1

55thth Capacity Building Programme for Capacity Building Programme for Officers of Electricity Regulatory CommissionsOfficers of Electricity Regulatory Commissions

18 18 –– 19 Oct., 2012, IIT Kanpur &19 Oct., 2012, IIT Kanpur &21 21 –– 23 Oct., 2012, Bangkok23 Oct., 2012, Bangkok

Renewable Energy: Resources, Renewable Energy: Resources, Technology, Economics and PoliciesTechnology, Economics and Policies

Anoop SinghAnoop SinghAssociate Prof.Associate Prof.

Dept of Industrial and Management Dept of Industrial and Management EnggEngg..IIT KanpurIIT Kanpur

Electricity Consumption and Electricity Consumption and Economic GrowthEconomic Growth

Sweden14000

16000

OECD

Australia

Germany

Japan

Korea

Russian Federation

Saudi Arabia

Swede

United States

6000

8000

10000

12000

14000

Ele

ctri

city

m

pti

on p

er c

apit

a(k

Wh

)

World

Asia Latin AmericaAfrica

Argentina

Bangladesh

BrazilPeople's Rep. of China

IndiaIndonesia

Malaysia

United Kingdom

0

2000

4000

6000

0 5000 10000 15000 20000 25000 30000 35000 40000

Con

su

Per Capita GDP (USD PPP)

2

Shortage and Growing Need for Shortage and Growing Need for ElectricityElectricity

Forecast of All India Electrical Energy Requirement

794561 848390968659

1392066

1914508

777039 8305941000000

1500000

2000000

2500000

rica

l ene

rgy

requ

irm

ent (

GW

h)

Forecast Actual

697961 744515 794561690587 739343 777039

0

500000

Ele

ctr

YearsSo: As per 17th Electric Power Survey

Shortage and Growing Need for Shortage and Growing Need for Electricity (Contd.)Electricity (Contd.)

Forecast of All India Peak Electricity Demand

104867 113059 121891 131413152746

218209

298253

100715 108866 109809 119166

100000

150000

200000

250000

300000

350000

Pea

k L

oa

d (M

W)

Forecast Actual

0

50000

100000

YearsSo: As per 17th Electric Power Survey

3

India’s Energy ResourcesIndia’s Energy Resources

India’s Energy ResourcesIndia’s Energy Resources

4

Oil Oil -- Reserves to production ratios in Reserves to production ratios in 2008 (Source: WEC SER)2008 (Source: WEC SER)

Domestic Consumption and Domestic Consumption and Production of Crude OilProduction of Crude Oil

5

Top ten hard coal producers and Top ten hard coal producers and importers importers –– 2008 (So: IEA)2008 (So: IEA)

Projections for Total Primary Projections for Total Primary Commercial Energy RequirementsCommercial Energy Requirements

•• TPCES 1 TPCES 1 -- Falling EnergyFalling Energy--GDP GDP elasticitieselasticities

•• TPCES 2 TPCES 2 –– Constant EnergyConstant Energy--GDP GDP elasticitieselasticities

Almost four times growth!

6

Projections for Electricity DemandProjections for Electricity DemandPolicy and Regulatory

Regime to attract investmentinvestment

Demand Scenario for Petroleum Demand Scenario for Petroleum ProductsProducts

7

Demand Projection of Coal (in Mt)Demand Projection of Coal (in Mt)

Projected Primary Commercial Energy Projected Primary Commercial Energy Requirements Requirements –– A Scenario (A Scenario (MtoeMtoe))

Cl C l Effi i tClean Coal technologies –

SC, USC, IGCC

Efficient Engines, bio-

fuels, fuel cells, veh. emissions

8

Demand of Various Energy Items for Demand of Various Energy Items for Household Consumption (Household Consumption (MtoeMtoe))

Efficient Appliances (starAppliances (star

rating)

Per Capita Energy Requirements in Per Capita Energy Requirements in Selected CountriesSelected Countries

India’s Commitment atCommitment at

UNFCCC

9

CO2 Emissions CO2 Emissions ––Per Capita and per GDPPer Capita and per GDP

4.00

4.50

People's Rep. of China

India

I d i

Russian Federation

Saudi Arabia

2.00

2.50

3.00

3.50

GD

P(k

g C

O2/

2000

US

D)

World

OECD

Asia

Latin America

Africa

ArgentinaAustraliaBangladesh

Brazil

Germany

Indonesia

Japan

Korea

Malaysia

Saudi Arabia

SwedenUK United States

0.00

0.50

1.00

1.50

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00

CO

2/G

CO2 Emission per capita.(tCO2)

