26941042 wind power sector in india

8/9/2019 26941042 Wind Power Sector in India

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WIND POWER SECTOR IN INDIA 2010W

By Vijay Chander Keesara

Cont: +91-9392 777 444+91-9959 777 444

e-mail: [email protected]

Contents

WIND B Y V I J A Y C H A N D E R K E E S A R A

61




1. Introduction

Some facts

Indian Power Industry

Industry Structure

Statistics of the scenario in India

Policy

Players in the Industry

2. Government Regulations and policies

Electricity Act 2003Impact on the Industry

National Electricity Policy

Tariff Policy

Features of the Policy

Recent developments

Norms Rationalised3. Role of Institutional Players

Central Government

State Government

Central Electricity Authority

Central Electricity Regulatory Commission

State Electricity Regulatory Commission

National Load Dispatch Centre

4. Wind energy basics

What is Wind Energy?

What is a wind Turbine?

5. Growth Potential


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6. Nuclear Power Generation

7. Investments

Strengths

WeaknessesOpportunities

Threats

Looking Ahead

8. Impact of Budget 2008-2009

Impact on Sector

Impact on Companies

9. Predictions10. Government Initiatives

11. Investment Plans of Corporates

12. Valuations

13. Design of Wind Mill Tower

14. Block diagram of Wind Power Generation

15. Energy Scenario in India

Present State and future potential for Wind Energy

generation in India

Wind Resource Potential

Promotional Policies and New Initiatives for

development of Wind Power

From Central Government

From State government

16. Wind Power generator manufacturing technology

available in India

17. Barriers in Wind Power development

18. Need of the Hour


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19. Investment components of project for installation

of wind energy generators having an installed capacity

of 1.00 MW

Land, Layout Plan and site development

requirement

Civil construction

Plant and machinery

Electrical

Infrastructure development and Miscellaneous

charges

Project CostMarketing

Insurance

Eligibility of the Borrowers

Repayment

Interest rate for the ultimate borrowers

Interest rate for refinance from NABARDSecurity

20. IREDA’s Financing guidelines for Wind energy

Projects

21. What is a Project Finance

Deal Structure

Typical Deal Parameters

Experience22. The Economics of Wind Power

Three Main Factors Affecting Cost

Installation cost

Operating and maintenance cost


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Windiness of the Site

Calculations

Total Annual Cost

Cost per Kilo Watt Hour

Other Economic Factors

23. Trends Influencing the cost of wind power

24. Operation and Maintenance cost of wind

generated power

25. Future Evolution of the cost of wind generated

power

26. State wise Wind power installation capacities

across India27. Growth of wind Power Installed Capacity

28. Central Incentives

29. Policies Introduced/Incentives declared by the

state governments for Private sector Wind Power

projects

30. Estimated Wind power potential India (State Wise)

31. Abstract of wind Monitoring Stations in India

32. State wise list of Wind monitoring stations forwhich Micro Survey has been done

33. Service Providers

Operation and maintenance (O&M)Agencies

WEG erecting Contractors

Crane Hiring Agencies

Civil Contractors

Electrical Contractors

Component repairs (other than O&M)

Insurance Companies (Surveyors & Valuers)

Consultants


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Financial Institutions

Associations and Societies

34. List of Private wind Farm owners (10 MW and

above ) as of 31-03-2008

35. State wise communication addresses (official)

36. Conclusions

ANNEXURE – I

Project on Installation of Wind energy generators

for Captive use

Detailed project Cost (for 1.00 MW)

ANNEXURE – II

Wind Power density MAP

Wind Resource MAP

Wind Power cumulative capacity MAP

Major Power transmission Locating MAP

Energy Crisis Map

ANNEXURE –III

Comparisons Between Conventional energy and

Wind Power

Power is an essential requirement for all facets of our lifeand has been recognized as a basic human need. It is thecritical infrastructure on which the socio-economicdevelopment of the country depends. The growth of theeconomy and its global competitiveness hinges on the


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availability of reliable and quality power at competitiverates. The demand of power in India is enormous and isgrowing steadily. The vast Indian power market, today offersone of the highest growth opportunities for private

developers.India is endowed with a wealth of rich natural resources andsources of energy. Resources for power generation areunevenly dispersed across the country. This can beappropriately and optimally utilized to make availablereliable supply of electricity to each and every household.Electricity is considered key driver for targeted 8 to 10%economic growth of India. Electricity supply at globallycompetitive rates would also make economic activity in the

country competitive in the globalized environment.

As per the Indian Constitution, the power sector is aconcurrent subject and is the joint responsibility of the Stateand Central Governments. The power sector in India isdominated by the government. The State and CentralGovernment sectors account for 58% and 32% of thegeneration capacity respectively while the private sectoraccounts for about 10%. The bulk of the transmission and

distribution functions are with State utilities. The privatesector has a small but growing presence in distribution andis making an entry into transmission. Power Sector whichhad been funded mainly through budgetary support andexternal borrowings was opened to private sector in 1991.

SOME FACTS

• More than 64% of India’s total installed capacity is

contributed by thermal power. Significant jump in unit


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size and steam parameters will result in higher

efficiencies and better economics for the Indian power

sector.

• Western region accounts for largest share (30.09%) of

the installed power in India followed by Southern region

with 27.76%.

• Unbalanced growth remains the cause of concern for

the Indian power sector. Only about 56% of households

have access to electricity, with the rural access being44% and urban access about 82%.

• Southern region remains the dominant region in

renewable energy source accounting for more than

57% of the total renewable energy installed capacity.

Indian Power Industry

Growth of Power Sector infrastructure in India since itsIndependence has been noteworthy making India the thirdlargest producer of electricity in Asia. Generating capacity

has grown manifold from 1,362 MW in 1947 to 141GW (as on30.09.2004). The overall generation in India has increased

from 301 Billion Units (BUs) during 1992- 93 to 558.1 BUs in2003.India’s Total installed capacity of power sector has


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been 141 GW. This India’s 141GW of total power isgenerated by its three different sectors, i.e., state sector,

central sector and private sector. Stare sector contributionhas been 53% to total installed capacity. Likewise,

contribution of central sector and private sector has been34% and 13.5% respectively.

Industry Structure

Power sector structure in India has been very simple yet welldefined. Majority of Generation, Transmission andDistribution capacities are with either public sector


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companies or with State Electricity Boards (SEBs). Nationalthermal power corporation, Nuclear Power Corporation,National Hydro Electric Power Corporation are the publicsector companies in India which are into power generation.

TATA power, Reliance Energy is domestic private playersand CLP, Marubeni Corporation is international privateplayers in power sector. public sector is only powergeneration. Private sector participation is increasingespecially in Generation, transmission and Distribution.Distribution licences for several cities are already with theprivate sector. Three large ultra-mega power projects of 4000MW each have been recently awarded to the privatesector on the basis of global tenders.

STATISTICS OF THE SCENARIO IN INDIA

Year ENERGY(MU) PEAK(MW)

Requirement

Availability

%Shortag

e

Demand

Met %Shortage

2002-03

5,45,674 4,97,589 8.8 81,492 71,547

12.2

2003-04

5,59,264 5,19,398 7.1 84,574 75,066

11.2

2004-05

5,91,373 5,48,115 7.3 87,906 77,652

11.7

2005-

06

6,31,554 5,78,819 8.4 93,255 81,79

2

12.3

2006-07

6,90,587 6,24,495 9.6 1,00,715

86,818

13.8

2007-08

7,39,345 6,66,007 9.9 1,08,866

90,793

16.6

Source: Ministry of Power


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POLICY Indian Power Policy framework is designed and developedunder Electricity Act 2003 and National Electricity Policy2005. Under current policy the Government is keen to drawprivate investment into the sector.100% FDI permitted inGeneration, Transmission & Distribution of power and nodiscrimination is made in terms of foreign private anddomestic private players. All the companies (domestic andprivate) in this particular sector are treated at par.Incentives like, Income tax holiday for a block of 10 years inthe first 15 years of operation; waiver of capital goods'import duties on mega power projects (above 1,000 MW

generation capacity) is being provided. IndependentRegulators that exist in Indian power sector are a) CentralElectricity Regulatory Commission for central PSUsB)centreal electricity regulatory commission for inter-stateissue.


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PLAYERS IN TNE INDUSTRY

Above table depicts that NTPC has got highest installedcapacity (29144MW) in the public sector. Secondly, all threeplayers in the public sector have restricted their businessonly to power generation. In domestic private sector, TATAPower is the biggest player with installed capacity of 2323MW. All the major domestic private players are in togeneration transmission and distribution of power exceptRPG group which is not in to power transmission.

WIND

MAJOR

PLAYERS

CAPACITY GEN. TRANS. DIST.

PUBLICSECTORNTPC 29144(MW)

NHEPC 2755(MW)

NPC 1412(MW)

DOMESTICPRIVATESECTOR

TATA power 2323(MW) RPG group 975(MW)

Relianceenergy

941(MW)

INRERNATIONAL PRIVATESECTORCLP 655(MW)

MC 347(MW)

B Y V I J A Y C H A N D E R K E E S A R A

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,NPC-Nuclear NTPC-National Thermal Power Corporation, NHEPC-National Hydro Electric Power Corporation Power Corporation,

CLP- China Light and Power, MC-Marubeni Corporation




GOVERNMENT REGULATIONS AND POLICIES

Electricity Act 2003

The Electricity Act enacted in year 2003 has created a newparadigm for the development of power sector in India. Ithas abolished monopoly of the State Electricity Boardcreated under the Electricity (Supply) Act 1948 and hascreated a new competitive framework for the developmentof the power sector in India with focus on the consumers andsafeguarding their interests by independent RegulatoryCommissions. The Act has eliminated/reduced entry barriersin the entire chain of the electricity supply business. It marksthe culmination of the process beginning in the mid ninetiesof States enacting their own Reform Acts and the enactmentof the Electricity Regulatory Commission Act of 1998 which

brought into place the Central Electricity RegulatoryCommission and authorized the state to create RegulatoryCommissions at State level, if they wished to do so.

The Act has made structural change in the marketwith single-buyer model to multi-buyer model movingthe market to the competitive phase

Open Access in Transmission is allowed right from the dateof promulgation of the act. Central Electricity RegulatoryCommission (CERC) has already notified regulations on non-discriminatory open access in transmission. Open access indistribution for the consumer consuming more than 1 MW of power allowed after January 2009.

The Electricity Act 2003 addresses concerns of all theplayers in the power sector and sets up a framework for


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development of a competitive, efficient, economically viableand consumer friendly power sector in India.

IMAPCT ON THE INDUSTRY

• No restriction on captive generation

• Multi buyer model

• Reduce lead time

• Reduce financial and regulatory risk

• Balance inter region disparities in power abilities

• Private captive investment allowed

• Open access

• No monopoly over consumers

• Parallel distribution network allowed

• Encourage competition

• National Electricity Policy

The National Electricity Policy has been notified by theCentral Government on January 2005 under the ElectricityAct 2003 to set direction of development of the Power

Sector. Apart from the salient features mentioned above, thepolicy sets momentum in following areas:

• Full development of hydro potential in India• Choice of fuel for thermal generation to be based on

economics of generation and supply of electricity• Development of national grid• Availability Based Tariff (ABT) to be extended to state

level•

All India transmission tariff sensitive to distance anddirection to be introduced by the Central Commission


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• Tariff Policy

Tariff Policy has been notified by the Central Governmentunder the Electricity Act 2003 to set clear methodologyand principles for determining tariff by the RegulatoryCommissions and to remove the Regulatory Risks for thevarious players in the Sector. The policy has addressedcritical issues of uncertainty like computation of crosssubsidy surcharge, agricultural tariff and Multi-Year-Tariff.

FEATURES OF THE POLICY

• Tariff of all generation and transmission projects inprivate sector by competitive bidding-public sector to

compete in five years• Reduction of cross subsidy to +-20% in next fiveyears

• Emphasis on distribution level open access; clearcomputation of cross subsidy surcharge

• Transmission tariff sensitive to direction anddistance

• Strict implementation of performance standards

• Agricultural tariff to encourage sustainable use of

ground water• Time bound introduction of Multi-Year-Tariff structure

RECENT DEVELOPMENTS

The Central Electricity Regulatory Committee (CERC) hasissued a new notification that deals with the tariff computation for the years 2009-10 to 2013-14

NORMS RATIONALISED


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• Return on equity (RoE) raised from 14 to 15.5 per

cent

• Provision of additional RoE of 0.5 per cent for

projects commissioned on schedule.

RoE to be computed post-tax.

• Advance against depreciation removed,

depreciation rates increased to 5.28 per cent from

3.6 per cent.

• Incentive payment linked to availability rather

than plant load factor

ROLE OF INSTITUTIONAL PLAYERS

• Central Government

• Formulate National Electricity Policy and National

Tariff Policy

• Formulate national policy on stand alone systems

• Formulate national policy on Rural Electrification

• Make Rules & Procedure for implementing

provisions of Electricity Act 2003

• Appoint Chairpersons& other members of CEA

• State Government


1




• Assist Central Govt. in formulating National

Electricity Policy, Tariff Policy, etc



• Form SLDCs for optimal scheduling & dispatch forthe power systems



• Central Electricity Authority

•

Advice Central Government on matters relating toNational Electricity Policy

• Advice appropriate government on technical

matters related to electrical systems

• Formulate plans for optimal utilization of resources

in accordance with National Electricity policy

• Central Electricity Regulatory Commission• Fix tariff for generating stations either owned by

central government or having sales in more than

one state

• Regulate inter-state transmission tariff & fix

trading margin

• Grant of licenses for interstate transmission &

trading


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• State Electricity Regulatory Commission

• Fix tariff for generation, Supply, transmission

& wheeling within the state

• Fix Cross Subsidy Surcharge when open access

is allowed

• Fix trading margin for intra-state operations

• Grant of licenses for intrastate transmission &

trading

• Advice the State Govt. on policy matters

•

National Load Dispatch Centre• Interface with all the five Regional Load Dispatch

Centre’s (RLDCs) that are operational at present

to acquire real-time data to continuously monitor

integrated operation of the proposed National Grid

• To ensure optimal Scheduling & Dispatch among

the RLDCs

Wind Energy Basics:

What is wind energy?In reality, wind energy is a converted form of solar energy.

The sun's radiation heats different parts of the earth atdifferent rates-most notably during the day and night, but


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also when different surfaces (for example, water and land)absorb or reflect at different rates. This in turn causesportions of the atmosphere to warm differently. Hot air rises,reducing the atmospheric pressure at the earth's surface,

and cooler air is drawn in toreplace it. The result is wind.

Air has mass, and when it is in motion, it contains the energyof that motion ("kinetic energy"). Some portion of thatenergy can convert into other forms mechanical force orelectricity that we can use to perform work.

What is a wind turbine and how does it work?A wind energy system transforms the kinetic energy of the

wind into mechanical or electrical energy that can beharnessed for practical use. Mechanical energy is mostcommonly used for pumping water in rural or remotelocations- the "farm windmill" still seen in many rural areas of the U.S. is a mechanical wind pumper - but it can also beused for many other purposes (grinding grain, sawing,pushing a sailboat, etc.). Wind electricturbines generate electricity for homes and businesses andfor sale to utilities.

