mm report grp5

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MARKETING MANAGEMENT

PROJECT

ASSESSMENT OF MARKET POTENTIAL FOR WINDENERGY IN INDIA

BY

BHAVIK MODY (M-09-06)

MANISH DHELIA (M-09-15)

PRAVEEN KUMAR RAI (M-09-23)

RADHIKA REWARI (M-09-24)

RAJIV GANDHI INSTITUTE OF PETROLEUMTECHNOLOGY, RAE BARELI

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ABSTRACT

Energy security and sustainable development are high in the global agenda due to the

impact of volatile energy prices, high demand for energy security, and concerns overenvironmental sustainability and the global climate change. New and renewable energytechnologies are considered to be one of the viable options to meet the challenge ofachieving sustainable development while conserving natural resources that have beendepleted due to the rapid growth in population, urbanization, and fossil fuel consumption.Wind energy not only offers both a power source that completely avoids the emission ofcarbon dioxide, the main GHG, but also produces none of the other pollutants associatedwith either fossil fuel or nuclear generation.The Indian renewable energy sector has shown impressive growth in the past few yearsand investments into the sector have increased significantly. Looking into the past yearsrecords and also the policies and actions of Government of India to encourage the

implementation of renewable energy resources for power generation, the future of Indianenergy sector seems bright.In this report here we are concentrating on the current energy scenario of India withrespect to wind energy. We shall be studying the current status of wind energy generationin India and also look into the future forecasts. Moreover, we shall be analyzing thecurrent market conditions in India for any new player who wishes to enter the windenergy sector in India.For this purpose we shall be getting and insight in the technical, financial, environmentaland political conditions of wind energy and also identifying the potential threats andopportunities in Indian wind energy market. We shall be referring the policies andregulations of Government of India and thereby identifying a possible market entry

strategy.

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INDEX

1. Introduction

1.1. Wind Energy

1.2. Wind Formation and Distribution

1.3. Wind Farms and Wind Turbines

1.4. Wind farm and Turbine Placement

1.5. Micro-generation

1.6. Advantages of Wind Energy

1.7. Disadvantages of Wind Energy

2. Global Wind Energy Scenario

2.1. Forecast for Global Wind Energy Scenario

3. Wind Energy Prospects in India3.1. Political Factors

3.2. Economic Factors

3.3. Social Factors

3.4. Technological Factors

3.5. State Policies

3.6. Other Factors

4. Market Player Analysis

4.1. Suzlon Energy Limited

4.2. Vestas Wind Technology India Private Limited

4.3. Enercon India Limited

5. Conclusion

I. Figure 1: Schematic Diagram of a Wind MillII. Figure 2: Wind Map of India

III. Exhibit A: WEG Installation Details World - Country WiseIV. Exhibit B: WEG Installation Details India State WiseV. Exhibit C: Total Generation From Wind Power Projects (MU)

VI. Bibliography

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INTRODUCTION

This project of assessing the wind energy potential in India is being executed with areference view of a new firm targeting the market of wind energy in India. Therefore allthe analysis and assessment done will be targeted to answer 2 basic questions:

1. Is it feasible and wise to enter the wind energy market in India?

2. If yes, then which state of India or which location will the firm like to target astheir entry point?

Before beginning our assessment of wind energy potential in India, it will be helpful tohave a brief idea about wind energy and its generation. This section provides an overviewto the generation of wind energy and its advantages and disadvantages.

WIND ENERGY

History suggests that use of wind energy is a very ancient and popular application.Humans have been using wind power for at least 5,500 years now with initial use beingsails to propel the ships. Architects in olden times designed wind driven ventilation

buildings. Windmills have been used for irrigation pumping and for milling grain since7th century AD. Wind power came into picture in late 19th century and small capacityturbines (20-30 kW) were constructed for providing power to isolated farms. Now theyhave evolved into huge megawatt turbines.

Wind power is the conversion of wind energy into a useful form of energy, such aselectricity, using wind turbines. Large scale wind farms are connected to electric powertransmission network, and the power generated is sold to commercial power suppliersand distributors. There is also another commercial application of wind mills that is verypopular. It is the installation and use of wind mills by industries to satisfy their powerdemands. Wind energy is more attractive than the fossil fuel power generation because itis plentiful, renewable, widely distributed, clean and produces no greenhouse gases.Wind power is non-dispatchable, meaning that for economic operation, all output must betaken when it is available. The variability in wind flow and directions also causeproblems for continuous power generation.

WIND FORMATION AND DISTRIBUTION

The driving force behind all the technologies we discussed above is the natural gift ofwind. It is the wind speed and direction that helps in blade rotation. Also theintermittence of wind also defines the continuity in power generation.The main reason behind the wind flow is sun. The earth is unevenly heated by the sun,such that the poles receive fewer sunrays directly as compared to the equator. Land heatsup quicker than seawater and this differential heating result in creation of wind currents.The wind currents reach up to 160 kmph at high altitudes. The rotation of the earthchanges the direction of the flow of air. These currents are harnessed for powergeneration using wind turbines. The estimated wind power that is potentially viable forgeneration is about 72 TW, which is much higher than the total global consumption of 15TW in the year 2005.