Sustainable Energy PathSustainable Energy Path

•• Domestic DriversDomestic DriversDomestic DriversDomestic Drivers–– Increasing energy demandIncreasing energy demand

–– Lack of fossil resources Lack of fossil resources

–– Increasing energy import (energy security)Increasing energy import (energy security)

–– Low clean energy accessLow clean energy access

•• International DriversInternational Drivers–– Global warming & Kyoto ProtocolGlobal warming & Kyoto Protocol

–– CompetitivenessCompetitiveness

10

Sustainable Energy Policy OptionsSustainable Energy Policy Options

•• Stimulate Green InvestmentStimulate Green InvestmentStimulate Green InvestmentStimulate Green Investment–– FiTFiT, RPO, REC, RPO, REC

•• Address Distortions in Energy PricingAddress Distortions in Energy Pricing–– Encourage energy conservationEncourage energy conservation

•• Address Environmental ExternalitiesAddress Environmental ExternalitiesChi h i h fl h SC h lChi h i h fl h SC h l–– Chimney height, fly ash use, SC technologyChimney height, fly ash use, SC technology

•• Enhance Energy EfficiencyEnhance Energy Efficiency–– Star Labeling, PAT SchemeStar Labeling, PAT Scheme

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Renewable Energy Resources Renewable Energy Resources ––Technological ChallengesTechnological Challenges

•• Increasing PV efficiencyIncreasing PV efficiencyIncreasing PV efficiencyIncreasing PV efficiency

•• Cost effective power electronicsCost effective power electronics

•• Energy Storage Energy Storage –– Fuel CellsFuel Cells

•• High capacity offshore windHigh capacity offshore wind

•• Grid IntegrationGrid Integration•• Grid IntegrationGrid Integration

•• Generation ForecastingGeneration Forecasting

•• (New Business Models (New Business Models –– ReplicabilityReplicability, , Scalability Challenges)Scalability Challenges)

Share of Share of RenewablesRenewables in Electricity Gen.in Electricity Gen.

So: IEA (2010), World Energy Outlook 2010

12

Role of Policy and RegulationRole of Policy and Regulation

Policy Policy –– Low Carbon GrowthLow Carbon Growth

•• Renewable EnergyRenewable EnergyRenewable EnergyRenewable Energy–– Electricity Act Electricity Act –– Renewable Purchase ObligationRenewable Purchase Obligation

–– Renewable Energy Certificates (REC)Renewable Energy Certificates (REC)

•• Energy EfficiencyEnergy Efficiency–– Energy Efficiency StandardsEnergy Efficiency Standards

–– Appliance RatingAppliance Rating

•• National Action Plan for Climate ChangeNational Action Plan for Climate Change–– JN National Solar MissionJN National Solar Mission

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Wind Energy Map of India

Untapped Wind Potential!Untapped Wind Potential!

•• Hub HeightHub HeightHub HeightHub Height

•• OffOff--shareshare

•• Vertical AxisVertical Axis

•• LBNL Study projects India’sLBNL Study projects India’s onshoreonshore windwind•• LBNL Study projects India s LBNL Study projects India s onshoreonshore wind wind potential to be 2,006,000 MW (3,121,000 potential to be 2,006,000 MW (3,121,000 MW) at 80 m (120 m) hub height!!!MW) at 80 m (120 m) hub height!!!

14

So: Phadke et al. (2012), LBNL

Capacity and Electricity Generation from Capacity and Electricity Generation from Renewable Energy Sources (2008Renewable Energy Sources (2008--09)09)

15

Solar Solar Resources in Resources in I diI diIndiaIndia

Challenge for Harnessing Renewable Challenge for Harnessing Renewable EnergyEnergy

•• ResourcesResourcesResourcesResources

•• TechnologyTechnology

•• FinancingFinancing

•• Policy & RegulationPolicy & Regulation

16

NREL/JapanEnergy

Multijunction ConcentratorsThree-junction (2-terminal, monolithic)Two-junction (2-terminal, monolithic)

Crystalline Si Cells

Spectrolab

Spectrolab

32

36

PV Cell Efficiency (So: LBNL)PV Cell Efficiency (So: LBNL)Ef

ficie

ncy

(%)

