Assistance
Commercial Projects
Financial assistance as interest subsidy for reducing the rate of interest to
7.5%, capitalized with an annual discount of 12% shall be paid to Financial
Institutions (FIs) or Lead FI of the project.
Demonstration Project
Financial assistance of upto 50% of capital cost of the project limited to RS.300
crore per MW for innovative demonstration projects for generation of power from
municipal solid waste and for selected industrial waste.
Power Generation at Sewage Treatment Plants
Financial assistance of upto 50% of the incremental cost for generation of power
from biogas.
Solar
Photovoltaics
India receives about 300 clear sunny days in a year. This is equal to over 5,000
trillion k Wh/year which is far more than the total energy consumption of this
country in a year. SPV systems have found applications in households, agriculture,
telecommunications, defence and railways others. The all India SPV programme
to develop cost effective technology and its applications for large scale diffusion
in different sectors especially in rural and remote areas is under implementation
by MNES.
Investment Opportunities
Investment opportunities exist in all the major thrust areas. These include:
Materials & Devices
· Development of crystalline silicon thin film layers and low cost substrates
for deposition of films.
· Development of large size solar cells/modules based on crystalline silicon
thin films.
· Development of multi-junction amorphous silicon solar cells/modules; pilot
plant demonstration.
· Development of process technology for polycrystalline thin film solar cells/module;
pilot plant demonstration.
· Development of devices based on new materials/concepts.
· Improvement in solar cell efficiency to 14-15% at commercial level and >20%
at research level.
· Improvements in PV module technology, higher packing density, suitability
for solar roofs etc.
· Development of light weight modules for use in solar lanterns and similar
applications.
· Grid Interactive SPV power projects of 500kW capacity
· Joint Ventures with global PV manufacturers.
· Setting up plants as 100% EOUs.
· Technology transfer for PV modules especially based on thin film materials.
Policy Measures and Incentives
Joint Ventures
A number of companies have entered into JVs with leading global PV manufacturers.
There are no specific conditions laid down by MNES for the formation of Joint
Ventures. General conditions laid down by the Ministry of Industry, Secretariat
for Industrial Approvals and the RBI are applicable for this sector.
Export Oriented Units
It is possible to set up a manufacturing plant as a 100% EOU. Generally, these
are permitted duty-free import of raw materials and components. They are also
eligible to sell upto 20% of their production in domestic markets.
Technology Transfer
Indian PV industry is seeking technology for the manufacture of PV modules especially
based on thin film materials, and is able to offer technology for the manufacture
of silicon solar cells, PV modules and PV systems.
Technology Development
R&D projects are supported by the government at Central and State government
research organizations, autonomous societies, universities, recognized colleges,
IITs, industries and NGOs.
Financial Assistance
· MNES financial incentives for solar PV grid connected power projects.
· IREDA financial package for solar photovoltaic (power generation systems)
· MNES Financial Incentives for Solar Photovoltaic Systems
Solar
Thermal
Our major highlight, the first in India and amongst the largest in the world,
is the 140 MW integrated Solar Combined Cycle (ISCC) with a solar thermal component
of 35 MW power project at Mathiana near Jodhpur in Rajasthan is under execution.
Also widely employed by in India are non-grid thermal technologies, solar water
heating, solar cookers, solar air heating, and, solar thermal building design.
Policies and Incentives
Incentives for Solar Water Heating
· IREDA sanctions soft loans under the Interest Subsidy Scheme of MNES (valid
upto March 31, 2002)
· Loans have been sanctioned for 18 such projects
· The upper limit of loans to be extended is 85%
· IREDA has also appointed financial intermediaries who can provide soft loans
for systems of any capacity.
· Many state governments are also pursuing this programme by offering various
incentives
Incentives for Solar Cookers
· Financial support is provided to SNAs for promotional activities such as publicity,
cooking demonstrations, competitors, training, development of marketing network
etc.
· Incentives offered in two new concepts: "solar food restaurants" set up by
nodal agencies in prime locations, and SEWs (self employed women) who could
earn living by repairing and servicing solar cookers.
· Under the loan schemes being operated through IREDA and some commercial banks,
interest free loans are given to purchase solar cookers.
· In order to encourage SNAs to take up large scale promotion of solar cookers
in their respective states, MNES has instituted an annual award for the best
performance.
Biogas
The main programmes under the Thermal and Rural Energy in India are Biogas,
Improved Chulahs (cookstoves) and The Intergrated Rural Energy System (IREP).
As of December 2004, a cumulative total of 3.67 million biogas plants had
been set up against an estimated potential of 12 million biogas plants.
Investment Opportunities exist in:
· Manufacture of biogas burners
· Manufacture of high quality biogas lamos
· Production of dual-fuel and biogas engines
Incentives for Biogas
· Special incentives are available for turnkey entrepreneurs in rural areas
to carry out biogas installation and maintenance as a commercial venture. Over
500 entrepreneurs are currently operating.