There are two basic designs of wind electric turbines:vertical-axis, or "egg-beater" style, and horizontal-axis(propeller-style) machines. Horizontal-axis wind turbines aremost common today, constituting nearly all of the "utility-scale" (100 kilowatts, kW, capacity and larger) turbines in theglobal market.

Turbine subsystems include:

i. A rotor, or blades, which convert the wind's energy intorotational shaft energy; •

ii. A nacelle (enclosure) containing a drive train, usuallyincluding a gearbox*

iii. A Generatoriv. A tower, to support the rotor and drive train


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v. Electronic equipment such as controls, electricalcables, ground support equipment, and interconnectionequipment

*Some turbines do not require a gearboxWind turbines vary in size. This chart depicts a variety of historical turbine sizes and the amount of electricity they areeach capable of generating (the turbine's capacity, or power

rating).1981 1985 1990 1996 1999

2000 Rotor (meters) 10 17 27 40 50

71Rating (KW) 25 100 225 550 7501,650


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Annual MWh 45 220 550 1,4802,200 5,600

The electricity generated by a utility-scale wind turbine is

normally collected and fed into utility power lines, where it ismixed with electricity from other power plants and deliveredto utility customers.

What is wind turbines made of? The towers are mostly tubular and made of steel. The bladesare made of fiberglass-reinforced polyester or wood-epoxy.

How big is a wind turbine?Utility-scale wind turbines for land-based wind farms come invarious sizes, with rotor diameters ranging from about 50meters to about 90 meters, and with towers of roughly thesame size. A 90-meter machine, definitely at the large end of the scale at this writing,with a 90-meter tower would have a total height from the


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tower base to the tip of the rotor of approximately 135meters (442 feet).

Offshore turbine designs are under further development and

will have larger rotors—at the moment, the largest has a110-meter rotor diameter—because it is easier to transportlarge rotor blades by ship than by land.

Small wind turbines intended for residential or small businessuse are much smaller. Most have rotor diameters of 8 metersor less and would be mounted on towers of 40 meters inheight or less.

How much electricity can one wind turbine generate?

The ability to generate electricity is measured in watts. Wattsare very small units, so the terms kilowatt (kW, 1,000 watts),megawatt (MW, 1 million watts), and gigawatt (pronounced"jig-a-watt," GW, 1 billion watts) are most commonly used todescribe the capacity of generating units like wind turbinesor other power plants.

Electricity production and consumption are most commonlymeasured in kilowatt-hours (kWh). A kilowatt-hour means

one kilowatt (1,000 watts) of electricity produced orconsumed for one hour. One 50-watt light bulb left on for 20hours consumes one kilowatt-hour of electricity (50 watts x20 hours = 1,000 watt-hours = 1 kilowatt-hour) .

The output of a wind turbine depends on the turbine's sizeand the wind's speed through the rotor. Wind turbines beingmanufactured now have power ratings ranging from 250watts to 5 megawatts (MW).

Example: A 10-kW wind turbine can generate about 10,000kWh annually at a site with wind speeds averaging 12 milesper hour, or about enough to power a typical household.A 5-MW turbine can produce more than 15 million kWh in ayear--enough to power more than 1, 400 households. Theaverage U.S. household consumes about 10,000 kWh of


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electricity each year.

Example: A 250-kW turbine installed at the elementaryschool in Spirit Lake, Iowa, provides an average of 350,000kWh of electricity per year, more than is necessary for the53,000-square-foot school. Excess electricity fed into thelocal utility system earned the school $25,000 in its first fiveyears of operation. The school uses electricity from the utilityat times when the wind does not blow. This project has beenso successful that theSpirit Lake school district has since installed a second turbinewith a capacity of 750 kW.

Wind speed is a crucial element in projecting turbineperformance, and a site's wind speed is measured throughwind resource assessment prior to a wind system'sconstruction. Generally, an annual average wind speedgreater than four meters per second (m/s) (9 mph) isrequired for small wind electric turbines (less wind is requiredfor water-pumping operations). Utility-scale wind powerplants require minimum average

wind speeds of 6 m/s (13 mph). The power available in the wind is proportional to the

cube of its speed, which means that doubling the wind speedincreases the available power by a factor of eight. Thus, aturbine operating at a site with an average wind speed of 12mph could in theory generate about 33% more electricitythan one at an 11-mph site, because the cube of 12 (1,768)is 33% larger than the cube of 11 (1,331). (In the real world,the turbine will not producequite that much more electricity, but it will still generatemuch more than the 9% difference in wind speed.) Theimportant thing to understand is that what seems like a smalldifference in wind speed can mean a large difference inavailable energy and in electricity produced, and therefore, alarge difference in the cost of the electricity generated. Also,there is little energy to be harvested at very low wind speeds


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(6-mph winds contain less than one-eighth the energy of 12-mph winds).

How many turbines does it take to make one

megawatt (MW)?Most manufacturers of utility-scale turbines offer machines inthe 700-kW to 2.5-MW range. Ten 700-kW units would makea 7-MW wind plant, while 10 2.5-MW machines would make a25-MW facility. In the future, machines of larger size will beavailable, although they will probably be installed offshore,where larger transportation and construction equipment canbe used. Units up to 5 MW in capacity are now underdevelopment.

How many homes can one megawatt of wind energysupply?An average U.S. household uses about 10,655 kilowatt-hours(kWh) of electricity each year. One megawatt of wind energycan generate from 2.4 to more than 3 million kWh annually.

Therefore, a megawatt of wind generates about as muchelectricity as 225 to 300 households use. It is important tonote that since the wind does not blow all of the time, itcannot be the only power source for that many households

without some form of storage system. The "number of homes served" is just aconvenient way to translate a quantity of electricity into afamiliar term that people can understand. (Typically, storageis not needed, because wind generators are only part of thepower plants on a utility system, and other fuel sources areused when the wind is not blowing. )

What is a wind power plant? The most economical application of wind electric turbines isin groups of large machines (660 kW and up), called "windpower plants" or "wind farms."Wind plants can range in size from a few megawatts tohundreds of megawatts in capacity. Wind power plants are"modular," which means they consist of small individualmodules (the turbines) and can easily be made larger or


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smaller as needed. Turbines can be added as electricitydemand grows. Today, a 50-MW wind farm can be completedin18 months to two years. Most of that time is needed for

measuring the wind and obtaining construction permits—thewind farm itself can be built in less than six months.

What is "capacity factor"?Capacity factor is one element in measuring the productivityof a wind turbine or any other power production facility. Itcompares the plant's actual production over a given period of time with the amount of power the plant would haveproduced if it had run at full capacity for the same amount of time.

A conventional utility power plant uses fuel, so it willnormally run much of the time unless it is idled by equipmentproblems or for maintenance. A capacity 0factor of 40% to80% is typical for conventional plants.

A wind plant is "fueled" by the wind, which blows steadily attimes and not at all at other times. Although modern utility-scale wind turbines typically operate 65% to 90% of the time,

they often run at less than full capacity. Therefore, a capacityfactor of 25% to 40% is common, although they may achievehigher capacity factors during windy weeks or months.It is important to note that while capacity factor is almostentirely a matter of reliability for a fueled power plant, it isnot for a wind plant—for a wind plant, it is a matter of economical turbine design. With a very large rotor and a verysmall generator, a wind turbine would run at full capacitywhenever the wind blew and would have a 60-80% capacityfactor—but it would produce very little electricity. The mostelectricity per dollar of investment is gained by using a largergenerator and accepting the fact that the capacity factor willbe lower as a result. Wind turbines are fundamentallydifferent from fueled power plants in this respect.

If a wind turbine's capacity factor is 33%, doesn't that


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The three examples above are for costs per kilowatt-hour for

a 51 MW wind farm at three different average wind speedsexpressed in meters per second. Cost figures include thecurrent wind production tax credit.

Improvements in turbine design bring down costs. Thetaller the turbine tower and the larger the area swept by theblades, the more powerful and productive the turbine. Theswept area of a turbine rotor (a circle) is a function of thesquare of the blade length (the circle’s radius).

Therefore, a fivefold increase in rotor diameter (from 10meters on a 25-kW turbine like those built in the 1980s to 50meters on a 750-kW turbine common today) yields a 55-foldincrease in yearly electricity output, partly because theswept area is 25 times larger .and partly because the towerheight has increased substantially, and wind speeds increasewith distance from the ground. Advances in electronicmonitoring and controls, blade


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A large wind farm is more economical than a small one. Assuming the same average wind speed of 18 mph and

identical wind turbine sizes, a 3–MW wind project deliverselectricity at a cost of Rs 2.60 per kWh and a 51-MW projectdelivers electricity at Rs 1.60 per kWh— a drop in costs of Rs 1.00 or nearly 40% . Any project has transaction coststhat can be spread over more kilowatt-hours with a largerproject. Similarly, a larger project has lower O&M (operationsand maintenance) costs per kilowatt-hour because of theefficiencies of managing a larger wind farm.

Optimal configuration of the turbines to take the bestadvantage of micro-features on the terrain will also improvea project's productivity.

Current Status of Wind Energy MarketIn order to understand the available business opportunity in

the wind energy market we need to initially access theexisting global wind energy market and determine futuregrowth areas in various subcontinents globally


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Global Wind Energy SectorSalient features

Worldwide capacity reaches 121,188 MW, out of which27,261 MW were added in 2008.Wind energy continued its growth in 2008 at an increased

rate of 29 %.All wind turbines installed by the end of 2008 worldwide are

generating 260 TWh per annum, equaling more than 1.5 % of the global electricity consumption.

The wind sector became a global job generator and hascreated 440,000 jobs worldwide. The wind sector represented in 2008 a turnover of 40 billion

Euros.For the first time in more than a decade, the USA took over

the number oneposition from Germany in terms of total installations.China continues its role as the most dynamic wind market in

the year 2008, more than doubling the installations for thethird time in a row, with today more than 12 GW of windturbines installed.

North America and Asia catch up in terms of newinstallations with Europe which shows stagnation.

Based on accelerated development and further improved


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policies, a globalcapacity of more than 1,500,000 MW is possible by the year2020.General Situation:

Wind energy has continued the worldwide success story asthe most dynamically growing energy source again in theyear 2008. Since 2005, global wind installations more thandoubled. They reached 121,188 MW, after 59,024 MW in2005, 74,151 MW in 2006, and 93,927 MW in 2007. Theturnover of the wind sector worldwide reached 40 billion inthe year 2008. The market for new wind turbines showed a42 % increase and reached an overall size of 27,261 MW,after 19,776 MW in 2007 and 15,127 MW in the year 2006.

Ten years ago, the market for new wind turbines had a sizeof 2,187 MW, less than one tenth of the size in 2008. Incomparison, no new nuclear reactor started operation in2008, according to the International Atomic Energy Agency.

Wind energy as an answer to the global crisis:In light

of thethreefold

globalcrisismankindis facingcurrently– theenergycrisis,thefinancecrisisand theenvironment/climate crisis – it is becoming more and moreobvious that wind energy offers solutions to all of these hugechallenges, offering a domestic, reliable, affordable and cleanenergy supply. At this point of time it is difficult to predict the


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short-term impacts of the credit crunch on investment inwind energy. However, currently smaller projects understable policy frameworks like well-designed feed-in tariffs areless affected by the credit crunch than higher-risk

investments e.g. in large offshore wind farms or underunstable political frameworks and in countries which are seenas not offering sufficient legal stability.

Wind energy as a low-risk investment

In the mid to long term it is clear that wind energyinvestments will rather be strengthened due to their low-riskcharacter and societal and additional economic benefits.Investment in a wind turbine today means that the electricitygeneration cost are fixed to the major extend over thelifetime of the wind turbine. Wind energy implies noexpenses on fuel and operation and maintenance costs are

usually well predictable and rather marginal, in relation tothe overall investment.

Employment: Wind energy as job generator

One fundamental advantage of wind energy is that itreplaces expenditure on mostly imported fossil or nuclear


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energy resources by human capacities and labor. Windenergy utilization creates many more jobs than centralized,non-renewable energy sources. The wind sector worldwidehas become a major job generator: Within only three years,

the wind sector worldwide almost doubled the number of jobsfrom 235,000 in 2005 to 440,000 in the year 2008. These440,000 employees in the wind sector worldwide, mostof them highly skilled jobs, are contributing to the generationof 260 TWh of electricity.

Future prospects worldwide

Based on the experience and growth rates of the past years,it is expected that wind energy will continue its dynamic

development also in thecoming years. Although the short term impacts of the currentfinance crisis makes short-term predictions rather difficult, itcan be expected that in the mid-term wind energy will ratherattract more .investors due to its low risk character and theneed for clean and reliable energy sources. More and moregovernments understand the manifold benefits of windenergy and are setting up favorable policies, including thosethat are stimulation decentralized investment by

independent power producers, small and medium sizedenterprises and community based projects, all of which willbe main drivers for a more sustainable energy system also inthe future. Carefully calculating and taking into accountsome insecurity factors, wind energy will be able tocontribute in the year 2020 at least 12 % of global electricityconsumption. By the year 2020, at least 1,500,000 MW canbe expected to be installed globally. A recently publishedstudy by the Energy Watch Group reveals – as one out of fourdescribed scenarios – that by the year 2025 it is even likelyto have 7,500,000 MW installed worldwide producing 16,400

TWh. All renewable energies together would exceed 50 % of the global electricity supply. As a result, wind energy, alongwith solar, would conquer a 50 % market share of new powerplant installations worldwide by 2019. Global non-renewablepower generation would peak in 2018 and could be phased


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out completely by 2037.

Continental Scenarios:

In terms of continental distribution, a continuousdiversification process can be watched as well: In general,the focus of the wind sector moves away from Europe to Asiaand North America. Europe decreased its share in totalinstalled capacity from 65.5 % in 2006 .to 61 % in the year

2007 further down to 54.6 % in 2008. Only four years agoEurope dominated the world market with 70.7 % of the newcapacity. In 2008 the continent lost this position and, for the


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first time, Europe (32.8 %), North America (32.6 %) and Asia(31.5 %) account for almost similar shares in new capacity.However, Europe is still the strongest continent while NorthAmerica and Asia are increasing rapidly their shares. The

countries in Latin America and Africa counted for respectivelyonly 0.6 % and 0.5 % of the total capacity and fell back interms of new installations down to respectively only 0.4 %and 0.3 % of the additional capacity installed worldwide inthe year 2008.

Growth Potential

According to a report by KPMG and CII, India's energy sectorwill require an investment of around US$ 120 billion-US$ 150billion over the next five years.

The government has revised its target of power capacityaddition to 90,000 MW in the 11th Five-Year-Plan (2007-12),up by 11,423 MW from the earlier estimate of 78,000 MW tosustain the growth momentum of the economy.

Further, according to the Planning Commission estimates,renewable energy (RE) projects worth US$ 16.50 billion, forthe generation of 15,000 MW power, would come up in the11th Plan.

Moreover, the government has earmarked a total capitalsubsidy of US$ 6.88 billion for providing electricity


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connections and for the distribution of infrastructure to ruralhouseholds.

Investments

According to an ASSOCHAM study during January-June 2008,investment announcements totalling to US$ 40.84 billionwere made in the power sector.

Reliance Power Transmission will invest nearly US$ 348.66million in setting up a 1,500-km transmission line.

Hyderabad-based Greenko Group plans to invest about US$300 million in three years for setting up about 15 cleanenergy projects in the country.