BoeingARCO

NREL

Euro-CIS

NREL/Spectrolab

NRELNREL

Energy

Spire

No. CarolinaState University

Crystalline Si CellsSingle crystal

Multicrystalline

Thin Film TechnologiesCu(In,Ga)Se2

CdTeAmorphous Si:H (stabilized)

Emerging PVDye cells

Organic cells(various technologies)

Varian

UNSW

UNSW

ARCO

UNSWUNSW

UNSWSpire Stanford

Westing-house

UNSWGeorgia Tech

Georgia Tech SharpNREL

NREL

UniversitySo. Florida

NREL

NREL

NRELCu(In,Ga)Se2

14x concentration

NREL

16

20

24

28

32

Universityof Maine

Boeing

Boeing

Boeing

BoeingARCOBoeing

200019951990198519801975

RCA

Solarex

Masushita

MonosolarKodak

Kodak

AMETEK

Photon Energy

United Solar

United Solar

RCA

RCARCA

RCARCA

RCA

Solarex

12

8

4

0

University ofLausanne

University ofLausanne

Siemens

2005

Kodak UCSBCambridge

Groningen

University LinzBerkeley

Princeton

UniversityLinz

How to make RE story a success?How to make RE story a success?

•• We have technology butWe have technology butWe have technology, but We have technology, but –– Resources are limited (land, Resources are limited (land, envenv. clearances) . clearances)

and hence to harness)and hence to harness)

–– It is expensive (….costs are coming down)It is expensive (….costs are coming down)

–– It is difficult to get investors to put moneyIt is difficult to get investors to put moneyIt is difficult to get investors to put money It is difficult to get investors to put money into itinto it

17

Need some Carrots (and small sticks)Need some Carrots (and small sticks)

CarrotsCarrots

•• SubsidiesSubsidies

•• FeedFeed--in Tariffsin Tariffs

•• Tax BreaksTax Breaks

S i k !S i k !Sticks!Sticks!

•• Obligation to buy electricity generated Obligation to buy electricity generated from renewable energy resources, from renewable energy resources, Renewable Portfolio ObligationRenewable Portfolio Obligation (RPO)(RPO)

Electricity Act 2003 and Policy Electricity Act 2003 and Policy Framework for Renewable EnergyFramework for Renewable Energy

•• State Electricity Regulatory Commissions (SERCs) State Electricity Regulatory Commissions (SERCs) to to specify a percentage of the total consumption of electricityspecify a percentage of the total consumption of electricityspecify a percentage of the total consumption of electricityspecify a percentage of the total consumption of electricityin the area of a distribution licensee, for purchase of in the area of a distribution licensee, for purchase of electricity from coelectricity from co--generation and renewable energy generation and renewable energy sources (renewable portfolio obligation) (Sec. 81 (1) (e)).sources (renewable portfolio obligation) (Sec. 81 (1) (e)).

•• SERCs to promote coSERCs to promote co--generation and generation of generation and generation of electricity through renewable sources of energy by electricity through renewable sources of energy by providing suitable measures forproviding suitable measures for connectivity with the gridconnectivity with the gridproviding suitable measures for providing suitable measures for connectivity with the grid connectivity with the grid and sale of electricity to any personsand sale of electricity to any persons (Sec. 81 (1) (e)).(Sec. 81 (1) (e)).

•• Terms and conditions for the Terms and conditions for the determination of tariffdetermination of tariff to be to be prescribed by the SERCs to promote coprescribed by the SERCs to promote co--generation and generation and generation of electricity from renewable sources of energy. generation of electricity from renewable sources of energy. (Sec. 61 (h))(Sec. 61 (h))

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Electricity Act 2003 and Policy Framework Electricity Act 2003 and Policy Framework for Renewable Energy (Contd.)for Renewable Energy (Contd.)

•• National Electricity Policy to be formulated by the National Electricity Policy to be formulated by the central government, in consultation with the statecentral government, in consultation with the statecentral government, in consultation with the state central government, in consultation with the state governments for development of the power system governments for development of the power system based on based on optimal utilization of resources including optimal utilization of resources including renewable sources of energyrenewable sources of energy. (Sec. 3 (1)). (Sec. 3 (1))

•• Central Government to prepare a national policy, in Central Government to prepare a national policy, in l i i h h S Gl i i h h S Gconsultation with the State Governments, consultation with the State Governments,

permitting stand alone systemspermitting stand alone systems (including those (including those based on renewable sources of energy and other based on renewable sources of energy and other nonnon--conventional sources of energy) for rural areas. conventional sources of energy) for rural areas. (Sec. 4) (Sec. 4)

