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Suzlon Energy Ltd.

1 Suzlon wind farm in Utah, USA

SUZLON – Approach to

Climate Change

Seminar on Business Response to Climate ChangeCII-ITC Centre of Excellence March 22, 2013

Saurabh Yadav –Head Corporate and Policy Affairs

Suzlon Energy Ltd.Preamble....what we all know

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• Depleting natural resources

• Environmental impact; Global

warming, Climate change

• Energy Security

• Global GDP growth, ever

increasing energy consumption

• Rising cost of fossil fuels

• Global regulatory framework

Renewable energy has emerged as most promising solution for energy &

environment issues

Renewable energy has emerged as most promising solution for energy &

environment issues

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Suzlon Energy Ltd.Reality Check…..

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In 2012, despite a slowing global economy, India’s electricity demand continued to rise.

Electricity shortages are common, and over 40% of the population has no access to

modern energy services.

India’s electricity demand is projected to more than triple between 2005 and 2030.

In the recently released National Electricity Plan (2012) the Central Electricity Authority

projected the need for 350-360 GW of total generation capacity by 2022.

Despite major capacity additions over recent decades, power supply struggles to keep up

with demand. Current energy deficit of 10% and peak deficit of 12%

According to the IEA’s World Energy Outlook (2011) India’s energy demand increases by a

compound annual growth rate (CAGR) of 3.1% from 2009 to 2035, which is more than

double the world’s energy demand growth at a CAGR of 1.3% for the same period.

12th Plan period (April 2012 to March 2017) has fixed a reference target of 15,000 MW in

new wind capacity additions, and an aspirational target of 30,000 MW (RE).

Poverty reduction and economic growth are the prime objectives of the National

Integrated Energy Policy; and energy is the key driver of development.

Suzlon Energy Ltd.The Renewable Energy (RE) Scenario in India

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43

45

54

62

70

78

45

10

24

3

11

10

5

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

FY05 FY06 FY07 FY08 FY09 FY10

Solar Power

Cogeneration

Small Hydro

Biomass

Wind Power

Cumulative growth of installed capacity of RE by various sectors

• The 18 GW strong RE sector in India

is 10% of the country’s cumulative

power sector capacity and adds 4%

of the total power generation.

• Wind power alone accounts for more

capacity and net power generation

than the nuclear power in India

Wind Energy

Source: MNRE

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Suzlon Energy Ltd.

Key drivers for wind sector which influence

Sectoral Viability

Climate change CO2 Emissions Scenario

Political

Support /Will

Energy security and cost

Environment focus +

targets Rpo/RPS

Intrinsic

Economics

Key Fiscal incentives

Commercial Viability

Technical Viability

Structural

constraints /

Opportunities

Wind regime / land

availability

Grid

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2

4

1a

2a

3a

2b

3b

4a

4b

3c

Key driversKey drivers

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Power demand

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EuropeEurope USAUSA IndiaIndia

Early concern & commitmentUnder global pressure,

Firm plan expected in 2010

Increasing pressure,

Voluntary measures (NAPCC)

High concern on fuel mix

Moderate on power cost

Moderate concern on capacity

addition & fuel mix

Critical Concern on fuel mix,

cost & capacity augmentation

High targetsTargets in selected

states only

RPO mandate for sate level

utilities

Feed-in tariffs Tax Benefit and CertificatesAttractive basket of incentives

and revenue options

High Capex & Opex, Moderate

CoF, Economy under Recovery

High Capex & Opex, Moderate

CoF, Economy under Recovery

Low Capex & Opex, High CoF,

Growing Economy

Easy access to matured

technology and expertise

Easy access to matured

technology and expertise

Access to matured technology

and expertise a lower cost

Saturation of potentialHigh potential ,

largely unexplored

High potential ,

largely unexplored

Moderate issues, stable &

modernized infrastructure

Issues in remote regions but

strong investment in networks

Infrastructure is constraint to

harness full potential

Moderate growth Moderate growthStrong GDP growth & extensive

power demand-supply gapGDP growth vs. efficiency

measures

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Most favorable Favorable Improving

Suzlon Energy Ltd.Key Drivers create Sectoral/Project Viability which

in turn influences Response viability such as…..