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But the inconsistency in wind flow and variable current speed inhibits the fact ofobtaining maximum power generation. Although technologies have been developed toobtain the maximum output from the available wind source.

WIND FARMS AND WIND TURBINES

In a wind farm, individual turbines are interconnected with a medium voltage (usually34.5 kV) power collection system and communications network. At a substation, thismedium-voltage electrical current is increased in voltage with a transformer forconnection to the high voltage electric power transmission system.

The surplus power produced by domestic microgenerators can, in some jurisdictions, befed back into the network and sold back to the utility company, producing a retail creditfor the consumer to offset their energy costs. The basic process of wind power generationis as follows (Refer Figure 1 for understanding):

The wind turns the blades of a windmill-like machine. The rotating blades turn the

shaft to which they are attached. The turning shaft typically can either power apump or turn a generator, which produces electricity.

Most wind machines have blades attached to a horizontal shaft. This shafttransmits power through a series of gears, which provide power to a water pumpor electric generator. These are called horizontal axis wind turbines.

There are also vertical axis machines, such as the Darrieus wind machine, whichhas two, three, or four long curved blades on a vertical shaft and resembles a gianteggbeater in shape.

The amount of energy produced by a wind machine depends upon the wind speedand the size of the blades in the machine. In general, when the wind speeddoubles, the power produced increases eight times. Larger blades capture morewind. As the diameter of the circle formed by the blades doubles, the powerincreases four times.

Main components of a wind electric generator are:1. Tower2. Nacelle3. Rotor

4. Gearbox5. Generator6. Braking System7. Yaw System8. Controllers9. Sensors

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Induction generators are used in wind power projects and they include substantialcapacitor banks for power factor correction. Doubly-fed machines - wind turbines withsolid state converters between the turbine generator and collector system - are generallymore desirable for grid interconnection because of inconsistent power generation acrossdifferent turbines. Since wind speed is not constant, a wind farm's annual energy

production is never as much as the sum of the generator nameplate ratings multiplied bythe total hours in a year. The ratio of actual productivity in a year to this theoreticalmaximum is called the capacity factor. Typical capacity factors are 2040%, with valuesat the upper end of the range in particularly favourable sites. Wind energy "penetration"refers to the fraction of energy produced by wind compared with the total availablegeneration capacity. There is no generally accepted "maximum" level of windpenetration. The limit for a particular grid will depend on the existing generating plants,pricing mechanisms, capacity for storage or demand management, and other factors. Aninterconnected electricity grid will already include reserve generating and transmissioncapacity to allow for equipment failures; this reserve capacity can also serve to regulatefor the varying power generation by wind plants.

WIND FARM AND TURBINE PLACEMENT

Placement of turbine and location of the wind farm play a pivotal role in powergeneration. Good selection of a wind turbine site is critical to economic development ofwind power. Aside from the availability of wind itself, other factors include theavailability of transmission lines, value of energy to be produced, cost of land acquisition,land use considerations, and environmental impact of construction and operations. Off-shore locations may offset their higher construction cost with higher annual load factors,thereby reducing cost of energy produced. Wind farm designers use specialized windenergy software applications to evaluate the impact of these issues on a given wind farmdesign.An area where a number of wind electric generators are installed is known as a windfarm. The essential requirements for establishment of a wind farm for optimalexploitation of the wind are1. High wind resource at particular site2. Adequate land availability3. Suitable terrain and good soil condition4. Proper approach to site5. Suitable power grid nearby6. Techno-economic selection of WEGs7. Scientifically prepared layout

MICRO-GENERATION

Small-scale wind power is the name given to wind generation systems with the capacityto produce up to 50 kW of electrical power. Isolated communities, that may otherwiserely on diesel generators may use wind turbines to displace diesel fuel consumption.Individuals may purchase these systems to reduce or eliminate their dependence on gridelectricity for economic or other reasons, or to reduce their carbon footprint. Windturbines have been used for household electricity generation in conjunction with batterystorage over many decades in remote areas.

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ADVANTAGES OF WIND ENERGY

The main advantages of power generation from wind energy are1. The capital cost is comparable with conventional power plants. For a wind farm, thecapital cost ranges between 4.5 crores to 6.85 crores per MW, depending up on the type

of turbine, technology, size and location.2. Construction time is less.3. Fuel cost is zero.4. O & M cost is very low.5. Capacity addition can be in modular form.6. There is no adverse effect on global environment. The whole system is pollution freeand environment friendly.The pollution saving from a WEG having an average output of 4,00,0.00 kWh per

year has been estimated as:Sulphur - dioxide (SO2): 2 to 3.2 tonnes

Nitrogen - oxide (NO); 1.2 to 2.4 tonnesCarbon - dioxide (CO2): 300 to 500 tonnesParticulates: 150 to 280 kg.

