An overview of Indian power sector & Economics of Wind mill in Tamil Nadu

Chairman

Mr.K.SekarMembers Presented by

Dr.T.R.Shanmugam G.V.VenkateshDr.C.Chinnusamy

Energy is a major input for overall socio-economic

development of any society.

Development of a country is highly correlated to per capita

energy consumption.

Increasing population, modern civilization and technological

advances contribute to increased consumption of energy.

Most of our energy demands are met by burning fossil fuels,

which is accelerating global warming resulting to Increasing sea

levels, Floods, Droughts, Earthquakes, etc.

Introduction

The prices of the fossil fuels steeply increasing ,So renewable

energy are expected to play a key role.

Wind energy is the fastest growing renewable energy.

Wind turbines are up to the task of producing serious amounts of

electricity.

Wind energy has started making meaningful contributions to the

overall power requirements of some States.

Turbines vary in size from small 10 kW structures to large machines

rated at 2 MW or more.

Cont..

Objectives

• To study the world, India and Tamil Nadu

wind energy scenario.

• To identify the demand and supply of power

consumption in Tamil Nadu

• To evaluate the financial analysis of wind mill

in Tamil Nadu.

Tools used for analysis

• Percentage analysis • Financial investment analysis

NPV B-C Ratio IRR Break-even analysis

Worldwide Wind Power Installed Capacity (As on 30th June 2010)

(Source :  Wind Power Monthly, October’2010)

S . No Country Capacity(MW)

1 USA 36693

2 Germany 26386

3 China 25705

4 Spain 19824

5 India 11952

6 Others 45639

Total 166199

Worldwide Wind Power Installed

22%

16%15%12%

7% 27%

Capacity(MW)

USAGermanyChinaSpainIndiaOthers

Total Installed Capacity : 166199 MW

(Source :  Wind Power Monthly, October’2010)

(Source : MNRE)

Wind Power Density in India

India State Wise Installed Capacity as on 31.03.2010

S.No State Capacity in MW

1 Tamil Nadu 4906.74

2 Karnataka 1472.75

3 Maharashtra 2077.70

4 Rajasthan 1088.37

5 Andhra Pradesh 136.05

6 Madhya Pradesh 229.39

7 Kerala 27.75

8 Gujarat 1863.64

9 West Bengal 1.10

10 Others 3.20

  Total 11806.69

(Source: indianwindpower.com)

India State Wise Installed Capacity as on 31.03.2010

41.6

17.615.8

12.5

9.2

(Source: indianwindpower.com)

42%

18%16%

12%

9% 3%

Capacity in %

Tamil NaduMaharashtraGujaratKarnatakaRajasthanOthers

Total Installed Capacity : 11806.69 MW

Growth of Installed Capacity  as on 31.03.2010

41.6

17.615.8

12.5

9.2

(Source: indianwindpower.com)

up to m

ar2005

2005-06

2006-07

2007-08

2008-09

2009-10

total

capac

ity0

2000

4000

6000

8000

10000

12000

3593

.5

1748

.16

1778

.26

1584

.255

1484

.005

1564

.65

11806.69

India

India

MW

State-wise Unit Generation Data (kWh) (As on 31st March 2010)

Sl.

StateYear-wise Generation (Million Units) Cum

No.   UpTo 05 2005-06 2006-07 2007-08 2008-09 2009-10

Generation(MUs)

1Andhra Pradesh

721 79 111 101 333 106 1451

2 Gujarat 1332 286 455 851 2104 2988 8016

3 Karnataka 1409 935 1397 1840 1723 2687 9991

4 Kerala 47 0 0 0 0 63 110

5Madhya Pradesh

300 30 70 69 3 82 554

6 Maharashtra 2650 790 1714 1804 2207 2625 11790

7 Rajasthan 494 427 532 682 758 1045 3938

8 Tamil Nadu 11970 3444 5268 6066 6206 8146 41100

TOTAL 18923 5991 9547 11413 13334 17742 76950

(Source : MNRE)

Unit Generation Data (kWh)

(Source : MNRE)Up T

o 05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

Gener

ation

0

10000

20000

30000

40000

50000

60000

70000

80000

1892

3

5991 95

47

1141

3

1333

4

1774

2

7695

0

1197

0

3444

5268

6066

6206 81

46

411

00

IndiaTamil Nadu M

W

(As on 31st March 2010)

Wind generation is the fastest growing energy source in

this decade , expanding at 25% a year.