Strengths

India has the fifth largest electricity generation capacityin the world

Transmission & Distribution network of 6.6 millioncircuit km - the third largest in the world

Potential for growth in this sector (demand exceedingsupply)

Increasing focus on renewable sources of energy

Government presence in the sector (encouraging entryof foreign players)

No barriers to entry

Weaknesses

Public sector players are only into generation of power Large demand-supply gap: All India average energy

shortfall of 9% and peak demand shortfall of 14%

Lack of exposure of entrepreneurs to handleinternational contracts


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Inexperience of SEBs to handle changing marketenvironment in addition to their weak financialcondition

Unavailability of fuel and unwillingness of fuel suppliers

to enter into bankable contarcts Lack of necessary infrastructure to transport and store

fuel, high cost risk involved in transporting fuel

Opportunities

huge population base

Opportunities in Generation

Ultra Mega Power Plants (UMPP) – 9 projects of 4000

MW each. Coal based plants at pithead or coastal locations which

are untapped.

Hydel power potential of 150,000 MW is untapped asassessed by the Government of India.

Renovation, modernisation, up-rating and life extensionof old thermal and hydro power plants.

Threats

Competition to domestic players from foreign Pvt.players as 100% FDI permitted by government inGeneration, Transmission & Distribution

Not a lucrative option for investors(ROE )

Rise in price of raw materials

Tariffs are distorted and do not cover cost

Looking ahead

A recent study by consultancy major McKinsey estimatesIndia's power demand to increase from the present 120 gigawatt (GW) to 315 GW–335 GW by 2017, if India continues togrow at an average of 8 per cent over the next 10 years.


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This would require a five- to ten-fold rise in powerproduction, entailing investments worth US$ 600 billion overthe next ten years.

To feed its rapidly growing economy, India is planning to getan additional 60,000 MW of electricity from various hydro-power projects by the end of 2025.

The government targets providing electricity for all by 2012.Under the Rajiv Gandhi Grameen Vidyutikaran Yojna, theMinistry of Power plans to electrify 120,000 villages in thecurrent Five Year Plan (2007–12).

160.0

Financing required for the Po

FINANCI

IMPACT OF BUDGET 2008-09


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The finance minister Mr. P Chidambaram urged in poweringthe country's power sector while reading out its secondunion budget in the parliament. The 'populist' union budgetevoked somehow positive response from both consumer and

industrial point of view.

The power industry in the India has to witness the peakpower shortages, where demand of the electricity is far moreexceeding than the supply. The difference between the twois estimated to be nearly 7% and 12% in terms of total andpeak requirements. For bridging the gap between demandand supply, the government is envisaged in setting up of around 78,000 MW of power generating capacity during the11th five year plan, which covers the time period of 2007 to

2012.

The finance minister announced the total allocation of Rs.5500 Crore for the Rajiv Gandhi Grameen Vidyutikaran

Yojana, which will be continued in the eleventh five year planalso with a capital subsidy of Rs. 28,000 Crore. The budget2008-09 is proposed to spend Rs. 5500 Crore in lightning up5000 villages across the country. The scheme aims inproviding free electricity benefits to those villagers which are

below the poverty line. The new fund outlay will clearly helpin the setting and development of power infrastructure invillages.

India is one of the largest consuming countries of coal. Forbringing uniformity in the process of coal production andpricing, coal distribution policy has been announced. Coalregulator has to be appointed. The proposal of a coalregulator shall benefit the generating companies, which arebadly hit by rising fuel prices.

The finance minister has announced the withdrawal of exemption from 4% additional duty of customs levied undersection 3(5) of customs act, 1975 on transmission, powergeneration projects, sub transmission, distribution projectsand specified goods for high voltage transmission projects.


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Rs. 8000 Crore has been set aside in 2008-09 for acceleratedpower development and reforms project. The custom dutyon project imports has been reduced from 7.5% to 5%.

At Tilaiya, fourth UMPP (Ultra Mega Power Projects) has to beawarded shortly. Besides this Chhattisgarh, Tamil Nadu,Maharashtra & Karnataka are coming up with five moreUMPPs with the available govt. support. Power generationcompanies like Tata Power and NTPC are more likely to bebefitted with the allocation of UMPPs. 4% countervailing dutyon imports is levied on power plants less than 1000 MW. Thefinance minister has decided to set up a 'National

Transmission and Distribution Fund' for proper transmissionand distribution reform and for addressing the higher losses

in the power sector.

Rajiv Gandhi Grameen Vidyutikaran Yojana to be continuedduring the Eleventh Plan period with a capital subsidy of Rs28,000 Crore ;allocation of Rs 5,500 Crore for FY09.

Rs 800 Crore to be provided for Accelerated PowerDevelopment and Reforms Project (APDRP).

Proposal to set up a national fund for transmission anddistribution (T&D) reform.

Impact on sector

Aggressiveness in allotting UMPPs to prospective

bidders expected to speed up the generation capacity.

Setting up of a national fund for T&D reforms to provide

a more focused approach.

Coal distribution policy and appointment of a coal

regulator to bring regularity to the process of coalproduction and pricing.


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Impact on companies

National fund for T&D reforms to help prospects of

companies like Tata Power and REL.

Reforms in the coal sector to help generation

companies like NTPC, Tata Power and Reliance Power.

Removal of custom duty exemption on power projects

to impact companies like NTPC and Tata Power.

But imposition of a 4% special countervailing duty on

imports for power plants less than 1,000 MW is causinggrief.

The union budget 2008-09 is silent on the extension of section 80IA tax benefit for power projects. Non extension of

the section may have adverse impact on the power projectswhich are being commencing in current financial year. Asthey may not be completed before March 31, 2010, which isthe last date for commissioning under the existing 80IA taxprovision of the Income Tax Act, 1961.

PREDICTIONS

India requires an additional 90,000 MW of generation

capacity by 2012.

Opportunities in Transmission network ventures -

additional 60,000 circuit km of Transmission network

expected by 2012.

Total investment opportunity of about US$ 150 billion

over a 5 year.

By end March 2008, India will achieve Commercial

Operation Date (COD) on about 10,000 MW, marking

the best first year in any Plan period.

As per recent budget, Govt to will provide Rs.800 Crore

for the Power Development and Reforms Project.


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Govt. propose to create a national fund for transmission

and distribution reform in order to improve the poor

state of transmission and distribution (T&D) that has

been a drag on the sector.

The fourth Ultra Mega Power Project (UMPP) at Tilaiya to

be awarded shortly.

Possibility of bring up five more UMPPs in Chhattisgarh,

Karnataka, Maharashtra, Orissa and Tamilnadu.

In Hydro projects, 77 schemes have been identified

with a total of 33,000 MW capacity additions

Government Initiatives

Moreover, the following major policy initiatives of thegovernment have increased the attractiveness of the powersector:

- Captive power plants have been freely permitted.

- Open access to transmission encouraging competitionamongst generators and distributors and trading in powerfrom surplus to deficit regions.

- Generating companies permitted to distribute electricity inrural areas

- Automatic approval for 100% foreign equity is permitted ingeneration, transmission, and distribution and trading in

power sector without any upper ceiling on the quantum of investment

Investment Plans of Corporate

The corporate sector has been gearing to grab theopportunities in the power sector. According to an Assocham


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study, of the total $132.13bn corporate investmentannounced during the first half of 2008, maximum were fromthe power sector with 33.9% share. Few significant examplesare:

- Reliance Power plans to invest $12.5bn in the next five yearsto add 15,000 MW of capacity.

- Videocon plans to invest $5.21bn in setting up 5,000MWthermal power projects.

- Lanco plans to invest $3.75bn in setting up 3000MW hydro-power project by 2015.

- Essar plans to invest $1bn in setting up a 1200MW of powerproject.

- Bharat Heavy Electricals (BHEL) in collaboration with BharatElectronics plans to invest $1.23bn in setting up anintegrated photovoltaic facility.

Valuations

Going forward, given the ever increasing demand in the

power sector, favourable initiatives of the government andambitious investment plans of the companies; the powersector has good growth potential. Government's increasedfocus on private public partnership (PPP) for power projectsprovides tremendous opportunities for the privatecompanies.

Company TTM EPS P/E 2009 P/E 2008

NTPC 9.01 19.7 21.2

Power Grid Corporation 3.99 24.1 23.6

Neyveli Lignite 6.46 1.8 16.1

Jaiprakash Hydro-Power 5.06 5.4 9.4


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Torrent Power 7.13 9.8 13.2

Tata Power 32.11 20.6 23.0

Reliance Infrastructure 48.47 10.0 23.7

BHEL 59.27 23.8 31.6

DESIGN OF WINDMILL TOWER ( all dimensions in

cm)


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BLOCK DIAGRAM OF WIND POWER GENERATION

WIND WIND

WIND TURBINE

GEARING AND COUPLING

ELECTRICAL GENERATOR

CONTROLLER

ENERGY STORAGE

ENERGY STEP-UPING

DEVICE


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LOAD UTILIZATION

1. Energy Scenario in India

India is a power-starved country. The total installed powergeneration capacity in India stood at 1,05,714.29 MW includingthermal, hydel, nuclear and renewables. The contribution of thermal, hydel, nuclear and renewable sources of power towardsthe total installed power generation capacity were 73%, 23.50%,2% and 1.50% respectively. According to a recent estimate thereis a demand gap of 8-10% and a peak load demand gap of 18-20% in the country. The problem is also accentuated by the fact

that there is very little decentralized generation of power andvast areas in the rural segment is not connected by grid power.

This is where tapping wind energy for generation of grid qualityelectricity on a decentralized manner can be of immense help tothe country.

2. Present state and future potential for wind energygeneration in India

Exploitation of wind energy has been in place from time

immemorial but the development of technology for tapping thesame for generation of grid quality electricity is of a recent origin.India has been quick to make a foray in this area. It has made itsmark as one of the top ranking countries in the world in windpower generation. With an installed generation capacity of 1702.30 MW of wind power, India now ranks 5th in the worldafter Germany, USA, Denmark and Spain in wind powergeneration. According to a recent estimate, the gross wind powergeneration potential in the country is estimated at 45,195 MW at

50 Mtr. Hub Height. Hub height is defined as the height from theGround Level (GL) at which the hub of the windmill or the hub of the propeller blades of the wind energy generator is situated. Thestate wise potential and installed capacity is given in the tablebelow:


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Table-1

State GrossPotentialin MW

Total InstalledCapacity in MW

DemonstrationProjects(MW)

PrivateSectorProjects(MW)

TotalCapacity(MW)

AndhraPradesh

8275 5.40 87.20 92.60

Gujarat 9675 17.30 149.60 166.90

Karnataka 6620 2.60 93.60 96.20

Kerala 875 2.00 0.00 2.00

MadhyaPradesh

5500 0.60 22.00 22.60

Maharashtra

3650 6.40 392.80 399.20

Orissa 1700 6.40 18.70 25.10

Rajasthan 5400 19.40 875.60 895.00

Tamil Nadu 3050 1.10 0.00 1.10

WestBengal

450 1.60 0.00 1.60

Total 45195 62.80 1639.50 1702.30

The present installed capacity of 1702.30 MW of wind power isaround 3.78% of the total potential in the country. Theachievement during the VIIIth Plan was significant. 860 MW of wind power capacity was added during the plan period as againstthe initial target of 100 MW and the revised target of 500 MW.


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Ministry of Non Conventional Energy Sources (MNES); a fullfledged Ministry of Govt. of India looking after the promotionaland development policies of renewables in the country; has yearmarked a target of 5,000 MW from wind energy sources by 2012i.e. the end of the XI th Five Year Plan.

3. Wind resource potential

The wind power generation in the country is influenced to agreat extent by the wind speed and wind power density prevalentat a particular potential location at any given point of time. Thewind speed is affected to a large extent by the strongsouthwesterly monsoons, starting in May-June, and at the same

time by the weaker northeastern monsoons in the winter months.It has been generally observed that 60-70% of the total windpower generation in the country takes place during June- Octoberwhen the southwest monsoons are prevalent through out thecountry. According to a latest study, locations having an annualmean wind power density greater than 150 watts/ square meterat 30 meter hub height have been found to be suitable fordevelopment of wind power projects. The details of these sitesare available in the wind energy atlas of India.

4. Promotional policies and new initiatives fordevelopment of wind power

Govt. of India and state govts. have developed suitable policiesand guidelines for providing technical help, financial support andvarious other incentives for development of wind power in thecountry. These include R&D activities for design anddevelopment of low cost indigenous wind energy harnessingtechnologies, dissemination of the developed technologies

through demonstration projects, setting up of the commercialwind farms through central and state government subsidy,providing financial incentives to potential entrepreneurs etc.

The various incentives that are being provided by the central andthe state governments are as per the details given below:


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From Central Government

· Income Tax Holiday

· Accelerated Depreciation

· Concessional Custom Duty/ Duty Free Import

· Capital/ Interest Subsidy

From State Governments

· Energy buyback, power wheeling and banking facilities

· Sales tax concession benefits

· Electricity tax exemption

· Demand cut concession offered to industrial consumerswho establish power generating units from renewable energysources

· Capital Subsidy

The table given below depicts the initiatives provided by some of the state governments towards development of commercial windpower projects.

These calorific values or heat values indicate that bio-gas canperform works similar to fossil oil in domestic cooking, lightingetc., with better efficiency depending upon the methane contentin it. The bio-gas has also the potential for use in internalcombustion engines used for pumping water etc. for which

research and development works are in progress. Biogas,therefore, has a bright future as an alternate renewable source of energy for domestic and farm use.

3. Bio-Gas, its Production Process and Composition

It would be useful to know what bio-gas is and what its properties


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are-

(i) Bio-gas: Itmainly comprises of hydro-carbon which iscombustible like any hydro-carbons and can produce heat and

energy when burnt. The chemical formula of the hydro-carbon isCH4 where C stands for carbon and H for hydrogen andchemically the gas is termed as methane gas. The chemicalformula of some other commonly used hydrocarbons derivedfrom fossil oil viz. petrol, kerosene, diesel, etc. are C6H14 ,C9H20 and C16H34 respectively. Unlike these hydro-carbonswhich are derived from direct chemical processes, bio-gas isproduced through a bio-chemical process in which some bacteriaconvert the biological wastes into useful bio-gas comprising

methane through chemical interaction. Such methane gas isrenewable through continuous feeding of biological wastes andwhich are available in plenty in rural areas in the country. Sincethe useful gas originates from biological process, it has beentermed as bio-gas in which methane gas is the main constituent.

(ii) Production Process:The process of bio-gas production isanaerobic in nature and takes place in two stages. The twostages have been termed as acid formation stage and methaneformation stage. In the acid formation stage, the bio-degradablecomplex organic compounds of solids and cellulose presents inthe waste materials are acted upon by a group of acid formingbacteria present in the dung and reduce them into organic acids,CO2, H2, NH4 and H2S. Since the organic acids are the mainproducts in this stage, it is known as acid forming stage and thisserves as the substrates for the production of methane bymethanogenic bacteria.

In the second stage, groups of methanogenic bacteria act upon

the organic acids to produce methane gas and also reduce CO2in the presence of H2 to form methane (CH4). At the end of theprocess the amount of oxygen demanding materials in the wasteproduct is reduced to within the safe level for handling by humanbeings. There are four types of methano-genic bacteria; Methano-bacterium, Methano-spirillium, Methano-coccus and Methano-circina. These bacteria are oxygen sensitive and photo-sensitive


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and do not perform effectively in the presence of oxygen andlight.