Comparison between Fossil Fuels and Wind

Availability Usable as it exists Have to be procured andmade usable throughlaborious andenvironmentally damagingprocesses

Limitation onavailability

Inexhaustible resource Limited in reserves,expected to get completelyexhausted in the coming 60years

Transportation Used where it is available Have to be transported fromthe site for furtherprocessing exposingenvironment to danger

Use in production Zero emission Used in producingelectricity releasing greenhouse gasses

Geo-politicalImplications

Reduces our reliance on oil,safeguarding national security

Over-reliance on oil as aresource has underminedour energy security. E.g.OPEC crises of 1973, GulfWar of 1991 and Iraq Warof 2003

There is no adverse effect

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on global environment. Thewhole system is pollutionfree and environmentfriendly.

DISADVANTAGES OF WIND POWER

Wind machines must be located where strong, dependable winds are available most of thetime.2. Because winds do not blow strongly enough to produce power all the time, energyfrom wind machines is considered "intermittent," that is, it comes and goes. Therefore,electricity from wind machines must have a back-up supply from another source.3. As wind power is "intermittent," utility companies can use it for only part of their totalenergy needs.4. Wind towers and turbine blades are subject to damage from high winds and lighting.Rotating parts, which are located high off the ground can be difficult and expensive to

repair.5. Electricity produced by wind power sometimes fluctuates in voltage and power factor,which can cause difficulties in linking its power to a utility system.6. The noise made by rotating wind machine blades can be annoying to nearby neighbors.7. People have complained about aesthetics of and avian mortality from wind machines.

GLOBAL WIND ENERGY SCENARIO

After getting an insight of the technical aspects of wind energy generation, it is time toreview the current wind energy scenario of the world. The global scenario will provide abase to assess the Indian potential. The following points summarize the current global

scenario pertaining to wind energy. Exhibit A provides an overview to all the detailsgiven below.

Total nameplate capacity of wind turbines operating around the world is of121,188 MWp out of which 55% is generated in Europe.

The share of top 5 nations in terms of new installations was 73% in 2008. The top5 major wind energy producers are USA, Germany, Spain, China and India.

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WEG Installation Details World - Country Wise (in MW)source : http://ww w.windpow er-monthly.com/WPM:WINDICATOR:410681362

0

20000

40000

60000

80000

100000

120000

140000

Germany Spain India China US WORLD

2006

2007

2008

2009

The wind power contribution to the total power generation of the world increasedto 1.5% (260TWh) in 2008.

The USA and China contributed a lot in wind energy installations in the year2008. United States taking over the global number one position from Germanyand China getting ahead of India for the first time, taking the lead in Asia.

FORECAST FOR GLOBAL WIND ENERGY SCENARIO

World Wind Energy Association has predicted the installation capacity to reach160 GW by 2010.

The current annual production capacity of domestic wind turbines is about 2500MW, which is expected to grow by 10 000 MW until 2010.

10% to 20% market growth rebound is anticipated from 20102012 as longer-term investments and market reforms progress.

Investments in wind energy sector are supposed to rise to $277 billion.

In 2012, Europe will continue to host the largest wind energy capacity, with the

total reaching 102 GW, followed by Asia with 66 GW and North America with61.3 GW.

Asia is predicted to overtake Europe as the biggest annual market, with as muchas 12.5 GW of new wind generating capacity installed during the year 2012.

North America will see an addition of 42.6 GW in the next five years, reaching61.3 GW of total capacity in 2012.

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Asia is predicted to overtake Europe as the biggest annual market, with as muchas 12.5 GW of new wind generating capacity installed during the year 2012.China is predicted to be the biggest global market.

WIND ENERGY PROSPECTS IN INDIA

India is the fifth largest wind power generating nation in the world even when itsinstalled capacity is far below the existing potential capacity. The Indian renewableenergy sector has shown impressive growth in the past few years and investments into thesector have increased significantly. After an overview of global conditions and technicalaspects of wind energy and wind farming, it is time to assess the wind energy marketpotential in India. We shall carefully assess all factors that can affect the market in India.

POLITICAL FACTORS

The Indian government by 2012 expects renewable energy to contribute 10% of the totalpower generation capacity and have 4%5% share in the electricity mix. The IntegratedEnergy Policy Report of the Planning Commission of India has observed that thecontribution of modern renewable sources to Indias energy mix by 20312032,excluding large hydro, would be around 5%6%. It may be noted that wind powercontributes 70% of the grid-interactive renewable power installed in the country.

There are a number of measures that help drive wind energy development, includingfiscal incentives such as income tax exemption for 10 yr, 80% accelerated depreciation,sales tax exemption, and excise duty exemption.