RPO and its Compliance Across RPO and its Compliance Across States (in %)States (in %)

States

RPO Targets RPO Performance

2007-082008-

092009-

10 2010-11 2011-12 2007-08 2008-092009-

10A dhAndhraPradesh#$ 5 5 5 5 5 4.41 3.95 4.06Bihar@ 4 5 6 NADelhi 1 1 1 1 --- --- ---Gujarat 1 2 2 2.07 NA 2.55Haryana 3 5 10 10 10 NA 0.01 5.7

Karnataka 7-10 7-10 7-10 9.83 10.80 11.04Madhya Prad. 10 10 10 10 0.08 0.07 0.06Maharashtra$ 4 5 6 3 35 3 36 4 25Maharashtra$ 4 5 6 3.35 3.36 4.25Orissa 3 3 4 0 0 1.26Punjab 1 1 2 3 4 0.69 0.74 1.49Rajasthan$ 4.88 6.25 7.45 8.50 9.75 2.57 4.90 3.23Tamil Nadu 10 10 11.65 12.08 13.79Uttaranchal 5 5 8 9 10 1.4 1.7 2.18Uttar Pradesh 7.5 7.5 7.5 1.26 2.98 2.97

West Bengal 0.95-3.8 2-4.8 4-6.8 7-8.3 10 NA 0-0.37 0-0.34

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Discontinuity in prices in the demand Discontinuity in prices in the demand functionfunction

Feed-in-Tariff and Shortfall in RPO Compliance

Wind Energy Tariff Across StatesWind Energy Tariff Across States

4.3Av. Tariff for Wind Energy

37)

4) esh (3.97)

3.5)

.65)

gal (4)

4.08)3.3

3.5

3.7

3.9

4.1

(Rs. / kWh)  

Andhra Prad. (3.3

Gujarat (3.37)

Karnataka (3.4

Kerala (3.14)

Madhya Prade

Maharsthra (3

Rajasthan

 (3.

TN (2.9) West Beng

Haryana (4

2.5

2.7

2.9

3.1

1 2 3 4 5 6 7 8 9 10

(

20

ChallengesChallenges

•• Economic Efficiency of existing policiesEconomic Efficiency of existing policiesEconomic Efficiency of existing policies Economic Efficiency of existing policies

•• States have different resource endowments and States have different resource endowments and some have very limited ones (e.g. Delhi)some have very limited ones (e.g. Delhi)

•• How to How to incentiviseincentivise renewable resources in renewable resources in remote areas not connected with grid?remote areas not connected with grid?gg

Jawaharlal Nehru National Solar Jawaharlal Nehru National Solar Mission (JNNSM)Mission (JNNSM)

•• One of the 8 national missions under the National One of the 8 national missions under the National Action Plan on Climate Change (NAPCC), which Action Plan on Climate Change (NAPCC), which was launched on June 30, 2008.was launched on June 30, 2008.

•• About 5,000 trillion kWh per year solar energy is About 5,000 trillion kWh per year solar energy is incident over India’s land area. In most parts, solar incident over India’s land area. In most parts, solar incidence ranges 4incidence ranges 4--7 kWh per 7 kWh per sq.msq.m per day.per day.

•• NAPCCNAPCC National level target for RE Purchase mayNational level target for RE Purchase may•• NAPCC NAPCC -- National level target for RE Purchase may National level target for RE Purchase may be set at 5% of total grid purchase for FY 2010. This be set at 5% of total grid purchase for FY 2010. This could be increased by 1% each year for the next 10 could be increased by 1% each year for the next 10 years.years.

21

JNNSM RoadmapJNNSM Roadmap

National Mission on Enhanced Energy National Mission on Enhanced Energy Efficiency (NMEEE)Efficiency (NMEEE)

Mission Goals Mission Goals –– (by 2014(by 2014--15)15)( y( y ))•• Annual fuel savings in excess of 23 million toeAnnual fuel savings in excess of 23 million toe•• Cumulative avoided electricity capacity addition of Cumulative avoided electricity capacity addition of

19,000 MW19,000 MW•• CO2 emission mitigation of 98 million tons per yearCO2 emission mitigation of 98 million tons per year

MarketMarket--based approaches to unlock energy efficiency based approaches to unlock energy efficiency opportunities, estimated to be about Rs. 74,000 opportunities, estimated to be about Rs. 74,000 crorescrores..