Constituents

The gas thus produced by the above process in a bio-gas plantdoes not contain pure methane and has several impurities. Atypical composition of such gas obtained from the process is asfollows: Table –II

Items AndhraPradesh

Karnataka

MadhyaPradesh

Mahar-ashtra

Rajasthan

TamilNadu

WestBengal

Wheeling

2% of energy

2% of energy

2% of energy

2% of energy

2% of energy

2% of energy

2% of energy

Banking

12months

2% p.m.for 12months

- 12Months

12Months

12Months

6Months

Buy -Back

Rs.2.25/Kwh(5%

escalation1997-98)

Rs.2.25/Kwh(5%

escalation1994-95)

Rs.2.25/Kwh noescalati

on

Rs. 2.25/Kwh (5%escalation

1994-95)

Rs.2.75/Kwh(5%

escalation1999-2000)

Rs.2.25/Kwh(5%

escalation1995-96)

Oncase tocasebasis

ThirdPartySale

Notallowed

Allowed Allowed Allowed Allowed NotAllowed

NotAllowed

CapitalSubsidy

20%Max.

Rs.25.00Lakh

Max. Rs.25.00

Lakh forbackward areas

Sameas other

industries

30%Max. Rs.

30.00Lakh

- - -

Otherincentives

Industrystatus

Noelectricity duty

- 100%salestax

Noelectricity duty

Noelectricity duty

-


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for 5years

exemption

for 5years

Apart from the same, MNES has set up an autonomous body

called The Center for Wind Energy technology (C-WET) withassistance from the Danish Government. C-WET conductsresearch and development work for development of indigenoustechnology for wind power generation, preparation of technicalstandards for certification of wind power generators, award of certificates for the development as well as consultancy activitiesfor development of market for wind power.

On similar lines to C-WET few other autonomous bodies namelyWind Energy Producers Association (WINPRO) and Indian Wind

Turbine Manufacturers Association (IWTMA) have been created. The objective of WINPRO is to create awareness about thedevelopment of wind power in the country, creating consensusabout solving technical problems and development of skilledmanpower through organization of countrywide seminars,workshops etc. Similarly the function of IWTMA is to discuss/ takeup issues concerning wind turbine manufacturers with central,state governmental and other concerned agencies, work towardsan amicable solution to the issues so that development and

penetration of wind power in the country can take place in asustainable manner.

5. Wind power generator manufacturing technologyavailable in the country

The wind turbines installed so far in the country arepredominantly of the “fixed pitch” type. The degree by which theWind Energy Generator (WEG) propeller blades can be made totilt through mechanical or electrical controls is called the pitch of the WEG. However, with technological advancement, the use of WEGs with better aerodynamic designs, lighter and larger bladesmade up of fibre glass material with epoxy coating, higher


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tubular towers, direct mesh drive and variable speed gearlessoperation using advanced power electronics is gainingmomentum.

Technological advancement is being made nowadays forcomplete elimination or reduction in reactive power consumptionby the WEGs. Reactive power is defined as the power required forcutting the electromagnetic field generated within the armaturecoil of the electrical generator of a WEG under static condition forit to rotate and generate electrical power. The unit size of theWEGs has also gone up from 55-100 KW to 400-750KW forcommercial projects being implemented nowadays.

6. Barriers in wind power development

In spite of the availability of various financial incentives andavailability of technological know-how, the development of windpower is very tardy in the country. The main bottlenecks forlarge-scale development of wind power in the country can beattributed to the following:

1.Distortions in the energy market2.Stiff competition from subsidized conventional energy and its

universal acceptability3. Lack of awareness and organizational skill required forpropagating the technology4.Technological constraints for limited level of grid penetration(20% maximum)5. Inappropriate estimation of the power load that is to beserved by the WEG6.Lack of adequate capital at affordable cost7.Laborious and tardy procedure for site allocation

7. Need of the hour

The following are the need of the hour:

1. Urgent efforts are required for the design and developmentof low cost, simple to use wind turbines. The manufacturers


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in India who have a tie up with foreign firms should see thatthe level of indenization of the WEGs is increased so thatthe plant and machinery cost is reduced.

2. Suitable extension mechanism has to be devised whereinthe benefits of development of wind power can bedisseminated to the rural communities, village panchayatsso that collective organizational skills can be developed.

3. Simple, easy to understand and lucid techniques should bedevised which can help in correct estimation of powerrequirement at various power-consuming units.

4. The various agencies providing institutional finance havegot a key role to play by providing finance to the promotersat concessional rate of interest, repayment period matching

to the level of annual revenue available for repayment of debt, provision of adequate grace period, rationalization of the process of creation of charge by the bankers on thesecurities of the promoters etc.

5. Simplification of procedure for speedy land/ site allotmentfor the wind turbines.

Therefore, in order to bring the desired information in theknowledge of potential entrepreneurs and in order to properly

guide them in establishment of projects on wind energygenerators, the present model having an installed wind powergeneration capacity of 1.00 MW has been formulated.

8. Investment components of project for installation of wind energy generators having an installed capacity of 1.00 MW

The various investment components are as follows:

Land, layout plan and site development requirement:

The land requirement for installation of the wind energygenerators will depend upon the total installed capacity of thewind farm. The site should have been identified by MNES or itsstate level sister agencies for its potentiality for development of wind power based on technical parameters such as avg. yearly


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wind speed, wind power density, wind direction etc. The siteshould find a mention in the wind energy atlas of India havingpotentiality for wind power development. The average yearlywind speed of the site should be greater than the minimum cut-inwind speed for the specific WEG proposed to be installed. Micrositting at the site should also have been done by MNES orconcerned state level agency. Non agricultural land shouldinvariably be used for installation of the WEGs. A minimumdistance of 7 times the rotor diameter should be maintainedbetween 2 adjacent WEGs installed in a single row, whereas aminimum row to row distance of 3 times the rotor diametershould be maintained between 2 WEGs. Therefore, approximatelyan area of 4.00 acre is required for installation of 1.00 MW

capacity wind power plant. The tentative cost of land and landdevelopment charges for the model project has been consideredat Rs. 4.00 Lakh.

It has been observed from experience that the major WEGmanufacturers generally purchase land in bulk from MNES/ StateNodal Agencies for installation of WEGs. Thereafter, thecompanies negotiate for establishment of WEGs with corporates,partnership firms, individuals etc. Once the contractual

agreement is signed, the WEG manufacturing companies go in forinstallation and commissioning of the WEGs on a turn key basis. They also help in completing all the legal formalities and makingarrangements for forward linkages viz. signing of the powerpurchase agreement (PPA) with the concerned state electricityboard (SEB) for sale of wind power, using the power transmissionand distribution infrastructure of the SEB for wheeling of powerfor captive use etc, third party sale, banking etc. The WEGmanufacturing companies thereafter transfers the ownership of the projects to its true owners. However, they continue to

operate the project on behalf of the corporates, partnershipfirms, individuals etc. as well as carry out annual repair andmaintenance operations based on annual contractual agreement.

Civil construction:

As a thumb rule approximately 2.30% of the total project cost


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involved in a 1.00 MW capacity Wind Energy Farm is usedtowards meeting the cost of civil infrastructure.

The cost include construction of sheds for installation of the

control panel, metering unit, construction of foundation for thelattice/ tubular tower on top of which the WEGs is to be housed. Acost of Rs. 3.00 Lakh /unit (WEG) has been considered for themodel project . Thus the total cost amounts to Rs. 3.00 lakh x 4 =Rs. 12.00 Lakh.

Plant and Machinery:

In the proposed model project four number of WEGs are proposed

to be installed. Some of the important technical specifications of the machines have been presented in the table given below:

Table-III

Technical specifications of the WEGs

Rated Capacity 250KW

Rotor Diameter 30m

Hub Height 50m

Rotor with Pitch Control

Type Upwind rotor with active pitchcontrol

Direction of rotation Clockwise

Number of blades 3

Length of blades 14m

Swept Area 707 m 2

Blade Material Fiber glass ( reinforced epoxy)with integral lighteningprotection


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Rotor Speed Variable 18-50 rpm

Tip Speed 25-75 m/s

Pitch Control Three synchronized blade pitchsystems with battery back up

Generator Rigid

Hub Bearings Tapered roller bearings

Grid Feeding AC-DC-AC through converter-inverter

Braking System 3 independent aero brakes withemergency backup supply

Yaw Control Active through arrangementgears, friction damping etc.

Cut-in wind speed 2.5 m/s

Rated wind speed 13 m/s

Tower Steel tubular

As a thumb rule 86% of the total cost for erection andcommissioning a 1.00 MW capacity wind farm is incurred towardscost of plant and machinery. Under the model project a cost of Rs. 104.00 Lakh ( inclusive of packaging, handling, erection and

commissioning charges etc.) has been considered for the supplyof each WEG of 250 kW installed power generation capacity atthe site. Thus the total cost amounts to Rs. 104.00 Lakh x 4nos.= Rs. 416.00 Lakh

Electricals:

Suitable step up transformers with 33 KV as output voltage arealso required for stepping up the voltage of generated power foronward feeding the same to the state power grid. A cost @ Rs.

4.50 Lakh per transformer unit totaling Rs. 18.00

Lakh has been considered for the model project. Apart from it, acost of Rs. 0.975 Lakh has also been considered towards cost of 33 KV OHT Line.


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Infrastructure development / miscellaneous charges:

A cost of Rs. 25.00 Lakh has been considered for the modelproject.

Project Cost:

The detailed item wise project cost considered are as follows:

Table -IV

Detailed project Cost(Rs. Lakh)

S.No.

Description Rate/unit(Rs.in Lakh)

Qty. or no.of units

Amount

1 Purchase of land,

landdevelopmentand fencingcharges

Lump sum

amount

4.00 acres 4.00

2 Supply of WEG of 250 kW capacityeach

100.00 4 400.00

3 Packaging ,handling, loading

, transportation,unloading andinsurance covertill erection of WEGs

1.00 4 4.00

4 Foundation and 3.00 4 12.00


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other civilstructures

5 Electrical and Transformers 33

KV

4.50 4 18.00

6 Erection andCommissioning

3.00 4 12.00

7 Other projectcost includingcharges forinfrastructuredevelopment @Rs. 25 Lakh per

MW for 1.00 MW

25.00 1.00 MW 25.00

8 Cost of 33 KVOHT Line( External andinternal) 0.15 KMassumed approx.@ Rs. 6.50 lakhsper KM or asactual

0.975

9 Total 475.98

9. Marketing

The wind power generated can be:

i. Used for captive use through wheeling using thepower grid of the concerned state electricity board.ii. Can be directly sold to the State Electricity Board

The banks are requested to make themselves familiar with thewind power development policies brought out by IREDA and it'ssister concern at the state level for financing WEG installationproject proposals.


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10. Insurance:

The wind energy generators should be adequately insured.

11. Eligibility of the borrowers:

The borrowers can be proprietary and partnership firms,cooperatives, joint stock companies, joint sector companies etc

12. Repayment:

The repayment schedule has been calculated considering thetenure of the term loan of 5 years without any grace period.However, banks are free to decide upon the repayment scheduledepending upon the net cash flow assessed.

13. Interest rate for ultimate borrowers:

Banks are free to decide the rate of interest within the overall RBIguidelines . However, for working out the financial viability andbankability of the model project we have assumed the rate of interest as 12% p.a.

14. Interest rate for refinance from NABARD:As per circulars of NABARD issued from time to time.

15. Security:

Banks may take a decision as per RBI guidelines.

Results of financial analysis are as under:

The financial analysis of the investment on installation of WindEnergy Generators for generation of wind power has beenattempted for two different scenarios.

1. Power is wheeled through the power grid of the concernedstate electricity board for captive use.2. Wind power generated is directly sold to the to the state


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electricity board.

The results are place in annexures I(a) to VIII(a) and I(b) to VIII(b)respectively. The project has a margin money component of 25%

with the rate of interest on term loan and working capital as 12%p.a. and 13% p.a. respectively. The financial indicators for twodifferent investment scenarios are as under:

I. Power is wheeled through the power grid of the concernedstate electricity board for captive use.

1.Net present value @ 15% DF (NPV) : Rs. 471.845Lakh

2.Internal Rate of return (IRR) : 27.37%3.Benefit Cost Ratio (BCR) : 1.79: 14.Average Debt Service Coverage Ratio (DSCR): 1.75:1

II. Wind power generated is directly sold to the state electricityboard.

1. Net present value @ 15% DF (NPV) : Rs. 333.369Lakh2. Internal Rate of return (IRR) : 21.92 %

3. Benefit Cost Ratio (BCR) : 1.55:14. Average Debt Service Coverage Ratio (DSCR) : 1.61:1


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. Schemes

Rate(%)p.a

Repayment Period (Years)

Contribution

(%)

fromIREDA

1. Projectfinancing-Settingupof windfarmsonownersh

ip /leasebasis

11.25to11.90

10 30% Upto70%of

totalProject Cost

Projectssetup bymanufacturers or theirsubsidiarieswithminimumcapacity of 5 MW mayavailadditionalloan upto15%secured byBG/FDR andgenerationguarantee isprovided forentire loan

period totheborrowingcompanyand thesame isassigned toIREDA

Note:

1. The above interest rates are variable and willautomatically reset upon expiry of every 3 yearsfrom the date of first disbursement/reset.

2. The option is available for a fixed interest rate forthe entire loan period subject to the condition that1% additional interest shall be charged.


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3. Maximum of 1 year grace period after commissioning of project will be applicable for commencement of principal repayment.

4. Rebate of 0.75% will be given in the event of

borrower furnishing security of Bank Guarantee orPledge of FDR issued by Scheduled Banks.

Eligibility Criteria For FinancingWho Can Apply?

• Public, Private Ltd companies, NBFCs andregistered Societies.

• Individual, Proprietary and Partnership firms (withapplicable conditions)

• State Electricity Boards which are restructured or in

the process of restructuring andeligible to borrow loan from REC/PFC.General Eligibility Criteria for Applicants• Profit making companies with no accumulated losses.• Debt Equity Ratio not more than 3:1 ( 5:1 in case of

NBFCs - Conditions Apply)• No default to IREDA and other FIs / Banks• No erosion of paid-up capital.Note: Applicants who are loss making/ not meeting the

criteria relating to accumulated losses/debt equity ratioshall be eligible for financing if Bank Guarantee / FDR isprovided as security for the entire loan.Eligible Projects

• Projects demonstrating techno commercialviability.

• Grid connected wind farm projects in identified windysites appearing in the MNRE / CWETlist of potential sites for wind farm projects in thecountry.• Projects incorporating wind electric generatorsappearing in the C-WET approvedmanufacturers list.• Project sites having mean annual wind power densityof over 200 Watts/Sq.m. at 50mabove ground level(agl).


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• Project incorporating new Wind Electric Generatorswith the capacity 225 kW and above.• Refinancing of Projects commissioned upto 1 yearprior to date of registration of

application at IREDA.How to ApplyLoan Application to IREDA is to be submitted in prescribedform. The details of clearances / documents required forconsideration of loan sanction are specified in the applicationform. The application form is available free of cost and mayalso be downloaded from IREDA’s websitewww.iredaltd.com .