The government had formed a set of guidelines which were revised depending on thefeedback received and from the experience. The new guidelines are address to all thestate electricity board (SEBs) and State Nodal Agencies (SNAs) and also financialinstitutions like IREDA, who carry out appraisal of wind power projects in accordance tothe guidelines.

The No Objection Certificate (NOC) provided by the SNA or SEB is the first andforemost requirement for an organization to own before it undertakes a wind farmingproject. A technical committee is appointed by the government to appraise and monitorthe project and give time bound temporary clearances.

The criteria for providing NOC to any project are as follows:

Detailed project report / application providing the data related to capital cost, costof generation, energy generation, O&M, selection of equipment etc. For morethan 1 MW project details about mircogeneration is also to be provided.

Site clearance is needed depending on the viability of wind flow and potentialgeneration capacity that is to be estimated.

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Equipment and machinery used should be properly tested and certified as per thestandards incorporating those equipments.

Proper analysis and estimation of generation cost and capital cost that will beincurred for the project.

It is to be verified that adequate stock of spare parts are present for operations and

maintenance of all machinery and equipment for at least 2 years. It should be ensured that the project generates power in accordance with the duly

laid down grid parameters. A penalty is levied by SNAs on the firm if the projectfails to reach the 0.85 power factor at the metering point of wind farm.

A submission of monthly status report to the regulating bodies.

ECONOMIC FACTORS

Here we shall concentrate on the cost of wind power generation and pricing of the power.

Today, India is facing severe shortage of electricity and it is projected that by 2012, Indiawill have to add approx. another 150,000 MW to its current installed capacity, which isapprox. an average increase of 10,000 MW annually. The country is thus likely to fallway behind the required capacity additions. The gap thus created is the lucrative area thatcan be exploited for wind energy production.

The cost incurred in installation of one wind mill is estimated to be Rs. 1 crore. A bankprovides about 70% of cost as loan. The 30% can be self managed by putting ones ownequity or by partnering with more than one investors. The advantage of this project is80% of cost is given as accelerated depreciation and thereby provides tax benefit forrenewable energy during the first year. In India, turbine prices have always been lower

than the global average, thanks to lower labour and production costs. For the purpose ofthese scenarios, the current costs of 53.5 mil Rs/MW (771,000 /MW) were taken as astarting point, and these are projected to decrease to 50.0 mil Rs/MW by 2010 and thenstabilize at that level.

Through central- and state-level policy intervention wind energy is produced at anyidentified windy site in the state. The energy produced is supplied to the State ElectricityBoard's grid, can be either sold to electricity boards or utilized against captiveconsumption and third-party sale on payment of wheeling charges.

So, on an initial estimation, an individual investing in a wind turbine will garner about Rs

13 lakh by selling energy to the state electricity board in the first year. Wind turbine takesfive-six years to break-even, while its lifespan is about 20 years.

The annual operation and maintenance cost, including insurance, works out to Rs 40,000-50,000. Wind turbine makers provide one-year warranty on the installation.

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The good news for those interested in investing in wind energy is that wind turbinemanufacturers do provide assistance from ideas to installation. Wind turbine makers alsotake care of spotting a suitable location to install and maintain wind turbines.

There is a double bonanza in case of energy trading for wind energy producers. With the

government policies and regulations the producer gains substantial amount of revenuefrom the sales of wind energy. Along with that usage of green technology and pollutionfree methods makes the producer eligible for earning Carbon Credits under the CDMproject. These credits can be used for industry expansion or can be sold in market formoney.

SOCIAL FACTORS

The wind energy sector mainly supports society by contributing towards the

environmental cause. As discussed earlier in the advantages of wind energy we have a lotmany benefits that can be reaped from any wind farm installation. There are no othersocial factors that may affect the wind energy generation projects in India.

TECHNOLOGICAL FACTORS

The technical aspects related to wind farms; wind mills and energy production havealready been covered in the preceding sections. Here we shall analyze the affects of theseon wind energy market.

Individual wind turbines have been steadily growing in terms of their nameplate capacity

the maximum electricity output they achieve when operating at full power. The averagecapacity of wind turbines installed in India in 2008 was 1MW, up from just 400 kW in2000. Globally, the largest turbines now available for commercial use are up to 6 MW incapacity. Each turbine has an operational lifetime of 20 years, after which it will need tobe replaced. The technological advancements in increasing the nameplate capacity ofturbines helps in increase in production. Bigger turbines would replace the obsolete or outof order smaller turbines and therefore more production can be achieved with samenumber of installations.

Capacity factors are also affected by the efficiency of the turbine and its suitability for theparticular location. From an estimated average capacity factor in India today of 20.5%,

the scenario assumes that improvements in both wind turbine technology and theinstallation location of wind farms will result in a steady increase. The scenario projectsthat the average capacity factor in India will increase to 23% by 2011, 25% by 2021 andthen 27.5% from 2026.