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1. Increasing awareness & support to combat Global warming and Climate Change etc

2. Global initiatives eg.COP, Rio+20 drive Renewable Energy investments

3. Maturing technology enable Cost & Performance optimization; Close to achieving grid parity

4. Renewable Energy incentives e.g. RECs, CER, GBI facilitate project feasibility

5. Massive potential in harnessing offshore wind energy

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Suzlon Energy Ltd.

Response effectiveness depends upon

environmental footprint

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Generic idea regarding environmental footprint…

Suzlon Energy Ltd.

Design & Mfg. of WTGs

Environmental footprint will depend upon…

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Wind Resources Mapping

Land and Site Identification

Site Infrastructure Development

Installation & Commissioning

Power Evacuation

Life Cycle Asset Management

Value Added Services (CSR, Environmental and Stakeholder Managements; )

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Suzlon Energy Ltd.Government of India – Responsible

Approach to Climate Change Mitigation• Government of India released the National Action Plan on Climate Change (NAPCC)

outlining existing and future policies and programs addressing climate mitigation

and adaptation.

• The Plan identifies eight core “national missions” running through 2017 – identifies

India’s development objectives while yielding co-benefits for addressing climate

change.

• The Plan’s broad goals are consistent with the three pillars of sustainable

development – economic; social; and environmental – which all need to be

integrated for the provision of adequate energy supplies.

• Specification of RPO target in the Act/RE Law binding on States - State regulations

for Renewable Purchase Specification Targets & Renewable Energy Certificates

(RECs).

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Suzlon Energy Ltd.Suzlon’s Leadership in India

Wind Farms

Mfg. Facilities

Marketing

NetworkAsia’s largest wind

park at Kutch,

Gujarat

Over 860 MW &

expanding…

Asia’s largest wind

park at Kutch,

Gujarat

Over 860 MW &

expanding…

• Market leader for 13 years

• More than 6 GW of installed

capacity across 40+ wind

farms in 8 states

• Developing mega sized wind

parks including Asia’s largest

one at Kutch, Gujarat with

planned capacity of 1500MW

• Over 1600 customers in India

• 2000+ technical manpower

• World class integrated WTG

manufacturing facilities with

annual capacity of 3.5 GW

for supplies to local and

global markets

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Suzlon Energy Ltd.

Wind farms

Suzlon Group in Numbers

SuzlonSuzlon

Products

600KW to 6MW

Products

600KW to 6MW Employees

13,000+

Employees

13,000+

Global presence

32 countries

Global presence

32 countries

Installed capacity

18+ GW

Installed capacity

18+ GW

CO2 reduction 30+ Mn T

YoY*

CO2 reduction 30+ Mn T

YoY*

Turnover

$3.6 Bn

Turnover

$3.6 Bn

Customers

1,800+

Customers

1,800+

Order-book

$7.5 Bn

Order-book

$7.5 Bn

* As on end 2009

Strong technology focus, manufacturing in LCC and presence in high

growth markets make Suzlon a leading global player

Suzlon Energy Ltd.

Gujarat : 1231 MW• Wind parks at Kutch (860+

MW - Asia’s largest) and

Saurashtra (400+ MW)

• Manufacturing plants

• Blade Testing Center

Maharashtra : 1552 MW• Wind parks at Dhule (760+

MW), Sangli (270 MW),

Satara (206 MW)

• Manufacturing plants

• Engineering center

• Group Global HQ

Karnataka : 661 MW• Wind parks at Kappatguda

(197 MW), Harpanhalli,

Chitradurga & Hassan

• Manufacturing plant

Kerala : 21 MW• Wind park at Agali

Tamil Nadu : 1687 MW• Wind parks at Sankaneri (700+MW),

Coimbatore (530MW) and

Devarkulam (419MW)

• Manufacturing plants

Andhra Pradesh: 8.5 MW• Wind farm at Tirupati

• Upcoming wind park at Anantpur

Eastern Region: • Regional HO at Kolkata

• 2 Marketing offices

Northern Region: • Regional HO at Delhi

• 3 Marketing offices

Rajasthan : 1029 MW• Wind parks at Jaisalmer

(825+MW) &

Jodhpur (200+ MW)

Madhya Pradesh: 124 MW• Wind farm at Dewas, Ratlam

and Mahuria

SUZLON’s Market Leadership

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Suzlon Energy Ltd.