22

NMEEE NMEEE -- MandateMandate

•• Perform Achieve and Trade (PAT) Perform Achieve and Trade (PAT) -- A market based A market based ( )( )mechanism to enhance cost effectiveness of improvements in mechanism to enhance cost effectiveness of improvements in energy efficiency in energyenergy efficiency in energy--intensive large industries and intensive large industries and facilities, Tradable certificates of energy savings. facilities, Tradable certificates of energy savings.

•• Market Transformation for Energy Efficiency Market Transformation for Energy Efficiency -- Energy Energy efficient appliances in designated sectorsefficient appliances in designated sectors

•• Energy Efficiency Financing PlatformEnergy Efficiency Financing Platform -- Creation ofCreation ofEnergy Efficiency Financing Platform Energy Efficiency Financing Platform Creation of Creation of mechanisms to help finance demand side management mechanisms to help finance demand side management programmesprogrammes in all sectors.in all sectors.

•• Framework for Energy Efficient Economic Development Framework for Energy Efficient Economic Development --Developing fiscal instruments to promote energy efficiency.Developing fiscal instruments to promote energy efficiency.

What influences economics of What influences economics of Renewable Energy SourcesRenewable Energy Sources

•• High capital costHigh capital costHigh capital costHigh capital cost

•• Low capacity Low capacity utilisationutilisation

•• Weather risk (instead of fuel risk)Weather risk (instead of fuel risk)

•• Evolving technologyEvolving technology

•• Grid integrationGrid integration•• Grid integrationGrid integration

•• Increasing land prices and land squattingIncreasing land prices and land squatting

23

Road AheadRoad Ahead

•• Energy EfficiencyEnergy Efficiency –– Low hanging fruit and noLow hanging fruit and noEnergy Efficiency Energy Efficiency Low hanging fruit and no Low hanging fruit and no regret optionregret option

•• Renewable Energy Renewable Energy –– Road to Energy security Road to Energy security but some technical challengesbut some technical challenges

•• Policy and Regulatory Environment need to Policy and Regulatory Environment need to y g yy g yprovide incentive for adoption of clean and provide incentive for adoption of clean and efficient technology in the energy sector.efficient technology in the energy sector.

Thank YouThank You

www.iitk.ac.in/ime/anoopswww.iitk.ac.in/ime/anoops

anoops@iitk.ac.inanoops@iitk.ac.in

24

Courses, Workshops and ConferencesCourses, Workshops and Conferences

•• Short Term Course “Challenges and Implementation Short Term Course “Challenges and Implementation g pg pIssues post Electricity Act 2003: Regulatory, Policy & Issues post Electricity Act 2003: Regulatory, Policy & Technical Solutions”, 10Technical Solutions”, 10--14 April, 200414 April, 2004

•• International Conference on “Power Market International Conference on “Power Market Development in India: Reflections from International Development in India: Reflections from International Experience” 19Experience” 19--21 April 200521 April 2005Experience , 19Experience , 19 21 April, 2005 21 April, 2005

•• National Workshop on “Project Financing for Energy National Workshop on “Project Financing for Energy and Infrastructure Sector”, April 19and Infrastructure Sector”, April 19--22, 2007 22, 2007

Courses, Workshops and Conferences Courses, Workshops and Conferences (contd.)(contd.)

•• 22ndnd National Workshop on “Project Financing for Energy National Workshop on “Project Financing for Energy p j g gyp j g gyand Infrastructure Sector”, April 24and Infrastructure Sector”, April 24--27, 200827, 2008

•• Capacity Building Capacity Building ProgrammeProgramme for Officers of Electricity for Officers of Electricity Regulatory Commissions, 30th June Regulatory Commissions, 30th June -- 5th July, 20085th July, 2008

•• 2nd Capacity Building Programme for Officers of 2nd Capacity Building Programme for Officers of Electricity Regulatory Commissions, 3Electricity Regulatory Commissions, 3--8 August, 20098 August, 2009

•• 33rdrd Capacity Building Programme for Officers of Capacity Building Programme for Officers of Electricity Regulatory Commissions, 23Electricity Regulatory Commissions, 23--28 August, 201028 August, 2010

•• 44thth Capacity Building Programme for Officers of Capacity Building Programme for Officers of Electricity Regulatory Commissions, 18Electricity Regulatory Commissions, 18--23 July, 201123 July, 2011

•• Energy Conclave 2010, 8Energy Conclave 2010, 8--15 Jan. 201015 Jan. 2010