These technological advancements and researches also provide a clear insight into themarket of wind energy in India, showing a great scope of development and advancementswhich are beneficial for all the stakeholders.

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STATE POLICIES

Now we shall look at the policies that the states have applied in order to facilitate windenergy generation projects within the states. These states are Kerala, Rajasthan, TamilNadu, Karnataka, Andhra Pradesh, Maharashtra, Madhya Pradesh, West Bengal, Gujarat,

and Haryana.

Financial and fiscal incentives introduced/declared by the state governments for private sector winpower projects

States/itemsCaptiveuse Wheeling Banking

Buy-back rateby SEB

ThirdPartysale

Otherincentives

Penalty onkVArhconsumpti

AndhraPradesh Allowed

At par withconventional -----

Rs 3.50/kW hwithout anyescalationfor 10 yr as perA.P. Govt.Policyamendmentdate09.09.2008subject toapproval ofAPERC Allowed

IndustryStatus

Rs0.10/kVArhup to 10%and Rs0.25/kVArhabove 10%

Gujarat Allowed

4% ofenergy5% of

energy +Rs. 1.15 /kWh ofenergy

notallowed

Rs 3.50/kW hwithout anyescalation for20 yr Allowed

Electricitydutyexempted,

demand cut30% of windfarm installedcapacity

Rs0.10/kVArh

up to 10%and Rs0.20/kVArhabove 10%

Karnataka Allowedfor 3rd partysale

allowedat 2% ofenergyoutput

Rs 3.40/kW hwithout anyescalation for10 yr ofcommercialoperation Allowed

No electricityduty for 5 yr

Rs.0.40/kVArh

Kerala Allowed

To bedecided by

SERC ----

Rs 3.14/kW hwithout anyescalation for

20 yr Allowed ------- -------MadhyaPradesh

Allowed 2% of energy +transmissioncharges asper ERC

notallowed

Year wise ratesRs/kW h from1st20th year:1st year4.03,2ndyear3.86, 3rdyr3.69, 4thyear3.52,5th20th year

Allowed No electricityduty for 5 yr

Rs0.27/kVArh

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3.36

Maharashtra Allowed

2% energyas wheeling+ 5% asT&D cost

12months

Rs 3.50/kW hfirst year ofcommissioning.escalation of15paise per yearfor 13 yr Allowed

Power

evacuationarrangement,approachroad,electricityduty,loan tocooperativesocieties

Rs0.25/kVArh

Rajasthan Allowed

Below 132kV, 50% ofnormalchargesapplicable to33 kVdeclared bycommission+ surcharge+ losses

6months

For Jaisalmer,Jodhpur, andBarmerdistrict Rs 3.60

per unit forinjection in 33or 11 kVsystemand Rs 3.71per unit forinjectionin EHV system.For otherdistrictRs 3.78 perunit forinjection on33 or 11 kVsystem and Rs3.89per unit forinjection inEHV system Allowed

Exemptionfromelectricityduty at 50%for 7 yr

Rs 0.05/yrw.e.f.01/04/2006withescalation o5%/yr

Tamil Nadu Allowed5% ofenergy

5% perannum

Rs 2.90/kW hNote: TNERChasproposed, Rs3.40 in itsdiscussionpaper.However, finalorder is yetto be issued. Allowed ---------

Rs0.25/kVArhthe ratioof kVArhdrawn to kWexported isto 10%and Rs0.50/kVArhfor more tha10%.

West Bengal Allowed

7% ofenergy +open accesscharges ------- Rs 4/kW h Allowed --------- ---------

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Moreover, the Maharasthra government has been providing some extra incentives inorder to promote the wind farming and wind energy production within the state. Theseare:

For evacuation arrangement of wind energy project, 50% amount will be given asa subsidy through Greens energy fund and 50% amount will be given as a loan

without interest to private developers. The loan will be repaid byMSEB/transmission licensees after commissioning and transferring the ownershipof evacuation arrangement to MSEB/transmission licensees in 5 equal yearlyinstallments.

100% expenditure for construction of approach roads will be made through Greenenergy fund.

No electricity duty for 5 yr for captive use.

11% share capital will be provided to cooperative sector for setting up of windpower projects as a grant through Green energy fund.

OTHER FACTORS

There are some other factors that are to be for assessment of market potential. It isimportant to study the viable locations for wind farm setup in India. As known there are 4types of wind farm setups: Offshore, Onshore, Near-Shore and Aerial.India has a large potential for Offshore, onshore and near-shore wind farms (Figure 2 canbe used for reference). The macro-scale atmospheric flow of wind in tropical India isdetermined strongly by the strength of the monsoon winds i.e. the South-West monsoonwinds and the North-East Monsoon winds. The vast Indian shoreline and alsomountainous terrains act as ideal locations for near-shore and onshore wind farmlocations respectively. Several shallow parts along the islands of Lakshadweep and

Andaman and Nicobar as well as Sundarban Delta can be used for offshore setups.The current trends provide an optimistic view to the wind energy market conditions inIndia. Looking at the data provided in Exhibit B and Exhibit C we can assess the currentscenario of Indian wind energy market. Exhibit B specifies the current maximumcapacity that each state has in terms of wind energy installations. Exhibit C emphasizeson the last 3 years of data on wind energy generation achieved by each player state. Thedifference between the values in Exhibit B and Exhibit C make up the gap that can beexploited for future market competition.Microgeneration is another aspect of wind energy that can be implemented widelythroughout the country.