Tamil Nadu is a pioneer State among all the states in

India in promoting Wind Energy programme. Tamil

nadu contribution is around 42 % of the country’s

installed wind power capacity.

Tamil Nadu is blessed with conducive natural

meteorological and topographical settings for wind

power generation.

Tamil nadu Scenario

Total Power Generation Capacity (MW) (As on 31st March 2010)

36%

18%

7%2%

1%

88%

10% 2%

Tamil nadu

State SectorCentral SectorPrivate SectorExternal AssistanceOtherWind MillsCo-GenerationBio-mass

Total Generation Capacity :15800.315 MW

(Source : TNEB)

Peak Demand Met and Unrestricted Demand (MW)

Duration -Quarter

Peak Demand

MetUnrestricted

Demand Short Short

(%)

Apr-jun 2009 9730.00 10089.67 359.67 3.56

Jul-sep 2009 9386.67 9498.33 111.67 1.18

Oct-dec 2009 9133.67 9402.67 269.00 2.86

Jan-mar 2010 9851.67 10320.00 468.33 4.54

(Source:SRLDC)

Energy availability &Requirement(MU)

Duration -

QuarterEnergy met

Avg/Day

Requirement

Avg/Day Short Short

(%)

Apr-jun 2009 196.39 207.38 10.99 5.30

Jul-sep 2009 200.33 211.61 11.28 5.33

Oct-dec 2009 201.83 218.00 16.17 7.42

Jan-mar 2010 206.00 221.19 15.19 6.87

(Source : SRLDC)

Wind Resource in Tamil nadu

(Source: CWET)

Potential in Tamil nadu

S. No.

Location

Tentative Gross

Potential

Harnessed up to

31.03.2009

MW

I (Muppandal area) Kanyakumari /

Tirunelveli Districts2100 1623

II (Kayathar area) Tirunelveli,

Thoothukudi Districts1300 880

III (Kethanur area) Coimbatore District 1650 1524

IV Coastal area near Chennai and

Rameswaram in Ramanathapuram

District and other areas (Theni, Palani

areas)

450 260

Total 5500 4287(Source : TEDA)

Year-wise Installed Capacity Addition (MW)

Upto M

ar-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

Total ca

pacity

0500

100015002000250030003500400045005000

806.

8599

9999

999

846

.96

132.91355.15 688.

33

860.65

570.

46

392.

65

423.67 598.

348

75.9

4Tamil Nadu

M W

(Source : TEDA)

Cost CalculationProject Size 0.60MW Capacity of WEG 600KWProject Cost Rs 310 Lakhs*Plant Load Factor 26.64%

Generation 14 Lacs KWh/Annum O&M Rate (first 3 years) NilFrom 4th year RS 5 Lacs /Annum + 5% escalationDepreciation Rate 5.28%Term Loan ( 75% ) Rs 232.5 Lacs Investors Equity (25%) Rs77.5LacsInterest Rate 10.00% / Annum Repayment period 5 Years

MAT Rate 11.22% MAT/IT on Return On Equity

IT Rate 33.99%* Inclusives of Taxes & Duties  

Result & Discussion

80% Accelerated depreciation on wind electric generators for income tax calculations subject to a minimum utilization for 6 months in the year in which deduction is claimed.

Import of wind electric generator is permitted under Open General License.

Customs duty concessions on wind electric generators and certain essential spares.

10 years Tax holiday in respect of profits / gains from private wind electric generators.

Generation Based Incentive(GBI) @ 50 paise/ Kwhr

Incentives by MNRE, GOI

Cheapest source.

Fastest payback period.

Lowest gestation period; and a modular concept.

Operation and Maintenance (O&M) costs are low.

No marketing risks.

Fuel source is free, abundant and inexhaustible.

Benefits of wind energy

Creation of local employment opportunities.

Improvement of power transmission networks.

Reduction of transmission cost.

Improvement in quality of power.

Long term energy security.

Overall development of the area.

Socio-Economic Benefits

Central & State Government Policy Highlights:80% accelerated depreciation.Excise duty/import tariff concessions.Tax holiday for power generation.Feed-in tariffs.Wind energy quota.Provision of banking, wheeling and third party sale

of power.Other financial incentives/subsidies in certain

states.Foreign Investment Policy:

Automatic approval for foreign investors to enter into Joint Venture with an Indian partner for financial and/or technical collaboration/setting up of RE based powerprojects (100% equity permissible)

Government Policies Incentives

Can be located only where strong and dependablewinds are available.

