RENEWABLE ENERGY

SECTOR

CONTENTS
Renewable Energy : Indian scenario
Renewable Energy: Tamil Nadu Scenario
Investment Opportunities
Government Support

Renewable Energy Global Scenario

Renewable energy contributes 1/5th of the global power production. It has the potential to satisfy
100% of the growing global energy demands
Renewable energy share (including-hydro) of global
electricity production is 19%

Renewable energy has had a healthy growth owing to

increasing focus through policy shifts

Global Renewable energy generation by origin

Number of states/province/country

19.0%
Fossil Fuels
Nuclear Power

2.6%
78.4%

Renewable energy

Bio-fuel obligations
Heat Obligations/mandates
Tendering Policy
RPS / quota policies
Feed-in
Countries with Policy targets

2013

India ranks #6 in the global RE

capacity
with an installed
capacity
of
27GW
(without
including hydro)

Renewable power
capacity (GW)

India
Italy
Spain
Germany
US
China

27
31
32
78
93
118

100

150

200

Global Renewable Power Generation

1560
Gigawatt

International Energy Outlook 2011

forecasts
energy
consumption
growth by 53% between 2008 and
2035. It is expected to reach 770
quadrillion Btu

50

Wind Power

Concentrating Solar
Thermal Power
Solar PV

811

Geothermal
2003

2013

Bio Mass

Renewable Energy - Indian Scenario

Renewable energy sources currently contribute 30% of the installed capacity and is
expected to increase to 34% by 2017
Fuel wise generation mix, 2013
Nuclear.
2%

Installed Capacity Mix in India (GW), 2014

4.8

Hydro.
18%
21.1

Renewable
. 12%
Thermal.
68%

72.5
176.1

3.8

40.8

4.0
0.1

Thermal
Wind Power

Nuclear
Small Hydro Power

2.6

Hydro
Biomass Power

For the period 2012-17, the target capacity addition for power sector is 118 GW out
of which the target addition for renewable energy is 30,000 MW. This implies that
25% of the planned capacity addition is in the renewable segment

Fuel wise generation mix by 2017

projection
Renewable
. 13%

Nuclear.
3%
Hydro.
21%

Thermal.
63%

Section 2 Indian Scenario

Renewable energy investment stemmed from the landmark Electricity Act 2003 and
the subsequent policies & instruments.
Mandated State Electricity Regulatory Commissions (SERCs) to
Electricity promote power generation from renewable sources through proper
grid connectivity and open access
Act 2003
Fix certain minimum percentages for purchase of renewable power

National
Electricity
Policy 2005

Further provided for progressive increase in generation of electricity

from renewable sources and supported purchases by distribution
companies through competitive bidding process

Provided for fixation by SERCs of a minimum percentage of

Renewable Purchase Obligation (RPO) from RE sources taking into
Tariff
account availability of such resources in the region and its impact on
Policy 2006 retail tariffs and procurement by distribution companies at
preferential tariffs determined by the SERCs

National Action
Plan on Climate
Change 2008

Outlined existing and future policies and programs addressing

climate mitigation and adaptation
NAPCC has advised that starting 2009-10, RPOs be set at 5% of total
grids purchase, and be increased by 1% each year for 10 years.

Policy Instrument

Positives for Private sector investment

Feed in Tariffs/ Preferential

Tariffs

Financial as well as economic costs and

benefits of RE are not yet factored in FIT.

Accelerated Depreciation

Result of which, there is commercial

viability in this business

Generation Based Incentives

Avenues for additional guaranteed

revenues for project developers

Renewable Purchase
Obligation

Readymade market for renewable power

sources

Renewable Energy
Certificates (RECs)

Helps renewable power developers to

trade REC's and realise the value of power

Carbon Trading

Additional revenue stream for developers

to increase their financial returns

Tax Incentives

Improved Return on Equity for developer

Renewable Energy - Tamil Nadu

Tamil Nadu is a pioneer in harnessing its renewable energy potential in India as
compared to its peers.
#1 State in renewable energy capacity

Renewable Energy Capacity (MW)

among all the Indian States

CAGR 7%

6636

7504

7999

8219

#10 global installed capacity of wind

power generation units and also #1 in
India.
#2 installed capacity of cogeneration
power plants in the country
39.6% of the total power capacity from
renewable energy sources

2011

2012

2013

2014

Tamil Nadus Competitive Advantage

Wind power in Tamil Nadu Advantageous geographic position and progressive policy
initiatives
Wind power passes in Tamil Nadu

S. No.

Coimbatore

Annual Average Wind Speeds

Palghat Pass, Coimbatore, Erode

18-22

Shencottah Pass, Tirunelveli,

Tuticorin

18-22

Aralvoimozhi Pass, Kanyakumari

19-25

Kambam Pass , Theni District

19-25

Palghat Pass, Coimbatore, Erode

18-22

Progressive policy initiatives

Dindigul
Theni

The regulations allow for sale to third parties through open access.

Wheeling charges for transmission of power using the network is at 40%

of the conventional power.