MARKET PLAYER ANALYSIS

After understanding the factors that affect the wind energy market in India, it is time tohave a look into the market and the players currently operating in the market. There are anumber of small and big players in the wind energy market of India. Here we shall belooking at brief data of the top market players.

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SUZLON ENERGY LIMITED

Suzlon Energy Ltd., which commenced operations in India in 1995 with just 20 people,has now grown into one of the major global leaders in the wind power industry. Suzlonprovides End-to-End Solutions for the Indian markets in the wind power domain. Frominitiating a project, till completion and beyond, Suzlon offers solutions at every stage of

wind-powered energy. Some quick facts about Suzlon are:

Current cumulative installed base (YTD March.2009) is more than 4400 MWacross 8 states in India.

Suzlon enjoys market leadership edge in India with a consistent market share ofover 50% consecutively in the last 10 years.

9% global market share and ranked 3rd as global market supplier.

Market leader in Asia with operations now extending to 21 countries acrossAmerica, Europe and Australia.

Sophisticated R&D capabilities in Denmark, Germany, India and The Netherlands

In 2008-09: the total projects commissioned by Suzlon Clocked 782 MW giving

the company a market share of 52% Patronized by hundreds of customers across India from varied business segments

- clientele includes small / medium / big sized companies; Indian / Multinationalcorporate houses, private / public sector enterprises, community ownership andeven High Net worth individuals (HNI)

Currently Suzlon has 11 manufacturing facilities in India employing over 3,000 peoplewith an output of close to 12,000 MW per year.

Name Location Manufactured Components

ProductionFacility

Chakan,Maharashtra

Generators

Control PanelUnit

Daman Control Panels

IntegratedManufacturingFacility

Daman Rotor Blade, Nacelle, Nacelle Cover ,Control Panel & Hub WTG Assembly

Rotor BladeManufacturingFacility

Dhule,Maharashtra

Rotor Blades

Tubular TowerManufacturingFacility

Dhule,Maharashtra

Tubular Tower

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Tubular Tower Gandhidham,Gujarat

Tubular Towers

IntegratedManufacturing

Facility

Pondicherry Rotor Blade, Nacelle, Nacelle Cover ,Control Panel & Hub WTG Assembly

CompositeEngineering Cell

Vadodara,Gujarat

Synthetic Fiber

VESTAS WIND TECHNOLOGY INDIA PRIVATE LIMITED

Vestas Wind Technology India Private Limited (Formally Known as NEG Micon), is awholly owned subsidiary of Vestas Group, Denmark. Vestas is the world leader in Windenergy with a market share that is twice that of its nearest competitor. In 25 years, Vestashas installed more that 33,500 turbines in over 60 countries. In India, Vestas has beenpresent for over a decade and has installed wind turbines across the country. VestasIndian operation is headquartered in Chennai and has world class manufacturing facilitiesin Chennai and Pondicherry.

ENERCON INDIA LIMITED

Enercon India, since its inception in 1994, has been making giant strides. It has alreadyinstalled more than 1800 wind energy converters in India with total installed capacityexceeding 1000 MW. An ISO 9001-2000 certified company for manufacturing,installation and services. It has presence in seven high wind potential states viz,Karnataka, Maharashtra, Tamil Nadu, Rajasthan, Gujarat, Madhya Pradesh and AndhraPradesh. Enercon turbines have proven its viability in all categories of sites in the countryright from Kanyakumari in Tamil Nadu to Jaisalmer in Rajasthan. Wherever they wereinstalled the machines have performed the best both in terms of generation and in termsof low maintenance. Moreover its grid friendly nature has made it the naturally preferablewind machine. Wind Potential in India as per Enercons analysis

Eight states have commercially feasible wind potential. Mapped Potential at 50 meters. Hub height - 45,000 MW. Installed as on March 2004- 2483 MW, hence huge untapped potential exists. Govt. of India has proposed capacity Installation of 10,000- 12,000 MW of

renewable energy sources over next 10 years. Ministry of Non-conventional Energy Sources, Government of India plans to

generate 50% of above from wind energy translating into annual additions of5000 - 6000 MW.

These are the few market players that have been touched to understand their functioningand position in the market.

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CONCLUSION

The following points can be concluded depending on the assessment of wind energypotential in India.

Wind energy capacity in India is as large as 100GW. Wind energy is steadily increasing at a constant increase of about 5000MW per

year which is a good sign.