Wind is intermittent and hence infirm power.

Wind towers and blades subject to damage from very high wind and lightning.

Electricity produced by wind sometimes fluctuate in voltage and power factor

Limitations of Wind Energy

Eligible for carbon credit benefits under the Kyoto Protocol for a decade from 2002.

Estimate drawn up by the Infrastructure Development Finance Corporation (IDFC), each unit of electricity produced by wind power, could earn 15 paise worth of carbon credits.

As per a rough calculation, a 600/750 KW turbine can earn its O&M cost per year.

The ‘Prototype carbon fund’ of the World Bank encourages investor to fund renewable energy projects. Investors are given pro-rata share of the CERs produced from their investment.

India contributes 11.5% to the volume of CER’s from registered projects Carbon trading is an important market driver; a recent alert spoke of India standing to gain $5 billion from carbon credit in next 6-7 years

Carbon Finance

Small aero generator (Mini-wind mills)

Stand alone type generator used to produce

electricity for captive purposes.

Installed in place wind speed is more than 15 kmph.

41 places have been identified in 8 districts from 67

sites surveyed which are suitable for installing aero

generators.

Consists of smaller capacity wind electric generator, (up

to 30 kW) a tower, a battery bank with an inverter and

electronic control system.

Scope

Industries  Lighting & other electrical uses in Office /

factory buildings, Guest houses,

residential quarters, street lighting etc.

Local bodies/

Institutions Office buildings, guest houses, tourist

home, hostels, remote buildings in remote

locations, street lighting etc.

Individuals  Farm houses, gardens,  campus lights

Economics (Tentative)

Cost of system - Rs.2.50 - 3.00 lakhs / kW.

MNRE Subsidy for the system for 2007-08, up to

50% of Ex-works cost for individuals and 75% for

community users subject to a maximum limit. (subject

to change)

Saves around 2500 kWh per kW per annum

depending on wind speed and duration.

Policy

Wind energy is pollution free and nature friendly

Wind energy has very good potential and it is the fastest

growing energy source

The future looks bright for wind energy because

technology is becoming more advanced and windmills

are becoming more efficient

Conclusion

Force Strength km/h Effect

0 Calm 0-1 Smoke rises vertically

1 Light air 1-5 Smoke drifts slowly

2 Light breeze 6-11 Wind felt on face; leaves rustle

3 Gentle breeze 12-19 Twigs move; light flag unfurls

4 Moderate breeze 20-29 Dust and paper blown about; small branches move

5 Fresh breeze 30-39 Wavelets on inland water; small trees move

6 Strong breeze 40-50 Large branches sway; umbrellas turn inside out

7 Near gale 51-61 Whole trees sway; difficult to walk against wind

8 Gale 62-74 Twigs break off trees; walking very hard

9 Strong gale 75-87 Chimney pots, roof tiles and branches blown down

10 Storm 88-101 Widespread damage to buildings

11 Violent Storm 102-117 Widespread damage to buildings

12 Hurricane Over 119 Devastation

Beaufort Scale

Inside the Wind Turbine

Wind Mill Water pump

Ideally suited for pumping water for drinking

purposes and / for minor irrigation.

The wind speed is about 18 kmph.

Gear-type wind mills are also available which can

operate at a speed of 9 kmph.

Types

1. Gear type and

2. Gearless type.

Potential for use

Industries    Drinking water supply, gardening,

especially with

drip irrigation

Local bodies /

Institutions Micro irrigation / drinking water

supply, horticulture farms especially

with drip irrigation, community

parks etc.

Individuals    Micro irrigation / drinking water ,

horticulture farms with drip

irrigation

Economics (Tentative)

Cost of system - Rs.1.50 to 2 lakhs.

MNRE subsidy available for 2007 - 08

Rs.30,000/- per pump for Gear type and Rs.45,000/- per

pump for AV55 Type (subject to change)

Saves around 1500 kWh per annum depending on wind

speed and duration.

cost distribution Percentage

wind turbine 64

civil work 13

electrical infrastructure 8

grid connection 6

project management 1

Installation 1

Insurance 1

legal cost 2

bank fees 1

interest during construction 2

development fee 1

Overall Cost Distribution