WHAT IS PROJECT FINANCE?

Project finance is the term used to describe a structure in

which the only security for a loan is the project itself. Inother words, the owner of the project company is notpersonally, or corporately, liable for the loan. In a projectfinance deal, no guarantee is given that the loan will berepaid; however, if the loan is not repaid, the investor canseize the project and run or sell it in order to extract cash.

This process as rather like a giant property mortgage, sinceif a home owner does not repay the mortgage on time, the

house may be repossessed and sold by the lender. Therefore, the financing of a project requires carefulconsideration of all the different aspects, as well as theassociated legal and commercial arrangements. Beforeinvestment, any project finance lender will want to know if there is any risk that repayment will not be made over theloan term.


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http://www.iredaltd.com/

http://www.iredaltd.com/




DEAL STRUCTURE

A typical, simple project finance deal will be arrangedthrough a special purpose vehicle (SPV) company. The SPV iscalled 'Wind Farm Ltd' in Figure 3.1. This would be aseparate legal entity which may be owned by one company,consisting of several separate entities or a joint venture.

One bank may act alone if the project is very small, but willusually arrange a lending syndicate – this means that agroup of banks will join together to provide the finance,usually with one bank as the ‘lead arranger’ of the deal. Thisis shown in Figure 3.1, where Bank A syndicates the loan toBanks B, C and D.

Figure 3.1: Typical Wind Farm Finance Structure

Source: Garrad Hassan


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A considerable amount of work is carried out before the loanis agreed, to check that the project is well planned and thatit can actually make the necessary repayments by therequired date. This process is called 'due diligence' and there

is usually separate commercial, technical and legal duediligence carried out on behalf of the bank. The investors willmake careful consideration of technical, financial andpolitical risks, as well as considering how investment in aproject fits in with the bank’s own investment strategy.

TYPICAL DEAL PARAMETERS

Generally, a bank will not lend 100 per cent of the projectvalue and will expect to see a cash contribution from theborrower – this is usually referred to as ‘equity’. It is typicalto see 25 to 30 per cent equity, and 70 to 75 per cent loan(money provided by the bank as their investment).Occasionally, a loan of 80 per cent is possible.

The size of the loan depends on the expected project

revenue, although it is typical for investors to take a cautiousapproach and to assume that the long-term income will belower than assumed for normal operation. This ensures thatthe loan does not immediately run into problems in a yearwith poor wind conditions or other technical problems, andalso takes into account the uncertainty associated withincome prediction.

Typically, a bank will base the financial model on the

‘exceedance cases’ provided within the energy assessmentfor the project. The mean estimated production of theproject (P50) may be used to decide on the size of the loan,or in some cases a value lower than the mean (for exampleP75 or P90). This depends on the level of additional cashcushioning that is available to cover costs and productionvariation over and above the money that is needed to make


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the debt payments. This is called the debt service cover ratio(DSCR) and is the ratio of cash available at the payment dateto the debt service costs at that date. For example, if €1.4million is available to make a debt payment (repayment and

interest) of €1 million, the DSCR is 1.4:1.

The energy assumptions used for the financial model andassociated DSCR are always a matter of negotiation with thebank as part of the loan agreement. Some banks will take avery cautious approach to the assumed energy production,

with a low DCSR and some will assume a more uncertainenergy case, but with a high DSCR and sufficient cashcushioning to cover potential production variation.

The loan is often divided into two parts: a construction loanand a term loan. The construction loan provides funds for theconstruction of the project and becomes a term loan aftercompletion. At the ‘conversion’ from a construction into aterm loan, the terms and conditions associated with the loanchange, as does the pricing of the debt. The term loan is

usually less expensive than the construction loan as the risksare lower during operation.

Typically, the length of a loan is between 10 and 15 years,but loan terms have become longer as banks have becomemore experienced in the wind industry.

The interest rate is often 1-1.5 per cent above the base rateat which the bank borrows their own funds (referred to as

the interbank offer rate). In addition, banks usually charge aloan set-up fee of around 1 per cent of the loan cost, andthey can make extra money by offering administrative andaccount services associated with the loan. Products to fixinterest rates or foreign exchange rates are often sold to theproject owner.


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It is also typical for investors to have a series of requirements over the loan period; these are referred to as‘financial covenants’. These requirements are often theresult of the due diligence and are listed within the

‘financing agreement’. Typical covenants include the regularprovision of information about operational and financialreporting, insurance coverage and management of projectbank accounts.

EXPERIENCE

In the last two decades, no wind industry project has everhad to be repossessed, although industry and project eventshave triggered some restructuring to adjust financing in

difficult circumstances. The project finance mechanism hastherefore served the industry and the banking communitywell. A decade ago, developers might have struggled to finda bank ready to loan to a project, whereas today banks oftenpursue developers to solicit their loan requirements. Clearly,this has improved the deals available to wind farm owners.


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THE ECONOMICS OF WIND POWER

Generating electricity from the wind makes environmentalsense. The wind is a clean and renewable fuel that will neverrun out. It can also make economic sense. Although a windenergy system requires a large initial capital outlay, the winditself is free. Hence, a turbine can generate electricity foryears with no fuel costs while the costs of other sources of energy may escalate.

After the initial cost of a turbine is paid off, the only on-goingcost is maintenance; the fuel is free. How long do windturbines take to pay for themselves? The answer to this

question depends on a lot of factors, such as how often thewind blows, how much money homeowners can save bygenerating their own electricity, and how much acommercial wind farm can sell their energy for.

Trends suggest that wind power, which is already costcompetitive in windy areas, is likely to become even morecost effective over time. For one thing, the cost of producingelectricity from fossil fuels is likely to increase, causing utilityrates to rise. In addition, the technology associated withmanufacturing turbines and generating wind power is likelyto become less expensive.

The economics of wind power can vary significantly. Manywebsites give visitors access to specialized calculators forcomputing the cost of operating a specific turbine. Thatsaid, rough estimates for the current cost of generatingelectricity from wind power are:

Residential Wind Turbine - About 10 cents per kilowatt-hourCommercial Wind Turbine - About 4 cents per kilowatt-

hour A kilowatt-hour is the amount of energy it takes to power ten100 watt light bulbs for an hour. For owners of residential


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turbines, the main number to compare this with is theamount that UPPCO charges for a kilowatt-hour, which isabout 11 cents.

For commercial generators of wind power, the main numberto compare this with is the amount that they can sell theirelectricity for, which depends on the contract theynegotiate. When the operators of a wind farm negotiatetheir contract as part of a Green Energy program or inconjunction with customers who guarantee to pay a certainamount, they can receive enough to make a profit. Otherincentives, such as renewable energy production tax creditscan add to that profit margin. As another point of comparison, coal-fired power plants can produce electricity

for about 3 cents per kilowatt-hour.

Three Main Factors Affecting Costs

With wind energy, the fuel is free. The cost of generatingelectricity from wind is primarily affected by three factors:installation costs, operation and maintenance costs, and thewindiness of the site.

A. Installation Costs

The installation costs include the purchase price of thecomplete system (including tower, wiring, utilityinterconnection or battery storage equipment, powerconditioning unit, etc.) plus delivery and installation chargesand professional fees.

•

A grid-connected residential-scale system (1-10 kW)generally costs between $2,400 and $3,000 perinstalled kilowatt.

• Commercial turbines (larger than 500 kW) cost in therange of $1,000 to $2,500 per kilowatt, with the lowestcosts achieved when large multiple units are installed


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at one location.

In general, capital costs represent between 75% and 90% of the total cost.

B. Operation and maintenance costs

Operating expenses are incurred over the lifetime of thewind system. Operating costs include maintenance andservice, insurance, and any applicable taxes. Once theproject has been paid for, the only costs are operation andmaintenance costs. A rule of estimation for annual operatingexpenses is 1.5% to 2.5% of the initial system cost. Anotherestimate is based on the system's energy production and is

equivalent 1 to 2 cents per kW-hr of output.

C. Windiness of the site

Wind turbines obviously yield more energy in places with lotsof wind, with the average strength of the wind being a keyparameter. Therefore, in evaluating the actual output of awind turbine, one has to take into account the capacityfactor, which is the ratio of average power output to therated power of the turbine. Based on the wind potential map

for the local area, a conservative estimate of the capacityfactor for wind turbines in the western UP would be in therange 0.15-0.25.

Calculations

To determine the cost per kW-hr for electricity generated bya wind turbine, one first estimates the wind turbines totalannual costs and the turbine's annual energy output. Then


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one can estimate the cost per kilowatt-hour as:

Cost Per kW-hr = Annual Cost/Annual Energy Output

For illustrative purposes, consider the total initial cost of a 5

kW residential system and a 500 kW commercial system.

A. Total Annual Cost

The total annual cost will be the initial cost of the turbinespread out over the lifetime of the turbine plus the annualoperating expenses.

Initial costs: The initial cost is inclusive of all expenses toevaluate, buy, install and start-up a wind system.

Residential 5 kW system = $15,000

Commercial 600 kW system = $800,000

Operation and maintenance costs: Annual operating costsare estimated as 2% of initial capital cost. For the two windsystem examples, the annual operating costs are:

Residential 2% x $15,000 = $300

Commercial 2% x $800,000 = $16,000

Total annual costs over expected lifetime: To computeannual cost of the wind turbines.

Annual Cost = (Initial Cost/Expected Life) + AnnualOperating Costs

Wind turbine manufacturers estimate a useful life of between 20 and 30 years for their product. Using 30 years asexpected lifetime:

Residential ($15,000/30) + $300 = $800 per year

Commercial ($800,000/30) + $16,000 = $42,667 per year


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B. Cost Per Kilowatt Hour

The cost per kilowatt-hour will be:

Cost Per kWh = Annual Cost/Annual Energy Output

Annual energy output. The annual energy output willdepend on the windiness of the site as represented by acapacity factor. Based on the average wind speed in UP, aconservative estimate of the wind turbine capacity factor willbe 0.18 for the residential system and 0.20 for thecommercial system. Therefore, the annual energy outputs of the two systems would be:

Residential 5kw x 0.18 x 24 x 365 = 7,884 kilowatt-hrs

Commercial 600kw x 0.20 x 24 x 365 = 1,051,200 kilowatt-

hrs

And, therefore, the cost per kilowatt-hr of the two systemsare:

Residential $800/7,884 kwh = $0.10 per kilowatt-hr

Commercial $42,667/1,051,200 kwh = $0.04 per kilowatt-hr

Other Economic Factors

A more accurate cost per kilowatt-hour calculation requiresthat one also take into account many details, including:

• Interest paid on borrowed money• Insurance• Utility buy-back


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• State and federal tax benefits

• Wind turbine resale value


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Trends Influencing the Costs of Wind Power

In recent years, three major trends have dominated thedevelopment of grid-connected wind turbines:

• Turbines have become larger andtaller – the average size of turbines soldon the market has increasedsubstantially;• The efficiency of turbine productionhas increased steadily; and• In general, the investment costsper kW have decreased, although therehas been a deviation from this trend in

recent years.

Figure 1.3 shows the development of the average-sizedwind turbine for a number of the most important wind powercountries. It can be observed that the annual average sizehas increased significantly over the last 10-15 years, fromapproximately 200 kW in 1990 to 2 MW in 2007 in the UK,with Germany, Spain and the US not far behind.

As shown, there is a significant difference between somecountries: in India, the average installed size in 2007 wasaround 1 MW, considerably lower than levels in the UK andGermany (2,049 kW and 1,879 kW, respectively). Theunstable picture for Denmark in recent years is due to thelow level of turbine installations.

Figure 1.3: Development of the Average Wind TurbineSize Sold in Different Countries


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Source: BTM-consult

In 2007, turbines of the MW-class (with a capacity of over 1MW) had a market share of more than 95 per cent, leavingless than 5 per cent for the smaller machines. Within theMW-segment, turbines with capacities of 2.5 MW andupwards are becoming increasingly important, even for on-land sites. In 2007, the market share of these large turbineswas 6 per cent, compared to only 0.3 per cent at the end of 2003.

The wind regime at the chosen site, the turbine hub heightand the efficiency of production determine power productionfrom the turbines. So just increasing the height of turbineshas resulted in higher power production. Similarly, the

methods for measuring and evaluating the wind speed at agiven site have improved substantially in recent years andthus improved the site selection for new turbines. However,the fast development of wind power capacity in countriessuch as Germany and Denmark implies that, by now, thebest wind sites in these countries have been taken and thatnew on-land turbine capacity will have to be erected at sites


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with a marginally lower average wind speed. Thereplacement of older and smaller turbines with modernversions is also becoming increasingly important, especiallyin countries which have been involved in wind power

development for a long time, as is the case for Germany andDenmark.

The development of electricity production efficiency, owingto better equipment design, measured as annual energyproduction per square metre of swept rotor area (kWh/m2)at a specific reference site, has correspondingly improvedsignificantly in recent years. With improved equipment

efficiency, improved turbine siting and higher hub height,the overall production efficiency has increased by 2-3 percent annually over the last 15 years.

Figure 1.4 shows how these trends have affectedinvestment costs, exemplified by the case of Denmark, from1987 to 2006. The data reflects turbines installed in theparticular year shown (all costs are converted to 2006

prices); all costs on the right axis are calculated per squaremetre of swept rotor area, while those on the left axis arecalculated per kW of rated capacity.

The number of square metres covered by the turbine’s rotor– the swept rotor area - is a good indicator of the turbine’spower production, so this measure is a relevant index for the

development in costs per kWh. As shown in Figure 1.4, therewas a substantial decline in costs per unit of swept rotorarea in the period under consideration, except during 2006.So from the late 1990s until 2004, overall investments perunit of swept rotor area declined by more than 2 per centper annum, corresponding to a total reduction in cost of almost 30 per cent over these 15 years. But this trend was


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broken in 2006, when total investment costs rose byapproximately 20 per cent compared to 2004, mainly due toa significant increase in demand for wind turbines, combinedwith rising commodity prices and supply constraints.

Looking at the cost per rated capacity (per kW), the samedecline is found in the period 1989 to 2004, with theexception of the 1,000 kW machine in 2001. The cause isrelated to the size of this specific turbine: with higher hubheight and larger rotor diameter, the turbine is equippedwith a slightly smaller generator, although it produces moreelectricity. This fact is particularly important when analysing

turbines built specifically for low and medium wind areas,where the rotor diameter is considerably larger incomparison to the rated capacity. As shown in Figure 1.4,the cost per kW installed also rose by 20 per cent in 2006compared to 2004.

Figure 1.4: The Development of Investment Costsfrom 1989 to 2006, Illustrated by the Case of Denmark.


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Note: Right axis: Investment costs divided by swept rotor area ( € /m2 in constant 2006 € ). Left axis: Wind turbinecapital costs (ex-works) and other costs per kW rated power ( € /kW in constant 2006 € ).

In addition, the share of other costs as a percentage of totalcosts has generally decreased. In 1989, almost 29 per centof total investment costs were related to costs other thanthe turbine itself. By 1997, this share had declined toapproximately 20 per cent. This trend towards lowerauxiliary costs continues for the last turbine model shown(2,000 kW), where other costs amount to approximately 18per cent of total costs. But from 2004 to 2006 other costsrose almost in parallel with the cost of the turbine itself.

