Power & Renewables : context, promise and policy

1. Power & Renewables: context, promise and policy AIBC 2010 Session on Power and Renewables Energy, Resources and Associated Infrastructure Conference 11 June, 2010 Ligia Noronha Director Resources, Regulation & Global Security TERI, India

2. Outline The Context The potential for renewable power Policy Innovations to address energy challenges and create markets for renewable power RE business and research opportunities

3. I The Context

4. Key Challenges • Low access: Over 500 million without electricity and 700 million dependent on traditional fuels; a per capita annual consumption of 650 units • High electricity shortages: estimated at nearly 10% in energy terms and over 13 % in peak demand • Humungous projected energy resource needs to deliver 8% growth • High dependence on fossil fuels and imports: 70% of its oil is imported; 11% of its coal and 17% of its natural gas • Carbon concerns: an additional constraint

5. India’s Energy Resource Needs2002-2031/32 (for 8% growth p.a) IEP, 2006 • Projections to 2031 • Coal – double (300 ) • Gas – 4 times (29 ) • Oil –2.3 times(148) • Hydro – 3.6 times (13) • Nuclear - 5.8 times (24) • Range of Imports in 2031 • Fossil fuel imports: 387-1010 Mtoe; (Import dependency: 29-59%) • Coal imports : 72-462 mtoe; (Import dependency:11-45%) • Oil import: 315-451 MT; • (Import dependency: 90-93%) • Natural Gas import: 0-97 Mtoe • (Import dependency: 0-49%) ( figures In brackets, mtoe in 2002)

6. Electricity fuel mix 29% 10% 1,141 MW 2,944 MW 23% 10,897 MW 78% 90% 71% 39,222 MW 9,755 MW 7,231 MW Other RE Other RE Wind Wind Total installed capacity as on 31.3.2009 is 148 GW Hydro

7. Renewable Power in India, 2010 Total : 404.56 MW/MWeq Total: 16817.29 MW Source MNRE as on 31.3.2010

8. Key policy directions and challenges All available energy sources to be used; special focus on renewable energy, energy efficiency and DSM, and nuclear power The power sector is seen as best placed to make the transition to renewable energy technologies, given that 80% of investments to 2031 are yet to come Markets have been liberalized; prices to be market determined; efficiency across the value change, subsidies to be targeted Key challenges: time to make the transitions and costs

9. II The Potential for Renewable Energy

10. Electricity Capacity in best case scenario (2031/32) Source: Integrated Energy Policy, Planning Commission 2006

11. The Potential: Solar radiation over India Most parts receive 4-7 kWh/sqm/d Incidence: 5000 trillion kWh/year energy Both solar thermal and solar PV can be harnessed Key Constraints: Land, storage, high cost

12. Wind resources in India • Potential : 45,000 MW • The success story so far • 70% of current grid connected RE (non hydro) is from wind (>10GW) • Indian companies are already global • Has achieved grid parity in costs

13. Bio-energy • Large biomass resource base • > 600 million tonnes • Technologies of interest • Liquid fuels (ethanol, bio-diesel) • Gaseous fuels (producer gas, bio gas) • Electricity (small-scale using gasification, large-scale using steam route) • Social benefits • Employment in rural areas • Modern energy services to rural population • Potential to “green” waste lands

14. III Policy Innovations

15. Securing conventional energy resources • Overseas investments: Balancing interests and principles • Enlarging the engagement with the near and expanded neighbourhood:Increased energy ties: West Asia, Central Asia, Australia , SAsia • Sourcing oil and coal from Africa: building on long term relations • Accessing global civil nuclear markets: Collaboration with the USA and emerging ties post the NSG waiver • Managing the hyphenation with China: Risks and opportunities

16. Renewable energy sector development in India (the policy story) 1970s • R&D programs initiated • Focus on developing RE technologies and products • Demonstration projects 1980s • Fiscal & financial incentives introduced (subsidy, tax incentives, etc) • Increased role of Public Sector Undertakings • Infrastructure development 1990s 2000 Onwards • More emphasis on fiscal incentives • Increased Private Sector Participation • EA 2003, NEP 2005, NTP 2006 • Quota/Obligation system introduced • Preferential tariffs for RE • Integrated Energy Policy 2006 • National Biofuels Policy • NAPCC • NSM Source: S Garud

17. Trends in RET Systems innovations in India Smart Mini Grid Solar Mini Grid Wind + GRID Solar WIND HYDRO Mini Hydro Biomass Village systems Integration Stand-alone Solar Systems 2008 1990 1980

18. National Solar Mission To sharply upscale grid connected solar power: • 3 phases: 1000 MW -2013; 10000 MW-2017; 20000 MW-2022 • To create favorable conditions for solar manufacturing capability • To support off grid applications – 1000 MW by 2017; 2000 MW-2022 • To support this • : Solar PO, REC, dedicated buyer-NVVN, fiscal incentives, R & D

19. IV RE business and research opportunities & partnerships • Well established legal system and financial markets • Large technically qualified workforce • Enabling policy regime • Many market opportunities • Sustainable Buildings • Distributed Generation • SMEs • Potential Indian Partners (see www.mnre.gov.in)

20. Conclusion • India has a rapidly growing power sector with a vibrant renewable energy market • Australia already exports coking and thermal coal; LNG; will only increase over time. • RE beckons • Estimated total investments in renewable energy projects estimated to be > US$ 10 billion in next 3-5 years. • Many BOP opportunities available through decentralized systems • Solar power costs are expected to fall to grid parity by 2022; and to coal thermal power parity by 2030 through aggressive supportive policies • Pro investor and R & D friendly policy regimes in place

21. Thank you