With the support from central and state government and the promotional policiesit is easier to enter, install, generate and sell wind energy and obtain substantialprofits in short span of time.

The environmental affects include reduction in carbon footprint, reduction inpollution and cleaner and greener energy production. Also carbon credit earningsare an add-on profit.

Technical and technological advancements are constantly improving theefficiency of wind turbines and thereby increasing the capacity.

Thus it is time to answer the 2 major questions that we put forward in the start of thereport.

1. Is it feasible and wise to enter the wind energy market in India?Yes. This is the best time for any firm to enter the Indian wind energy market.The conditions are favourable in all aspects that is political, economical, social,environmental, geographical and technological factors are facilitating and alldirect towards a profitable business. Moreover the huge gap between the demandand supply of power and possibility of feeling the deficit with wind energy beinghigh gives an impetus to the decision to enter the market.

2. If yes, then which state of India or which location will the firm like to target astheir entry point?Looking at the various aspects and details it will be advisable to enterMaharashtra with the new projects. The reasons are as follows:

The State government is providing ample subsidies, loans and taxexemptions to firms establishing wind farms in the state of Maharashtra.

The geographical location of Maharashtra is best suited for establishingwind farms. With high altitude western ghats and Sahyadri ranges we havelarge number of suitable locations for onshore wind farms. Similarly thelarge coastline provides an opportunity to establish near-shore andoffshore wind farms.

Players like Suzlon have already established their bases in the state whichprove that even other firms feel it feasible to setup projects inMaharashtra.

It is also important to device a strategy to enter the market. The market strategy for windenergy generation not being very extensive or diverse can be summarized as follows:

Large scale wind farms can be installed providing high capacity powergeneration.

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Efficiency of installed wind farms can be improved by phasing out older turbinesand replacing them with modern highly efficient turbines that have moreproduction capacity. Thus more power is produced with same number ofinstallations.

Carbon credits earned by these projects can be utilized for other ventures or can

be sold in the market to generate additional revenue. Microgeneration can be targeted as another segment. Potential areas for

microgeneration projects are remote villages, tribal areas, forest areas, isolatedproduction / mining sites of companies, border areas etc. Moreover, medium andlarge scale industries can install their own wind mills and obtain their own powerthrough microgeneration and thereby saving on their electricity costs.Microgeneration can also be encouraged in small colonies and societies in urbanareas for uses like water pumping, street lighting etc.

Hence, this is how we have assessed the wind energy market potential in India whichrepresents a very bright future and loads of opportunities for growth and development in

energy sector.

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Figure 1: Schematic Diagram of a Wind Mill

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Figure 2: Wind Map of India

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EXHIBIT A

WEG Installation Details World - Country Wise (in MW)