The recent increase in turbine prices is a globalphenomenon, which stems mainly from a strong andincreasing demand for wind power in many countries, alongwith constraints on the supply side (not only related to


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turbine manufacturers but also resulting from a deficit insub-supplier production capacity of wind turbinecomponents). The general price increases for newly installedwind turbines in a number of selected countries are shown in

Figure 1.5. There are significant differences betweenindividual countries, with price increases ranging fromalmost none to a rise of more than 40 per cent in the US andCanada.

Figure 1.5: The Increase in Turbine Prices from 2004to 2006 for a Selected Number of Countries

Note: Preliminary dat

a shows that prices for new turbines might continue to riseduring 2007.

Source: IEA (2007)

Operation and Maintenance Costs of Wind GeneratedPower

Operation and maintenance (O&M) costs constitute asizeable share of the total annual costs of a wind turbine. Fora new turbine, O&M costs may easily make up 20-25 per


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cent of the total levelised cost per kWh produced over thelifetime of the turbine. If the turbine is fairly new, the sharemay only be 10-15 per cent, but this may increase to at least20-35 per cent by the end of the turbine’s lifetime. As a

result, O&M costs are attracting greater attention, asmanufacturers attempt to lower these costs significantly bydeveloping new turbine designs that require fewer regularservice visits and less turbine downtime.

O&M costs are related to a limited number of costcomponents, including:

• Insurance;• Regular maintenance;

• Repair;• Spare parts, and• Administration.

Some of these cost components can be estimated relativelyeasily. For insurance and regular maintenance, it is possibleto obtain standard contracts covering a considerable shareof the wind turbine’s total lifetime. Conversely, costs forrepair and related spare parts are much more difficult topredict. And although all cost components tend to increaseas the turbine gets older, costs for repair and spare parts areparticularly influenced by turbine age; starting low andincreasing over time.

Due to the relative infancy of the wind energy industry, there

are only a few turbines that have reached their lifeexpectancy of 20 years. These turbines are much smallerthan those currently available on the market. Estimates of O&M costs are still highly unpredictable, especially aroundthe end of a turbine’s lifetime; nevertheless a certainamount of experience can be drawn from existing, olderturbines.


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Based on experiences in Germany, Spain, the UK andDenmark, O&M costs are generally estimated to be around1.2 to 1.5 eurocents (c €) per kWh of wind power produced,over the total lifetime of a turbine. Spanish data indicates

that less than 60 per cent of this amount goes strictly to theO&M of the turbine and installations, with the rest equallydistributed between labour costs and spare parts. Theremaining 40 per cent is split equally between insurance,land rental and overheads.

Figure 1.6, shows how total O&M costs for the periodbetween 1997 and 2001 were split into six differentcategories, based on German data from DEWI. Expensespertaining to buying power from the grid and land rental (as

in Spain) are included in the O&M costs calculated forGermany. For the first two years of its lifetime, a turbine isusually covered by the manufacturer’s warranty, so in theGerman study O&M costs made up a small percentage (2-3per cent) of total investment costs for these two years,corresponding to approximately 0.3-0.4 c € /kWh. After sixyears, the total O&M costs increased, constituting slightlyless than 5 per cent of total investment costs, which isequivalent to around 0.6-0.7 c €/kWh. These figures are fairly

similar to the O&M costs calculated for newer Danishturbines (see below).

Figure 1.6: Different Categories of O&M costs forGerman Turbines, as an Average over the Time Period1997-2001.


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Source: DEWI.

Figure 1.7 shows the total O&M costs resulting from a Danishstudy, and how these are distributed between the differentO&M categories, depending on the type, size and age of theturbine. For a three-year-old 600 kW machine, which wasfairly well represented in the study, approximately 35 percent of total O&M costs covered insurance, 28 per centregular servicing, 11 per cent administration, 12 per centrepairs and spare parts, and 14 per cent for other purposes.In general, the study revealed that expenses for insurance,regular servicing and administration were fairly stable overtime, while the costs for repairs and spare parts fluctuatedconsiderably. In most cases, other costs were of minorimportance.

Figure 1.7: O&M Costs as Reported for Selected Typesand Ages of Turbines


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Source: Jensen et al. (2002)

Figure 1.7 also shows the trend towards lower O&M costs fornew and larger machines. So for a three year old turbine, theO&M costs decreased from around 3.5 c €/kWh; for the old 55

kW turbines to less than 1 c €/kWh for the newer 600 kWmachines. The figures for the 150 kW turbines are similar tothe O&M costs identified in the three countries mentionedabove. Moreover, Figure 1.7 shows clearly that O&M costsincrease with the age of the turbine.

With regard to the future development of O&M costs, caremust be taken in interpreting the results of Figure 1.7.Firstly, as wind turbines exhibit economies of scale in termsof declining investment costs per kW with increasing turbinecapacity, similar economies of scale may exist for O&Mcosts. This means that a decrease in O&M costs will berelated, to a certain extent, to turbine up-scaling. Andsecond, the newer and larger turbines are better aligned


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with dimensioning criteria than older models, implyingreduced lifetime O&M requirements. However, this may alsohave the adverse effect that these newer turbines will notstand up as effectively to unexpected events.

The Cost of Energy Generated by Wind Power

The total cost per kWh produced (unit cost) is calculated bydiscounting and levelising investment and O&M costs overthe lifetime of the turbine, and then dividing them by theannual electricity production. The unit cost of generation isthus calculated as an average cost over the turbine’slifetime. In reality, actual costs will be lower than thecalculated average at the beginning of the turbine’s life, due

to low O&M costs, and will increase over the period of turbine use.

The turbine’s power production is the single most importantfactor for the cost per unit of power generated. Theprofitability of a turbine depends largely on whether it issited at a good wind location. In this section, the cost of energy produced by wind power will be calculated accordingto a number of basic assumptions. Due to the importance of the turbine’s power production, the sensitivity analysis willbe applied to this parameter. Other assumptions include thefollowing:

• Calculations relate to new land-based,medium-sized turbines (1.5-2 MW) that couldbe erected today;• Investment costs reflect the range given

in Chapter 2 - that is, a cost per kW of 1,100-1,400 €/kW, with an average of 1,225 €/kW. These costs are based on data from IEA andstated in 2006 prices;• O&M costs are assumed to be 1.45c€/kWh as an average over the lifetime of theturbine;


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• The lifetime of the turbine is set at 20years, in accordance with most technicaldesign criteria;• The discount rate is assumed to range

from 5-10 per cent per annum; in the basiccalculations, a discount rate of 7.5 per centper annum is used, although a sensitivityanalysis of the importance of this interestrange is also performed; and• Economic analyses are carried out on asimple national economic basis. Taxes,depreciation and risk premiums are not takeninto account and all calculations are based onfixed 2006 prices.

The calculated costs per kWh of wind-generated power, as afunction of the wind regime at the chosen sites, are shown inFigure 1.8. As illustrated, the costs range fromapproximately 7-10 c €/kWh at sites with low average windspeeds, to approximately 5-6.5 c €/kWh at windy coastalsites, with an average of approximately 7c €/kWh at a wind

site with average wind speeds.

In Europe, the good coastal positions are located mainly onthe coasts of the UK, Ireland, France, Denmark and Norway.Medium wind areas are mostly found inland in mid andsouthern Europe - in Germany, France, Spain, Holland andItaly - and also in Northern Europe - in Sweden, Finland andDenmark. In many cases, local conditions significantly

influence the average wind speeds at a specific site, sosignificant fluctuations in the wind regime are to beexpected even for neighboring areas.


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Figure 1.8: Calculated Costs per kWh of Wind-Generated Power as a Function of the Wind Regime atthe Chosen Site (Number of Full Load Hours)

Note: In this figure, the number of full load hours is used torepresent the wind regime. Full load hours are calculated asthe turbine’s average annual production divided by its rated

power. The higher the number of full load hours, the higher

the wind turbine’s production at the chosen site.

Source: Risø

Approximately 75-80 per cent of total power productioncosts for a wind turbine are related to capital costs - that is,the costs of the turbine, foundations, electrical equipmentand grid connection. Thus a wind turbine is capital intensive

compared with conventional fossil fuel-fired technologies,such as natural gas power plants, where as much as 40-60per cent of total costs are related to fuel and O&M costs. Forthis reason, the costs of capital (discount or interest rate)are an important factor for the cost of wind generatedpower, a factor which varies considerably between the EUmember countries.


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In Figure 1.9, the costs per kWh of wind-produced power areshown as a function of the wind regime and the discountrate (which varies between 5 and 10 per cent per annum).

Figure 1.9: The Costs of Wind-Produced Power as aFunction of Wind Speed (Number of Full Load Hours)and Discount Rate; the Installed Cost of WindTurbines is Assumed to be 1,225 €/kW


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Source: Risø

As illustrated in Figure 1.9, the costs ranges between around6 and 8 c €/kWh at medium wind positions, indicating that adoubling of the interest rate induces an increase in

production costs of 2 c €/kWh. In low wind areas, the costsare significantly higher, at around 8-11 c €/kWh, while theproduction costs range between 5 and 7 c €/kWh in coastalareas.

Development of the Cost of Wind-Generated Power

The rapid European and global development of wind powercapacity has had a strong influence on the cost of windpower over the last 20 years. To illustrate the trend towardslower production costs of wind-generated power, a case thatshows the production costs for different sizes and models of turbines is presented in Figure 1.10. Due to limited data, the


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trend curve has only been constructed for Denmark,although a similar trend (at a slightly slower pace) wasobserved in Germany.

Figure 1.10 shows the calculated unit cost for different sizesof turbines, based on the same assumptions used in theprevious section: a 20-year lifetime is assumed for allturbines in the analysis and a real discount rate of 7.5 perannum is used. All costs are converted into constant 2006prices. Turbine electricity production is estimated for twowind regimes - a coastal and an inland medium windposition.

The starting point for the analysis is the 95 kW machine,

which was installed mainly in Denmark during the mid1980s. This is followed by successively newer turbines (150kW, 225 kW), ending with the 2000 kW turbine, which wastypically installed from around 2003 onwards. It should benoted that wind turbine manufacturers generally expect theproduction cost of wind power to decline by 3-5 per cent foreach new turbine generation they add to their productportfolio. The calculations are performed for the total lifetime(20 years) of the turbines; calculations for the old turbines

are based on track records of more than 15 years (averagefigures), while newer turbines may have a track record of only a few years, so the newer the turbine, the less accuratethe calculations.

Figure 1.10: Total Wind Energy Costs per Unit of Electricity Produced, by Turbine Size (c €/kWh,constant 2006 prices).


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Source: Risø

The economic consequences of the trend towards largerturbines and improved cost-effectiveness are clearly shownin Figure 10. For a coastal position, for example, the average

cost has decreased from around 9.2 c € /kWh for the 95 kWturbine (mainly installed in the mid 1980s), to around 5.3c € /kWh for a fairly new 2,000 kW machine, an improvementof more than 40 per cent over 20 years (constant 2006prices).

Future Evolution of the Costs of Wind-Generated

PowerIn this section, the future development of the economics of wind power is illustrated by the use of the experience curvemethodology. The experience curve approach wasdeveloped in the 1970s by the Boston Consulting Group; itrelates the cumulative quantitative development of a


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product to the development of the specific costs (Johnson,1984). Thus, if the cumulative sale of a product doubles, theestimated learning rate gives the achieved reduction inspecific product costs.

The experience curve is not a forecasting tool based onestimated relationships. It merely shows that if the existingtrends continue in the future, the proposed developmentmay be seen. It converts the effect of mass production intoan effect upon production costs, without taking other causalrelationships into account. Thus changes in marketdevelopment and/or technological breakthroughs within thefield may change the picture considerably, as wouldfluctuations in commodity prices such as those for steel and

copper.

Different experience curves have been estimated for anumber of projects. Unfortunately, different specificationswere used, which means that not all of these projects can bedirectly compared. To obtain the full value of theexperiences gained, the reduction in price of the turbine( €/KW-specification) should be taken into account, as well asimprovements in the efficiency of the turbine’s production

(which requires the use of an energy specification ( €/kWh),see Neij et al. 2003). Thus, using the specific costs of energyas a basis (costs per kWh produced), the estimated progressratios range from 0.83 to 0.91, corresponding to learningrates of 0.17 to 0.09. So when the total installed capacity of wind power doubles, the costs per kWh produced for newturbines goes down by between 9 and 17 per cent. In thisway, both the efficiency improvements and embodied anddisembodied cost reductions are taken into account in theanalysis.

Wind power capacity has developed very rapidly in recentyears, on average by 25-30 per cent per year over the lastten years. At present, the total wind power capacity doublesapproximately every three to four years. Figure 1.11 showsthe consequences for wind power production costs, based onthe following assumptions:


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• The present price-relation should beretained until 2010; the reason why no pricereductions are foreseen in this period is dueto a persistently high demand for new windturbine capacity, and sub-supplier constraintsin the delivery of turbine components;• From 2010 until 2015, a learning rate of 10 per cent is assumed, implying that eachtime the total installed capacity doubles, thecosts per kWh of wind generated powerdecrease by 10 per cent; and• The growth rate of installed capacity is

assumed to double cumulative installationsevery three years.


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Growth of Wind Power Installed Capacity

(As on 31.03.2008)

State Year-wise Installed Capacity Addition (MW) Total

Upto Mar’01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-

07

2007-08 Capacity

(MW)

dhra Pradesh 91.790 1.500 - 6.000 25.850 0.900 0.800 - 126.8

jarat 164.905 8.650 7.150 29.275 51.175 84.600 328.950 580.130 1254.8

rnataka 50.650 22.500 52.460 81.430 200.400 170.930 264.750 187.000 1030.1

rala 2.350 - - - - - - 8.700 11.0

adhya Pradesh 21.690 - - - 6.250 11.200 17.450 69.250 125.8

aharasthra 198.060 196.545 2.000 6.250 48.750 545.100 483.600 276.075 1756.3

jasthan 9.110 8.380 44.440 129.580 93.860 74.525 111.750 70.450 542.0

mil Nadu 806.860 46.960 132.905 355.145 688.330 860.655 564.960 391.900 3847.71

est Bengal 1.000 - - - - 0.250 0.500 - 1.7

hers 1.300 - - - - - - - 1.3

TAL (MW) 1347.715 284.535 238.955 607.680 1114.615 1748.160 1772.760 1583.505

WIND

State-wise Wind Power Installed Capacity In India

State As on 31.03.2006 As on 31.03.2007 Additionduring2006-

07

Additionduring2007-

08

2008-09

TC

Demons-

trationProject

s(MW)

Private

SectorProjec

ts(MW)

TotalCapaci

ty(MW)

Demons-tration

Projects(MW)

Private

SectorProjec

ts(MW)

TotalCapacity

(MW)

(MW) (MW) (MW)till

30.11.08

(MW)

hra Pradesh 5.4 115.6 121.0 7.800 113.54 121.3

4

0.8 0.0 0.0

arat 17.3 320.8 338.1 17.840 656.52 674.3

6

328.9 580.13 179.80 1432.71

nataka 7.1 577.5 584.6 7.075 837.95 845.0

2

264.7 187.0 173.10 1184.45

ala 2.0 0.0 2.0 2.125 0.23 2.35 0.0 8.7 12.50 23.00

hya Pradesh 0.6 39.7 40.3 0.590 56.00 56.59 17.4 69.25 0.00 187.69

arashtra 8.4 992.9 1001.3 8.980 1471.3 1480.