· Besides dedicated nodal departments and nodal agencies, Central agencies such
as the Khadi and Village Industries Commission (KVIC) also promote NPBD. National
and regional level NGOs are also involved.
· Commercial and cooperative banks provide loans for setting up of biogas plants
under Agricultural Priority Area.
· NABARD is providing the facility of automatic refinancing to banks.
· Turn key job free is given to entrepreneurs, service charges is provided to
SNDs/SNAs for training and publicity are also supported.
· There are Biogas Development and Training Centres functioning in nine major
states, to provide technical and training backup to SNDs and SNAs. Investment
Opportunities in Energy Efficient Wood Burning Cookstoves: · Manufacture of
portable metallic chulhas
· Manufacture of various chulha components
· Maintenance and services
· Training
Policies and Incentives
· Central subsidy to users
· Renumeration to SEWs
· Dealership support to Fair Price Shops (FPS) and Public Distribution System
(PDS) outlets
· Organizational and infrastructure support to implementing agencies
· Publicity support
· Technical back-up Units (TBUs) functioning in 13 states provide technical
and training support for effective implementation.
Incentives
available in the Integrated Rural Energy Programme
Financial support for IREP has two components:
· Central Sector Component The Centrally sponsired scheme provides grants-in-aid
for professionals and supporting staff in the IREP project cells at the state
and block levels, training of the staff and extension work.
· State Sector Component
State sector outlays are utilized for the implementation of IREP block energy
plans and projects including funding of demonstration activities, financial
incentives for various energy devices, extension and other related activities
and mobilization of resources from other schemes and programmes for energy and
rural development in the IREP blocks. Besides solar, wind and biomass, there
are other eco-friendly and renewable sources from which energy can be tapped
for varied applications in India. These are:
· Chemical Sources of Energy-Fuel Cells · Hydrogen Energy
· Alternative fuel for Surface Transportation - Electric Vehicles
· Geothermal Energy
· Ocean and Tidal Energy Looking at the importance of RETs in India, a systematic
effort to develop and disseminate different types of renewables has been made.
A comprehensive RE policy for all round development of the sector, encompassing
all key aspects, has been formulated by MNES. Policy measures aim at all overall
development and promotion of RETs and applications. Policy initiatives encourage
private as well as FDI including provision of fiscal and financial incentives
for a wide range of RE programmes.
Foreign Investment Policy
· Foreign investors can enter into a joint venture with an Indian partner for
financial and /or technical collaboration and for setting up of RE based power
generation projects
· Proposals for up to 74% foreign equity participation in a joint venture qualifies
for automatic approval
· Hundred per cent foreign investment as equity is permissible with the approval
of the Foreign Investment Promotion Board (FIPB)
· Foreign investors can also set up a liaison office in India
· The Government if India also encourages foreign investors to set up RE based
power generation projects in BOO basis. Various Chambers of Commerce and Industry
Associations in India provide guidance to the investors in finding appropriate
partners.
Industrial Policy
· MNES is promoting medium, small , mini and micro enterprises for manufacturing
various types if RE systems and devices.
· Industrial clearances are not required for setting up of an RE industry.
· No clearance is required from the Central Electricity Authority (CEA) for
power generation projects up to Rs.1,000 million
· A 5 year tax holiday is allowed for RE power generation projects
· Soft loans are available through IREDA for RE equipment manufacturing
· Facilities for promotion of Export-oriented Units (EOUs) are available for
the RE industry.
· Import of power projects are allowed
· Private sector companies can set up enterprises to operate as licensee or
generating companies · Customs duty concession is available for RE spares and
equipment, including those for machinery required for renovation and modernization
of power plants.
Policies
for Small Scale Industries
· An industrial undertaking is defined as a small scale unit if the investment
in fixed assests in plant and machinery does not exceed Rs.10 million
· SSIs are not permitted more than 24% equity in its paid up capital from any
industrial undertaking, foreign or domestic.
· SSIs can get registered with the Directorate of Industries or Direct Industries
Centre in the state government concerned
· SSIs are free to manufacture any item including those notified as exclusively
for the small scale sector. · SSIs are free from locational restrictions which
are mandatory for large industries.
Today, the incentives for investing in RETs, Renewable Energy Technologies are
many. The MNES provides financial incentives such as interest and capital subsidy,
soft loans through IREDA and other nationalized banks and financial institutions.
The government also provides various fiscal incentives for the RE sector which
include Direct Taxes-100% depreciation on the first year of the installation
of the project, exemption /reduction in excise duty and exemption from Central
Sales Tax, and customers duty concessions on the import of material, components
and equipment used in RE projects.
Increasingly, RETs are emerging as attractive, and sometimes the only option
to provide light and power to non-electrified areas which are too remote for
grid electrification. Moreover, with increased international concerns to reduce
greenhouse gas (GHG) emissions, developed countries seek to meet their commitments
under the Kyoto Protocol by switching to RE and investing in this area in developing
countries.
This special report is significant in this context as it provides information
about major technical and commercial developments in this country in this sector
and relevant government policies and programmes on renewable energy.
