potential of offshore energy in india

Copyright ©2009 ShARE. All Rights Reserved

Offshore wind energy- Lessons India can learn from Europe

Presentation on xx/xx/xxxx by:Parth BhatiaJunior member,Energy Network ShARE IITB

Copyright ©2008 ShARE. All Rights Reserved 2

Executive Summary

India needs to develop renewable energy to meet its energy consumption growing at 4.9% per year

Wind energy contributes 70% of India’s renewable installed capacity and has great future potential

India is exploring offshore wind energy as a potential source of energy Offshore wind energy has many advantages over onshore like better wind

resources and reduced land conflicts It also has disadvantages like environmental impact and lack of infrastructure

but high cost is the biggest challenge Offshore is still a distant vision because of high cost, no policy incentives, lack

of industrial will and poor wind resources Europe is the world leader in offshore wind power producing 2914 MW with

Germany and UK leading the way The development of offshore wind power in Europe is driven by government

policies and financial incentives India can learn from Europe the lessons of providing financial incentives,

regulating growth to make offshore a reality


India needs to develop renewable energy to meet its energy consumption growing at 4.9% per year

India needs to nearly double its current installed capacity by 2017

In order to maintain its current growth rate of 8%, India needs an installed capacity of 300 GW by 2017 as against 159 GW in 2008

20002002

20042006

2008

295 308 344 379 433

Energy Consumption in India (MTOE)

4.9%

Fossil fuels contribute nearly 96.4% of the commercial energy consumption in India

• Peaking oil and coal prices make this mix unsustainable over next 50 years

Renewable energy offers a hedge against fossil fuel hikes and volatility and provides a buffer against energy security concerns

Renewable energy can support India’s attainment of climate goals

• India has committed to reduce the emission intensity of GDP to 75% of 2005 levels by 2020 by having15% renewable energy by 2020

Renewable energy is a better option than conventional energy to meet this demand

Sources: NREL: India renewable energy status report



Wind energy has great benefits like nearly negligible emissions and wide availability

Wind energy is growing at a rate of 14% and is estimated to quadruple in next 10 years

Wind energy could account for 12% of global CO2 emissions reduction by 2050

It is widely available, renewable and could help to reduce the dependence on fossil fuels and provide energy security

As compared to thermal power plants , it consumes almost no water which makes it suitable to water stressed areas

Wind energy industry can provide jobs to 84,000 people in India by 2020

Growth of installed wind power capacity in India

Sources: GWEC:IWO 2010,IEA

2006 2008 2009 2010 2015 20200

10

20

30

40

50 GWEC Predictions

5.3 8.7 10.2

46.1

12.6

Inst

alle

d w

ind

capa

city

(GW

)

24.7

Source Capacity(MW) Generation (GWh)

Wind 100,000 219,000

Biomass 16,881 89,000

Solar PV 200,000 350,000

Total 662,881 2,050,000

14% growth

Grid connected renewable energy potential


xx

Wind energy has great benefits like nearly

negligible emissions and wide availability


Wind energy is growing at a rate of 14% and

is estimated to quadruple in next 10 years


India is exploring offshore wind energy as a potential source of energy

India has a coastline of 76,000km with moderate potential on west coast but most of the areas have low potential except Gujarat & TN

A study was undertaken to estimate the offshore potential at Dhanushkodi in Tamil Nadu

• It was found that the average wind speed at 120 m is 19.3m/s which is very high

The CWET has undertaken a study to estimate the offshore potential in India, which is expected to be completed by 2013

Industry giants such as Siemens, Areva, ONGC and GE are exploring offshore possibilities in India

Tata power has already submitted a formal request to Gujarat government to approve its bid to build an offshore plant

Sources: MNRE: IWEO 2011


Offshore wind energy has many advantages over onshore like better wind resources and reduced land conflicts

The relative competitive of technologies in 2008 and 2018

Onshore wind farms face conflicts over land use and good sites unavailable in many countries

• Large offshore wind farms can be placed since a large area is available at a given site

Power generation from offshore wind turbines benefits from stronger and steadier wind speeds and less air turbulence.

• Offshore turbines thus produce more electricity per installed generation capacity than onshore

Larger wind turbines can be installed at lower heights due to favorable wind and lower transportation bottlenecks as in the case of onshore

The visual, noise and environmental impact of offshore turbines is lower as compared to onshore

The wind resources are better for offshore turbines and technological maturity is increasing

Sources:Markard et al, Esteban et al.


It also has disadvantages like environmental impact and lack of infrastructure but high cost is the biggest challenge

Turbin

e

Found

ation

Electri

cal in

stall

ation

Projec

t man

agem

ent

Enviro

nmen

tal a

nalys

is

Misc

ellan

eous

Land

rent

815

350 335

10050

10 0

928

80

157

300 15

48Inve

stm

ent

(100

0 eu

ro/

MW

)

The primary cost in onshore is tur-bine whereas offshore is costlier in almost everything else

Land given free in

offshore

Investment distribution in offshore and onshore

Onshore- 1227

Offshore- 1680

The net cost of power produced by an offshore wind farm is 1.5-2 times that of onshore wind

farm

High O&M expenses add to investment to take the net cost of offshore to nearly 2.1M euro/MWSources: EWEA:Economics of wind, Markard et al.