3

483.6 276.07

5

82.00 1837.85

sthan 6.4 351.7 358.1 6.350 465.65 471.9

9

111.7 70.45 132.20 670.97

l Nadu 19.4 2873.1 2892.5 19.355 3440.1 3459.

4

565 391.90 250.30 4132.72

t Bengal 1.1 0.0 1.1 1.750 0.0 1.75 0.5 0.0 0.00 1.10

ers 1.6 0.0 1.6 1.6 0.0 1.6 0.0 0.0 0.00 3.20

al (All India) 69.6 5271.0 5340.6 73.165 7041.2 7114.

6

1773 1583.5

0

5

829.90 9587.14

B Y V I J A Y C H A N D E R K E E S A R A

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Graph showing Year-Wise Installed Capacity(MW) inINDIA


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CENTRAL INCENTIVES

A. Indirect Taxes

I. Custom Duty for Wind Energy Equipments andComponents (Notofication No.21/2002-customdated 01.03.2002, as amended by NotificationNo.11/2006 –customs dated 01.03.2006)

Description of Goods Rate

i) Wind operated electricity generators upto 30kW and wind operated battery chargers upto 30kW

5%

ii) Parts of wind operated electricity generatorsfor manufacturer/maintenance of wind operatedelectricity generators, namely :

a) Special bearingb) Gear Boxc) Yaw componentsd) Wind turbine controllerse) Parts of the goods specified at (a) to (d)abovef) Sensorsg) Brake hydraulicsh) Flexible coupling

i) Brake calipers

5%

5%

5%

5%

5%

25%25

%25

%25


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%

iii) Blades for rotor of wind operated electricitygenerators for themanufacturers/maintenanceof wind operated

electricity generators.

5%

iv) Parts for the manufacturer/maintenance of blades for rotor of wind operated electricitygeneration

5%

v) Raw materials for manufacturer of blades forrotor of wind operated electricity generators

5%

Conditions :

(a) If the importer at the time of importation

furnishes in all cases, a certificate to the Dy.Commissioner of Customs or Assistant Commissionerof Customs as the case may be, from an officer notbelow the rank of Deputy Secretary to theGovernment of India in the Ministry of Non-Conventional Energy Sources recommending thegrant of this exemption and in the case of the goodsat (ii) to (v) the said officer certifies that the goodsare required for the specified purposes; and

(b) Furnishes an undertaking to the said Dy.Commissioner of Customs Assistant Commissioner tothe effect that -

(i) in the case of wind operated electricity generatorsupto 30 kW, or wind operated battery chargersupto 30 kW, he shall not sell or otherwise disposeoff, in any manner, such generators or chargersfor a period of two years from the date of importation.

(ii) in case of other goods specified at (ii) to (v), heshall use them for the specified purpose, and

(iii) in case he fails to comply with sub-conditions (i)or (ii), or both conditions, as the case may be, heshall pay an amount equal to the differencebetween the duty leviable on the imported goodsbut for the exemption under this notification and


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that already paid at the time of importation.

II. Excise Duty [Notification No.6/2002 dated01/03/2002 (S.No.237 non-conventionaldevices/systems)(Notification No.6/2006 C.E. Dated01/03/2006)]

Devices/Systems exepted from Excise Duty:

(i) Wind operated electricity generator, itscomponents and parts thereof including rotor andwind turbine controller.

(ii) Water pumping wind mills, wind aero-generatorsand battery chargers.

III. Sales Tax

Exemption/reduction in Central Sales Tax and General

Sales Tax are available on sale of renewable energyequipment in various states.

B. Direct Taxes

1. Accelerated Depreciation benerit u/sec. 32 Rule 5 up to80% of the project cost in the first year plus additionaldepreciation @ 20% for projects being commissionedafter March 2005 with new plant & machinery.

2.Exemption on Income Tax on earnings from the projectu/sec. 80 IA for 10 years.


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Policies Introduced / Incentives Declared by theState Governments for

Private Sector Wind Power Projects

ITEMS STATES

AndhraPradesh

Gujarat Karnatak a

Kerala MadhyaPradesh

Maharashtra

Rajasthan

TamilNadu

WeBen

CaptiveUse

Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allow

Wheeling

At par withconventional

4% of energy

5% of energy +Rs.1.15/kWh as crosssubsidy for3rd partysale.

To bedecidedby SERC

2% of energy +transmission chargesas per ERC

2% of Energyas wheeling+ 5% as T&Dloss.

Below 132kV, 50%of normalchargesapplicableto 33 kVdecelaredbycommission +Surcharge+ Losses *

5% of energy

7% energopenaccescharg

Banking

NotAllowed

Allowed@2% of energyinput

NotAllowed

12 Months SixMonths

5% (12monthsFinancialyearApril to

March)

Buy-back Rateby SEB

Rs.3.50per kWhwithoutanyescalationfor 10years asper APGovt.Policyamendmen

t Date09.09.2008 subjectto approvalof APERC

Rs.3.50per kWh

(withoutanyescalation for 20yrs.)

Rs. 3.40per kWhwithoutanyescalationfor 10 yrsof commercial operation

Rs. 3.14per kWhwithoutanyescalation for 20yrs.

Year wiserates(Rs./kWh)from 1st to20th year

1st Yr –4.032ND Yr –3.86

3RD Yr –3.694 TH Yr –3.525 TH Yr – To20 TH Yr –3.36

Rs.3.50/kWh(First year of commissioning).

(escalation of 15 paise peryear for13yrs)

For Jaisalmer, JodhpurandBarmerdistrictRs.3.60per unitforinjectionin 33kV or

11kVsystem &Rs.3.71per unitforinjectionin EHV

Rs.2.90per kWh

Note : TNERChasproposedRs.3.40in itsdiscussio

n paper.However, finalorder isyet to beissued.

Rs.4 pkWh


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system.

For otherdistrictRs.3.78per unitforinjectionon 33kVor 11 kVsystem &Rs.3.89per unitforinjectionin EHVsystem.

ThirdPartySale

AllowedunderElectricityAct 2003subject toregulationframed byrespectiveSERCs

AllowedunderElectricity Act2003subjecttoregulation framedbyrespective SERCs




AllowedunderElectricity Act2003 subjectto regulationframed byrespectiveSERCs



AllowunderElectry 2003subjetoreguln frambyrespee SER

Otherncen-ives

IndustryStatus

E.D.Exempted,Demandcut 30%of windfarminstalledcapacity

NoelectricityDuty for 5yrs

NoelectricityDuty for 5

yrs

# Powerevacuationarrangement,ApproachRoad,ElectricityDuty, Loan tocooperativesocieties

ExemptionfromelectricityDuty@50%for 7years

enaltynVArh

onsumption

10 paiseper kVArhupto 10%

& 25 paiseper kVArhabove 10%

10 paiseperkVArh up

to 10%and 20paise perKVArhabove10%

Rs. 0.40Per kVArh

27 paiseper kVArh

25 paiseper kVArh

5 paiseper uearw.e.f.

01/04/2006 withescalationof 5% peryear

25 paiseperkVArh if

theration of kVArhdrawn toKWhexportedis upto10% and


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50 paiseperKVArhfor morethan10%.

Source : MNRE / SNAs

Notes :1. # Other incentives in Maharashtra are : (a) For

evacuation arrangement of wind energy project, 50%amount will be given as a subsidy through Green energyfund and 50% amount will be given as a loan withoutinterest to private developers. The loan will be repaid byMSEB/transmission licensees after commissioning andtransferring the ownership of evacuation arrangement toMSEB / transmission licensees in 5 equal yearly

installments. (b) 100% expenditure for construction of approach roads will be made through Green energy fund.(c) No electricity duty for 5 years for captive use. (d) 11%share capital will be provided to cooperative sector forseting up of wind power projects as a grant throughGreen energy fund.

2 . * 4.5% for supply to consumer directly on EHVsystemand 8.3% for supply using distribution licenseebelow 132 KV.

3. For latest and detailed information refer concerning

State Nodal Agencies / State Electicity RegulatoryCommissions.

Estimated Wind Power Potential in India

Sl.No.

State Gross Potential(MW)

1 Andhra Pradesh 8275

2 Gujarat 9675

3 Karnataka 6620

4 Kerala 875

5 Madhy Pradesh 5500


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6 Maharashtra 3650

7 Orissa 1700

8 Rajasthan 5400

9 Tamil Nadu 3050

10 West Bengal 450

Total 45195

Note :Gross potential is based on assuming 1% of landavailability for wind power generation in potential areas.

(Source : MNRE (Erstwhile MNES))

Abstract of wind monitoring Stations in India(As on 31st March, 2008)

Sl.

No

.

State /

Union

Territory

Total

Stations

Establis

hed

No. of

Stations

in

operatio

n

Stations with

Annual Avg.

WPD > 200 W/m2

at 50 m

height

1 Andaman &

Nicobar

14 2 1

2 Andhra

Pradesh

65 4 35

3 Arunachal

Pradesh

9 0 -


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4 Assam 8 1 -

5 Chhattisgar

h

3 - -

6 Goa 1 - -

7 Gujarat 62 3 38

8 Haryana 7 1 -

9 Himachal

Pradesh

10 1 -

10 Jammu &Kashmir 9 2 -

11 Jharkhand 2 - -

12 Karnataka :

MNES

Stations

KPCL

Stations

50

19

14

-

21

8

13 Kerala 27 2 16

14 Lakshadweep

10 - 8

15 Madhya

Pradesh

36 6 7

16 Maharashtr

a

91 4 32

17 Manipur 5 1 -

18 Mizoram 5 - -


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http://www.windpowerindia.com/statwind2.html#kr

http://www.windpowerindia.com/statwind2.html#ld


http://www.windpowerindia.com/statwind2.html#mp


http://www.windpowerindia.com/statwind2.html#ms


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19 Orissa 11 - 6

20 Punjab 11 - -

21 Pondichery 4 - -

22 Rajasthan 38 - 7

23 Sikkim 3 - -

24 Tamil Nadu 67 3 44

25 Tripura 3 - -

26 Uttaranchal 11 - 1

27 Uttar

Pradesh

7 4 -

28 West

Bengal

10 - 1

Total 598 48 225


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http://www.windpowerindia.com/statwind2.html#tn

http://www.windpowerindia.com/statwind2.html#up


http://www.windpowerindia.com/statwind2.html#wb



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State-wise List of Wind Monitoring Stations

for which Micro Survey has been done(As on 31.03.2008)

Sl.No.

Station

Andhra Pradesh

1 Bhimunipatnam, Dist.Vishakapatnam

2 Jamalamadugu, Dist.Cuddapah

3 Kadavakallu, Dist.Ananthapur

4 Kondamithipalle, Dist.Kurnool

5 M.P.R. Dam, Dist.Ananthapur

6 Nallakonda, Dist.Ananthapur

7 Nazirabad, Dist.Rangareddy

8 Pampanoorthanda, Dist.Ananthapur

9 Ramagiri, Dist.Ananthapur

10 Thirumalaypalli, Dist.Cuddapah

11 Vajrakarur, Dist.Ananthapur

Gujarat

12 Amrapar, Dist.Junagadh

13 Bamanbore II, Dist.Rajkot

14 Bhandariya, Dist.Bhavnagar

15 Dhank, Dist.Rajkot


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16 Gala, Dist. Jamnagar

17 Godladhar, Dist. Rajkot

18 Haripar, Dist.Jamnagar

19 Jafrabad, Dist.Amreli

20 Jamanvada, Dist.Kachchh

21 Kalyanpur, Dist.Jamnagar

22 Kukma, Dist. Kachchh

23 Mahidra, Dist. Surendranagar

24 Motisindholi, Dist.Kachchh

25 Mundra, Dist. Kachchh

26 Navibandar, Dist.Junagadh

27 Okha, Dist.Jamnagar

28 Poladiya, Dist. Kachchh

29 Sanodar, Dist.Bhavnagar

30 Sinai, Dist. Kachchh

31 Surajbari, Dist. Kachchh

Karnataka

32 B.B. Hills, Dist.Chikamagalur

33 Chalamatti, Dist.Hubli

34 Chikodi, Dist.Belgaum

35 Gokak, Dist.Dharwad

36 Hanamsagar, Dist.Raichur

37 Hanumanahatti, Dist.Belgaum


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38 Horti, Dist.Bijapur

39 Jogimatti, Dist.Chitradurga

40 Kamkarhatti, Dist.Belgaum

41 Kanderayanahalli, Dist.Haveri

42 Kappatta Hills, Dist.Gadag

43 Mannikeri, Dist.Belgaum

44 Mavinhunda, Dist.Belgaum

45 Sangundi, Dist.Bijapur

46 Subramanyahalli, Dist. Bellary

Kerala

47 Kanjikode, Dist.Palakkad

48Kulathumedu, Dist. Idduki

49 Nallasingham, Dist. Pallakad Madhya Pradesh

50 Kukru, Dist.Betul

51 Mahuriya, Dist.Shajapur

52 Nagda, Dist. Dewas

53 Sendhwa, Dist.Khargon

54 Valiyarpani, Dist. Khargon

Maharshtra

55 Alamprabhupathar, Dist.Kolhapur


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56 Amberi, Dist.Satara

57 Bramanawel, Dist.Dhule

58 Dhalgaon, Dist.Sangli

59 Dongarwadi, Dist.Sangli

60 Gudepanchgani, Dist.Sangli

61 Kavdya Dongar, Dist.Ahmadnagar

62 Khandke, Dist.Ahmadnagar

63 Kolgaon, Dist.Ahmadnagar

64 Kotoli, Dist.Kolhapur

65 Lonavla, Dist.Pune

66 Matrewadi, Dist.Satara

67 Motha, Dist.Amravathi

68 Sautada, Dist.Beed

69 Takkarmauli, Dist.Dhule

70 Thoseghar, Dist.Satara

71 Vankusawade, Dist.Satara

72 Vijayadurg, Dist.Sindhudurg

Orissa

73 Damanjodi, Dist.Koraput

74 Puri, Dist.Puri

Rajasthan

75 Devgarh, Dist.Chittourgarh


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76 Jaisalmer, Dist.Jaisalmer

77 Phalodi, Dist.Jodhpur

Tamil Nadu

78 Achamkuttam, Dist.Thirunelveli

79 Alagiyapandiyapuram, Dist.Thirunelveli

80 Andipatti, Dist.Madurai

81 Ayikudi, Dist.Thirunelveli

82 Edayarpalayam, Dist.Coimbatore

83 Ennore, Dist.Chengelpet

84 Maivadi, Dist.Coimbatore

85 Manglapuram, Dist.Thirunelveli

86 Mettukadai, Dist.Periyar

87 Naduvakurichi, Dist.Thirunelveli

88 Onamakulam, Dist.Tuticorin89 Ottapidaram, Dist.Tuticorin

90 Pongalur, Dist.Ciombatore

91 Pulavadi, Dist.Coimbatore

92 Pusaripatti, Dist.Coimbatore

93 Puliyamkulam, Dist.Thirunelveli

94 Sankaneri, Dist.Thirunelveli

95 Ovari, Dist.Thirunelveli

96 Vakaikulam, Dist.Tuticorin

West Bengal


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97 Gangasagar, Dist.24 Paraganas

Notes :

i. The Micro Survey reports for the abovestations are available for sale at C-WET, Chennai.

ii. State-wise estimated potential can be seen

in Directory on Indian Windpower 2008.