Up dated on 01.04.2009

Year 2006 2007 2008 2009

EUROPE

Germany 19540 21283 23300 23903

Spain 11340 13400 15900 16740

France 1009 2085 3262 3387

Denmark 3137 3134 3148 3180

Italy 1840 2410 2933 3736

UK 1937 2203 2768 3334

Netherlands 1445 1655 2013 2216

Portugal 1314 1944 2462 2833Austria 965 975 982 995

Greece 642 753 910 985

Ireland 525 760 806 1053

Sweden 515 572 736 1021

Norway 281 333 444 436

Belgium 167 215 287 384

Poland 108 244 280 405

Turkey 49 147 423 383

Finland 86 107 128 143

Ukraine 70 86 86 90

Estonia 40 58 58 78

Luxembourg 35 35 35 35Czech Republic 28 56 56 133

Latvia 25 27 27 27

Lithuania 6 56 52 52

Switzerland 12 12 14 14

Russia 7 7 7 11

Hungary 14 37 112 127

Croatia 17 17 17 17

Slovakia 5 5 5 3

Cyprus 0 - - -

Romania 1 3 8 10

Bulgaria 1 33 109 158

PACIFIC REGIONJapan 1078 1491 1538 1540

Australia 817 892 824 1306

New Zealand 168 322 322 468

Philippines 25 25 25 33

Pacific Islands 24 24 24 24

MIDDLE EAST & AFRICA

Egypt 157 230 310 365

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Morocco 64 124 124 134

Iran 47 48 67 67

Tunisia 20 20 20 54

Reunion (France) 10 10 10 10

Israel 8 8 8 6

Cape Verde 3 3 3 3

South Africa 3 3 9 9Jordan 2 2 2 2

LATIN AMERICA

Brazil 206 296 273 336

Costa Rica 71 72 92 92

Caribbean 57 57 57 57

Argentina 26 27 30 30

Colombia 20 20 20 20

Cuba 5 5 7 7

Mexico 5 88 88 88

Chile 2 2 20 20

Peru 1 1 1 1

Falkland Islands - - 1 1Nicaragua - - - -

Ecuador - - 2 2

ASIA

India 5341 7000 8757 9645

China 1600 3655 9000 12200

South Korea 119 175 224 233

Taiwan 106 188 213 224

Sri Lanka 3 3 3 3

Bangladesh 1 1 1 1

USA

Texas 2699 3585 5834 7314

California 2323 2376 2508 2517

Iowa 836 967 1408 2810

Minnesota 794 897 1366 1752

Washington 590 818 1296 1375

New Mexico 407 496 496 497

Oregon 438 438 964 1067

Oklahoma 475 595 689 708

Wyoming 288 288 379 676

Colorado 291 366 1067 1067

New York 280 390 707 832

Kansas 264 364 465 815

Montana 146 146 165 272

Pennsylvania 153 178 294 361

Illinois 107 305 907 915

North Dakota 128 179 435 714

Nebraska 73 73 73 73

West Virginia 66 66 230 330

Wisconsin 53 53 327 395

South Dakota 44 44 197 187

Idaho 75 75 75 75

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Tennessee 29 29 29 29

Hawaii 49 63 63 63

Ohio 7 7 7 7

New Jersey 8 8 8 8

Vermont 6 6 6 6

Michigan 3 3 55 129

Alaska 2 2 2 2Utah 1 1 20 20

Rhode Island 1 1 1 1

Massachusetts 4 5 5 5

Indiana - - 130 131

Missouri - 57 162 163

Maine - 42 42 47

New Hampshire - 2 1 25

CANADA

Canada 1079 1588 1876 2369

Grand Total 66,663 81,957 105,732 120,645

source: http://www.windpower-monthly.com/WPM:WINDICATOR:410681362

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EXHIBIT B

India State Wise

as on 31.03.2009

Sl.No StateCapacity in

MW

1 Tamilnadu 4304.5

2 Karnataka 1327.4

3 Maharashtra 1938.9

4 Rajasthan 738.4

5 Andhra Pradesh 122.5

6 Madhya Pradesh 212.8

7 Kerala 27

8 Gujarat 1566.5

9 West Bengal 1.1

Total 10242.3Source: http://www.inwea.org/installedcapacity.htm

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EXHIBIT C

Wind Power ProgrammeTOTAL GENERATION FROM WIND POWER PROJECTS

(MU)

As on 31.03.2008

S.No.

Name ofthe State

Generation Generation Generation

Up to2005-06

Up to2006-07

Up to2007-08

1 AndhraPradesh

1041.3 1190.48 1020

2 Gujarat 1461.31 1916.22 2924

3 Karnataka 2342.34 3470 5581

4 Kerala 15.86 15.86 0

5 MadhyaPradesh

234.13 304.56 469

6 Maharashtra 3440.11 5131.61 69587 Rajasthan 922.72 1455.32 2135

8 Tamil Nadu 15413.3 20682.14 26748

9 West Bengal 3 3 0

Total 24874.07 34439.19 45827

Source: http://www.windpowerindia.com/statcumul.html

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Total Generation from Wind Power Projects

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

AndhraPr

adesh

Gujar

at

Karna

taka

Kerala

Madhya

Prad

esh

Maha

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a

Rajas

than

TamilN

adu

WestBe

ngal

TOTA

L

2005-06

2006-07

2007-08

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BIBLIOGRAPHY

Indian Wind Energy Outlook 2009, GWEC.

Global Wind Energy Outlook 2009, GWEC.

www.suzlon.com

http://www.enerconindia.net http://www.cwet.tn.nic.in

www.vestas.com

www.geda.org.in

www.emeraldinsight.com

http://en.wikipedia.org/wiki/Wind_power

http://www.windpower-monthly.com/

http://www.windpowerindia.com/statcumul.html

http://mnes.nic.in

Paola Solari and Gabriella Minervini, Exploitation of renewable energy sources

and sustainable management of the territory Wind farms in Regione Liguria, EIAOffice, Regione Liguria, Genova, Italy

Ishan Purohit and Pallav Purohit, Wind Energy in India: Status and futureprospects, Journal of Renewable and Sustainable energy, 8 July 2009.
http://www.suzlon.com/http://www.enerconindia.net/http://www.cwet.tn.nic.in/http://www.vestas.com/http://www.geda.org.in/http://www.emeraldinsight.com/http://en.wikipedia.org/wiki/Wind_powerhttp://www.windpower-monthly.com/WPM:WINDICATOR:410681362http://www.windpower-monthly.com/WPM:WINDICATOR:410681362http://www.windpowerindia.com/statcumul.htmlhttp://mnes.nic.in/http://www.suzlon.com/http://www.enerconindia.net/http://www.cwet.tn.nic.in/http://www.vestas.com/http://www.geda.org.in/http://www.emeraldinsight.com/http://en.wikipedia.org/wiki/Wind_powerhttp://www.windpower-monthly.com/WPM:WINDICATOR:410681362http://www.windpowerindia.com/statcumul.htmlhttp://mnes.nic.in/

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