Germany

Italy

France

UK

Belgium

Canada

China

Turkey

India

Brazil

Nicaragua

Japan

N. America

USA and

Canada3,181

Portugal and Spain

Europe installations

Germany 2,113

France 1,273

UK 754

Others 1,509

Total 5,649

Asia

China 1,163

Japan 118

India 6,879

Sri Lanka 10

Total 8,170

Australia

Total 913

S. America

Brazil 388

Nicaragua 63

Total 451

(Figures in MW)

Suzlon Group installations

Customized solutions as per market requirements

Around 18,000 MW in 30 countries & 2,100 technicians working worldwide*1: As on December 2011; includes all installed and SCADA connected

systems

Suzlon Energy Ltd.Environmental Impacts due to the Changes in Land use

• Infrastructure development & construction

� Tree felling (replaced at best by lawns)

� Water and energy consumption

� Cementing – reduction in water percolation

� Short term labor requirements

• Manufacturing, transport, packaging..

� Waste disposal, land filling / incineration

� Emissions and effluents

� In migration – load on local resources

� Consumerism and neglect of local produce / resources

14Threat to Local Environment

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Suzlon Energy Ltd.Suzlon’s Efforts

• Taking CSR seriously – as a responsibility and sustainable business strategy

� Not just spending – but making money responsibly

� Not just looking good /doing good but being good

� Relating to farmers as partners in success – win – win

� Gender justice - promoting women farmers

� Conjunction land use – a major initiative:

– Sharing common property resources / land water

– Investing in conservation and biodiversity (Soil & Water Conservation, tree

plantation, indigenous seed banks)

– Grazing land development;

– Collective farming (khadins) in desert and arid zones along with participatory NRM;

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Suzlon Energy Ltd.Suzlon’s Efforts

• Supportive mechanisms in partnership with

Govt and NGOs

� Strengthening women farmers - Self Help Groups, Micro-Credit

� Evolving a cadre of 'jankars' ('wise women‘) to facilitate small

holder's innovation and subsistence

� Promotion Integrated Agro Based Livelihoods Program (IABLP)

approach (farming system approach); emphasizing mutual

dependency of degraded land and livestock;

� Bio-mass recycling for soil improvements

16Empowering & enabling Smallholders

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Suzlon Energy Ltd.Suzlon’s Efforts

• Encouraging Innovation

� Village awards to reward collective efforts

� Multimedia documentation of outcomes for extension;

� Technology transfer;

� Cross subsidizing innovation through 'in kind ' support of

machinery, factory scrap, technical trouble shooting and market

link;

� Promotion of 'green' , organic, eco friendly food among growing

middle class that can afford and appreciate nutritive value;

� Agriculture in public schools to promote farming

17It makes business sense …

Suzlon Energy Ltd.What is in it for Corporate?

• License to operate

• Risk reduction

• Reduced generation losses / down time

• Customer Satisfaction and choice

• Employee’s choice

• Brand image – not just green washing

• Investment in tomorrow’s business

• Community as business partners -

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18Sustainable Business for sustainable Economy

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Suzlon Energy Ltd.

Lessons and points to deliberate• Demanding “responsible business”

• Engaging businesses in sustainable development

• UN / Govts and research institutions to explore win-

wins

• Evolving business perspective from within - it is

possible

• Empowering civil society to demand Accountability and

transparency

19If we don’t co-opt businesses they will co-opt us

Suzlon Energy Ltd.Lessons and points to deliberate

• Demanding “responsible business”

• Engaging businesses in sustainable development

• UN / Govts and research institutions to explore win-

wins

• Evolving business perspective from within - it is

possible

• Empowering civil society to demand Accountability and

transparency

20If we don’t co-opt businesses they will co-opt us

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Suzlon Energy Ltd.Summarizing SUZLON’s Approach...

India is a large developing country with a nearly 700 million rural population

directly depending on climate sensitive sectors ( like agriculture, forests and

fisheries) and natural resources (such as water, biodiversity, mangroves, coastal

zones, grasslands) for their subsistence and livelihoods. Climate change is likely

to impact all the natural ecosystems as well as socio-economic systems as per the

National Communications Report of India to the UNFCCC. In fact, developing

countries like India are facing the dual burden of climate change and

globalization.

SUZLON’s approach to addressing the challenges of Climate Change is based upon

this understanding of Indian context – i.e. an effective response needs to be

derived from an integrated approach to adaptation and mitigation.

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Suzlon Energy Ltd.

Thank You