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SERVICE PROVIDERS

O&M Agencies

Sl.No. Name

1 Batliboi enXco Pvt. Limited

2 Golden Non Conventional Energy Systems Pvt. Ltd.

3 Henel Engineers Pvt. Ltd

4 Hofincons Infotech & Ind.Service Ltd

5 Kalani Industries Limited

6 Kintech Systems (P) Ltd

7 M.P.Windfarms Limited162, Maharana Pratap Nagar, Zone-II,Bhopal - 462 011Tel : 0755-553681, 555479 Fax : 0755-550481E-mail : [email protected]

8 Pentagon WTG Services

9 Rajee Wind Energy Services

10 RPP Windtech Services

11 R.S.Windtech Engineers (P) Ltd.

12 SANA Engineering Company

13 Sastha Engineers & Consultants

14 Simms Wind Power Services

15 Spectrum WEG Services

16 Sri Ganesh Wind Power Engineers Pvt. Ltd.

17 Star Energy Systems


Page 161

mailto:[email protected]





List of Private Wind farm Owners in India

10 MW and Above

As on 31.03.2008

Sl. Name of Owner Total

No. (MW)

1 DLF Limited 161.200

2 Madras Cement Ltd. 136.085

3 Enercon Windfarms Hindustan P. Ltd. 128.800

4 MSPL Limited 113.150

5 HZL 107.200

6 Essel Mining & Industries Ltd. 75.000

7 Tata Power Company Ltd. 71.150

8 Aban Loyd Chiles O. Ltd. 65.985

9 Bajaj Auto Ltd 65.200

10 Rajasthan State Mines & Mineral Ltd. 52.300

11 Jaiprakash Associates Limited 49.000

12 REI Agro Limited 46.100

13 Nuziveedu Seeds Ltd 45.850


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14 Gujarat NRE Coke Ltd 45.500

15 Patnaik Minerals Pvt Ltd 45.400

16 NEPC Micon 43.850

17 Vijayanand Roadlines Ltd 42.500

18 Ramgad Minerals & Mining Pvt. Ltd. 41.900

19 BP Energy India Pvt Ltd 40.000

20 Simran Wind Project Pvt Ltd 39.300

21 Vishal Export Overseas Ltd 39.225

22 Gangadhar Narsighdas Agrawal 38.450

23 Reliance Innoventures Pvt Ltd 37.500

24 Rajasthan Ren. Energy Corp. Ltd. 36.450

25 Gujarat Fluorochemicals Ltd. 35.100

26 Soundararaja Mills Ltd. 34.800

27 Godavat Pan Masala 33.880

28 Enercon (Windfarm) India Ltd. 33.600

29 KPR Mill Pvt. Ltd. 33.170

30 Gujarat Gardian Limited 31.600

31 Grace Infrastructure (P) Ltd. 31.000

32 KS Oil Ltd. 30.800

33 MSPL GROUP 30.000

34 Dhariwal Industries Ltd 29.950

35 Tata Finance Ltd 29.450

36 Ashok Leyland Fin. Ltd 29.175


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37 Sapthagiri Distilleries 28.500

38 Ruchi Infrastructure Ltd 28.200

39 Shree Naman Developers Limited 28.125

40 Roaring 40 28.000

41 Tamilnadu Newsprint & Paper Ltd 28.000

42 Ellora Times Ltd. 27.900

43 Mohan Breweries & Distilleries 27.150

44 Savita Chemicals Ltd 26.550

45 Shanmugavel Group 25.500

46 Best & Co. 25.000

47Shraddha Construn. & PowerGen.

P.Ltd.25.000

48 Indo Wind Energy Ltd 24.900

49 SREI 24.800

50 Enercon Wind Farms (Raj) Pvt. Ltd. 24.000

51 Power Finance Corp. 24.000

52 GACL 23.750

53 CEPCO Industries Pvt. Ltd. 23.575

54 Ghodawat Industries Ltd 23.500

55 Premier Fine Yarns Pvt. Ltd. 22.850

56 NEG-Micon (I) P. Ltd. 21.150

57 GI Windfarms Ltd. 21.000

58 Nishkalp Investment & Trading 20.950

59 TCS Textiles Ltd. 20.750


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60 Aarvee Denims & Exports Ltd. 20.500

61 Loyal Textile Mills Ltd 20.450

62 RCI Power Ltd 20.000

63 Sun N Sand Hotel Pvt. Ltd. 19.050

64 Jindal Alluminiam Ltd 19.040

65 Ratnamani Metals & Tubes Ltd. 19.000

66 VSL Mining Company (P) Ltd 19.000

67 Weizmann Ltd 19.000

68 Lakshmi Machine Works Ltd 18.200

69 DJ Malpani 18.150

70 CPCL 17.600

71 Suzlon Infrastructure Limited 17.500

72 Chettinad Cement Corp. 17.350

73 Arvind A Traders 16.850

74 Dalmia Cements (B) Ltd 16.525

75 Surajbari Windfarm Dev. Pvt. Ltd 16.500

76 Premier Spg & Wvg Mills Pvt. Ltd 16.250

77 Rasi Seeds (P) Ltd. 16.250

78 Taurian Iron & Steel Co. Pvt. Ltd. 16.250

79 Bannari Amman Spinning Mills Ltd. 16.200

80 Bharat Forge Ltd 15.930

81 Jayajyoti & Co. Ltd 15.700

82 Goetze (I) Finance Services Ltd 15.580

83 Apollo Tyres Ltd. 15.500


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84 Indian Petrochemicals Co. Ltd 15.315

85 MRF Ltd 15.300

86 Topaz Investments Pvt Ld 15.300

87 Aryan Coal Benification Pvt. Ltd. 15.000

88 Bharati Shipyard Ltd 15.000

89 Enercon Wind Farms Krishna Ltd. 15.000

90 GSEC 15.000

91 Minerals Enterprises Ltd. 15.000

92 MMTC Limited 15.000

93 Muthoot Fincorp Ltd. 15.000

94 Sanjay Ghodawat 15.000

95 Suma Shilp Limited 15.000

96 Manganese Ore (India) Ltd. 14.400

97 Fair Deal Supplies Pvt. Ltd. 14.260

98 Shanmugavel Mills 14.250

99 VS Lad & Sons 14.200

10

0Shah Promoters & Developers 14.000

10

1Ramco Industries Ltd. 13.900

10

2 Ambika Cotton Mills Ltd. 13.800

10

3Prakash Industries Ltd 13.775


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10

4C Mahendra Exports Ltd 13.750

10

5

Textool Co. Ltd 13.400

10

6Rajapalayam Mills Ltd. 13.300

10

7V.M. Salgaonkar & Bro Pvt. Ltd. 13.300

10

8 Y Mahabaleswarappa & Sons 13.300

109

Sree Narasimha Textiles Ltd. 13.200

11

0Echjay Industries Pvt. Ltd. 13.050

11

1Shriram City Union Fin. 13.050

11

2 Mahanagar Developers 12.800

11

3SCM Creations 12.750

11

4Metal Powder Co. Ltd 12.575

11

5KRBL Limited 12.500

11

6 Tirupur Textiles Pvt. Ltd. 12.500

11

7Shriram Investments Ltd 12.450


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11

8Best International 12.400

11

9

Prabhu Spinning Mills (P) Ltd. 12.300

12

0Bellary Iron Ores Pvt. Ltd. 12.250

12

1Era Infrastructure (India) Limited 12.150

12

2Velatal Spinning Mills Ltd 12.110

123

Advik-Hi-Tech Pvt. Ltd. 12.100

12

4Ansal Properties & Infrastructure Ltd 12.000

12

5Avinash N Bhosale 12.000

12

6 Tamilnadu Petro Products 12.000

12

7Cheran Spinners Ltd. 11.900

12

8Suzlon Towers & Structures Limited 11.750

12

9Sambandam Spinning Mills 11.625

13

0 Transport Corporation of India Ltd. 11.500

13

1Usdev International Ltd 11.330


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13

2Bhoruka Power Co. Ltd. 11.300

13

3

Subhash Projects & Mktg 11.285

13

4Saurashtra Fuels Pvt. Ltd. 11.250

13

5DCW Limited 11.200

13

6Revathi Equipment Ltd 11.150

137

Ruchi Soya Industries Ltd. 11.050

13

8Walden Properties Pvt Ltd 11.050

13

9 Texmo Industries 10.840

14

0 Charisma Builders 10.800

14

1Rajpalayam Mills 10.750

14

2Emco Limited 10.500

14

3Energy Infratech Pvt Ltd 10.500

14

4Maris – Karnatka 10.500

14

5Elecon Engineering Co. Ltd. 10.450


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14

6Srei Infrastructure Finance Ltd. 10.400

14

7

Khatau Narbheram & Co 10.250

14

8Kandagiri Spinning Mills 10.125

14

9UTI Ltd. 10.125

15

0APSRTC 10.000

151

Deepak Ferti.& Petrochem.Corpn Ltd. 10.000

15

2Era Constructions India Ltd 10.000

15

3Lanco Infratech Ltd 10.000

15

4 Nuclear Power Corpn. of India Ltd 10.000

15

5Sri Ranganathar Industries P. Ltd. 10.000

TOTAL3841.5

10

State wise Communication Address

1) A & N Islands

Superintending Engineer,

Andaman & Nicobar Islands

Admn.,

Port Blair - 744101,

2) Andhra Pradesh

Managing Director, Non-

conventional Energy

Development

Corporation of Andhra


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Tel : 03192-232404, 232685

Fax : 233365

Pradesh (NEDCAP),

5-8-207/2, Pisgah Complex,

Namapalli,

Hyderabad - 500001

Tel : 040-23202391,

23203692 , 23203376

Fax : 040-23201666

Email : [email protected]

3 ) Gujarat Director,Gujarat Energy DevelopmentAgency(GEDA),

Block No. 11 & 12, 4th FloorSector - IIUdyog Bhawan,Gandhi Nagar - 382 017Email : [email protected]

4) KarnatakaManaging Director,Karnataka RenewableEnergy Development Ltd.

(KREDL),No.19, Maj.Gen. A.D.Loganadhan INA Cross,Queens Road,Bangalore – 560 052

Tel : 080-2282220-1Fax : 080-2257399Email : [email protected]

5 ) Kerala Director, Agency for Non-conventional Energy andRural Technology(ANERT),P.B.No. 1094,Kesavadasapuram,

Thiruvananthapuram -695004,

Tel : 0471-2449854,2440121-2Fax : 0471-2449854Email : [email protected]

6) Lakshadweep

Executive Engineer (Ele.)

Union Territory of

Lakshadweep, Department

of Electricity,

Kavaratti - 682555,

Tel : 04896-262127

Fax : 04896-262936,262140

7)Madhya Pradesh

Managing Director,Madhya

8) Maharashtra

Director,


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Pradesh Urja Vikas Nigam Ltd.

(MPUVN),

B-Block, Urja Bhawan,

Main Road No.2., Shivaji

Nagar,

Bhopal - 426 016,

Tel : 0755-2553595, 2556245

Fax : 0755-2553122


Maharashtra Energy

Development Agency

(MEDA),

MHADA Commercial

Complex,

S.No.191-A, Phase-I,

Opp. Tridal

Nagar,Yerawada,

Pune - 411006

Tel : 020-26683633,

26683634

Fax : 020-26683631


9) Orissa

Chairman & Chief Executive,

Orissa Renewable Energy

Dev. Agency(OREDA),

S-3/59, Macheshwar Industrial

Estate,

Bhubaneshwar - 751010 Tel : 0674-2580660, 2480258

Fax : 0674-2580368

10) Rajasthan

Managing Director

Rajasthan Renewable

Energy Corporation Ltd

(RRECL)

(Formerly REDA & RSPCL)

E-166, Yudhisthir Marg, C-Scheme,

Jaipur – 302 004

Tel : 0141 – 2384055,

2384077

Fax : 0141 - 2381528

11) Tamil Nadu

Chairman & Managing

Director, Tamil Nadu Energy Dev.

Agency(TEDA),

E.V.K. Sampath Maaligai,

5th Floor, College Road,

Chennai - 600006,

12) Uttar Pradesh

Director, Non-Conventional

Energy DevelopmentAgency(NEDA),

Vibhuti Khand, Gomati

Nagar, Lucknow-226010,

Tel : 0522-2392942-

3,2392872-4


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CONCLUSIONS

The nature of wind energy deals is changing. Although manysmall, privately-owned projects remain, there has been asubstantial shift towards bigger, utility-owned projects. Thischange brings new money to the industry, reducesdependence on banks for initial funding and brings strong

sponsors.

Projects are growing and large-scale offshore activity isincreasing. Since banks favor larger projects, this is a verypositive change. If the general economic picturedeteriorates, this may give rise to certain misgivingsconcerning project finance, in comparison to the last fewyears, but political and environmental support for renewableenergy means that the funding of wind energy remains avery attractive proposition. Obtaining financing for the large-scale expansion of the industry will not be a problem.


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ANNEXURE-I

Project on Installation of Wind Energy Generators forcaptive use of wind power

Installed capacity: 1.00MW

Detailed Project CostAnnexure-I (a)

(Rs. Lakh)

S.No.

Description Rate/unit(Rs.in Lakh)

Qty. orno. of units

Amount

1 Purchase of land, landdevelopment and fencingcharges

Lump sumamount 4.00acres 4

2 Supply of WEG of 250 kWcapacity each

100 4 400

3 Packaging , handling,loading , transportation,unloading and insurancecover till erection of

WEGs

1 4 4

4 Foundation and othercivil structures

3 4 12

5 Electrical and Transformers 33 KV

4.5 4 18

6 Erection and 3 4 12


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Commissioning

7 Other project costincluding charges forinfrastructure

development @ Rs.25.00Lakh per MW for 1.00MW

25 1 25

8 Cost of 33 KV OHT Line ( External andinternal) 0.15 KM assumed approx. @ Rs. 6.50lakh per KM or as actual

0.98

9 Total 475.98

Annexure-I (b) Detailed Project Cost

Installed capacity: 1.00 MW

(Rs. Lakh)

S.No. DescriptionRate/unit(Rs.Lakh)

Qty. orno. of units

Amount

1Purchase of land,land developmentand fencing charges

Lump sumamount

4.00acres

4.00

2Supply of WEG of 250 kW capacityeach

100.00 4 400.00

3

Packaging ,handling, loading ,transportation,unloading andinsurance cover tillerection of WEGs

1.00 4 4.00

4Foundation andother civil structures

3.00 4 12.00

5 Electrical and 4.50 4 18.00


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Transformers 33 KV

6Erection andCommissioning

3.00 4 12.00

7

Other project cost

including charges forinfrastructuredevelopment @ Rs.25.00 Lakh per MWfor 1.00 MW

25.00 1 25.00

8

Cost of 33 KV OHTLine ( External andinternal) 0.15 KMassumed approx. @

Rs. 6.50 lakh per KMor as actual

0.98

9 Total 475.98

ANNEXURE-II


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ANNEXURE-III


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26941042 wind power sector in india

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