Offshore wind farms could harm or potentially destroy the habitat of fish and marine mammals

• They could also cause bird fatalities but studies show this rate is very low

There is no existing infrastructure to facilitate installation and grid connection

• Windmills need specialized equipment and expertise for installation and operation

_ Ex. Special cranes and carrier ships• Existing grid connectivity is scarce in coastal

areas

Strong storms and salt water require more robust and reliable turbines and cables leading to high maintenance and installation cost

Available sites are restricted due to nature preservation, water depth, distance from coast, nautical routes

Apart from cost, environmental impact and lack ofInfrastructure could prove to be great challenges


Offshore is still a distant vision due to high cost, no policy incentives and lack of industrial will

Cost of offshore an wind turbine is $ 1.7-2.8million/MW ($1.2 for onshore) which cannot be competitive without government subsidies, financial incentives and policy provisions

Onshore wind energy sites are available, less costly and risky which causes most energy companies to prefer onshore

There is no data regarding wind speeds, density, seismic activity, bathymetric data, maritime activity, water depth etc. for wind resources at offshore locations

There is no government agency or framework to guide and promote offshore wind projects in India• There is a need for a framework to integrate offshore wind energy with power infrastructure, oil and

natural gas industry, and maritime industry• There is no govt. sponsored R & D to adapt offshore to Indian climate and economy • There is a need for state involvement and government-industry partnerships to increase investor

confidence

There is no established supply chain to sustain the industry • There are no companies in India like A2SEA in Europe specializing in installation of offshore turbines

or other companies with skills to perform grid connection and transportation of turbine parts

Tackling each issue systematically forms the roadmap for offshore wind here on

Sources: CWET, EWEA :Economics of Wind


Europe is the world leader in offshore wind power producing 2914 MW with Germany and UK leading the way

UK

Denam

ark

Netherla

nds

Sweden

Ger

many

0

2000

4000

6000

8000

10000

12000

590.8 409.2 246.8 133.3 12

8755.8

1276

2833.83312

10927.5

Installed by 2008 end Consented

Operating and planned offshore wind farms in 2008 (in MW) Total installed(2010) : 2914 MW

Total consented : 37,441 MW

Total planned : >100GW

Capacity added-2009 : 582MW

Growth rate in 2009: 56% Capacity added-2010 : 883MW

Growth rate in 2010: 51%

EWEA target by 2020 : 40 GW

Europe’s share of world market : 96%

Sources: EWEA, WWEA

There is enough offshore wind energy in Europe to meet its demands 7 times over


The development of offshore wind power in Europe is driven by government policies and financial incentives

Financial incentives

Govt. Regulations for leasing

land

Denmark Germany UKFactor

Feed-in price

Tax Exemptions

Renewable Energy credits

Other subsidies

Fee

Term

Competition

Selection of site by regulators

13.2c/kWh 9.1 eurocents/kWh N/A

20 euro/ton carbon

tax exemption N/A 4.3 p/kWh

N/A

N/A N/A

N/A

5 p/kWh

Construction grants

One time fee up to 500,000 pounds

NoneNone

25 years 25 years Up to 50 years

First come first serve

Quality of proposalLowest feed-in

YesNoYes

Sources: Snyder et al


India can learn from Europe the lessons of providing financial incentives, regulating growth to make offshore a reality

Lesson Analysis of the lesson and its success in Europe

Government policies and financial incentives should be

implemented in India

India should encourage

large energy firms to

take the lead

India should aim for maturity of

the technology by regulating growth rate

Feed in tariffs: The developer submits a bid to build an offshore wind farm at a certain feed-in price, ensuring that the operation is, according to their plans, profitable

Tax exemptions: Renewable energy developers don’t pay mandatory carbon tax that other developers pay

Renewable energy credits: Companies get renewable energy credits which they can trade with utilities producing CO2

The total energy subsidies in UK amount to around 18c/kWh which makes production from offshore profitable

Large corporations will have more available capital and will be able to raise additional capital at lower interest rates

A large company can use experience gained to better construct subsequent projects but small companies are too indebted to do more than one large project

European wind farms have been developed by some of the largest energy companies including Vattenfall (Sweden), Shell (Netherlands), DONG (Denmark) and Centrica (UK).

The development rate in Europe was intentionally kept slow by the policy makers in the first 10-12 years

The advantage of this rate of development was that it allowed for the development and maturity of infrastructure, institutional capacity and experience

Since 2001 annual installations in Europe have grown exponentially with 883 MW of offshore wind energy installed in 2010 alone

Sources: Snyder et al., EWEA Annual Statistics 2010, Esteban et al

potential of offshore energy in india

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years wind energy

year wind energy

xxwind energy

energy consumptiongrowing

renewable energy potential

years renewable energy

areas wind energy industry

offshore wind turbinesbenefits