The State has allocated USD 377 Million and USD 198 Million in two
phases for provision of transmission capacity for wind and solar sources

Ramnathapuram
Tirunelveli
Thoothukudi
Kanyakumari

Areas

Solar Power in Tamil Nadu Geographic advantage of tropical region and initiatives
to become national leader in solar power by achieving 3000MW
Geographical Advantage

India has solar incidence in the range of 4

7 kWH/sq.m./day, while Tamil Nadu
enjoys solar incidence of 5.5 - 6
kWh/sq.m/day.
This sector which has hitherto been
untapped with a cumulative capacity of
only 119.06 MW.

Tamil Nadu is pioneer in announcing net

metering policy

Hence, Tamil Nadu is a potential

destination for solar investment

Renewable energy sector Tamil Nadu Global Investors Meet 2015

Key features of solar energy policy 2012

Investment Outlay
The State has an outlay of INR 55,000 crore (USD 9.16 Billion) for solar energy
sector alone. This is more than 10% of the total allocation for Power sector

Solar rooftop programme

Solar rooftop has been made mandatory for all new State Government
buildings. PV system will also be installed in old buildings in phased
manner

Tax Concessions
Refund of 50% of the VAT component on capital goods (if these are
manufactures in Tamil Nadu) exclusively for captive power generation
Electricity tax exemption for sale to utility & captive sales for 5 years

Other features
Domestic roof top installations with support from the State Government
Net metering policy to encourage more number of installations
Compulsory roof tops in all government buildings
Solar water heating systems in public building and industrial buildings
A total capacity of 1500 MW to promote development of solar capacity (of
varied capacities ranging from 1MW to over 10 M.

Biomass in Tamil Nadu USD 200 million opportunity of untapped potential

Capacity in MW

Biomass Capacity/Potential in TN
Features of the Biomass power policy under the TNERC
regulations.

272
500
228
Installed Capacity

Untapped potential

Any company/corporate body/association/body of

individuals can set up a biomass power generation unit

The applicable tariff for the current year is under

revision. However, the tariff for the last year is Rs 4.85
per MW.

Total

Available potential is 272MW.

As per TANGEDCO, the approximate cost of setting up a biomass

facility is INR 4.45 crore per MW (USD 0.74 Million). Therefore an
investment potential of USD 200 Million.

The scheme allows for 3rd party sale and open access.
Wheeling charges at 50% of conventional power

Cogen in Tamil Nadu Raw material availability and investment policies

Raw material availability

TNERC policies promoting investment

The raw material for power generation using

cogeneration plants is bagasse which is generated
form sugar factories.

Any company/corporate body/association/body of

individuals can set up a biomass power generation
unit

Tamil Nadu is the third largest sugar producer in

India with 43 factories and it accounts for about
10% of the total production.

The applicable tariff for the current year is under

revision. However, the tariff for the last year is Rs.
3.76 per kWHr.

There are 29 plants in the State that together

account for the capacity of 659 MW of cogen
power capacity.

The scheme allows for 3rd party sale and open

access.

Wheeling charges at 7.5% of energy wheeled for Low

tension services and 5% for others.

This capacity is spread across the State in the

delta region, Districts of Erode, Coimbatore,
Tirunelveli etc.

Opportunities for Investment in Renewable Energy in Tamil Nadu

Tamil Nadu is conducive for investment across the spectrum in the renewable energy sector

Development of windsolar hybrid installations

and biomass projects

Offshore wind projects

development

Development of solar PV
manufacturing capabilities

Development of large
scale solar and wind parks

Tidel projects first at pilot

scale, and then at
commercial scale

Government Support
Tamil Nadu been the most forward looking State in terms of sustainable power development
This has been achieved largely on account of the States focused policy making and drive to capitalize on the opportunity.

Energy Department
Tamil Nadu
Electricity Board
(TNEB) Limited

Tamil Nadu
Generation and
distribution
Corporation
Limited
(TANGEDCO)

Tamil Nadu
Transmission
Corporation
Limited
(TANTRANSCO)

Tamil Nadu Energy

Development
Agency (TEDA)
- Set up in 1984 to
migrate the State
from fossil to
renewable energy

Tamil Nadu Power Finance and Infrastructure Development Corporation Limited (TNPFIDC)
Chief Electrical Inspector to Government (CEIG)

The current programmes as part of the policy initiative..

CMs Solar Powered Green House Scheme 0.3 Million houses will be constructed with solar powered lighting systems
from 2011-12 to 2015-16 in rural areas

CMs Solar Rooftop Capital Incentive Scheme A capital subsidy of $300 (INR 20, 000) per kW of installation over
and above the GoIs 30% subsidy under the MNRE scheme

Bio Energy Bio energy program's objective is to optimally utilize the vast biomass resource for power and
cogeneration through biomass gasifier & biomass plants

Solar Energy The States ambitious solar energy policy 2012 is aiming to add 3000MW of solar in Tamil Nadu by 2015
which is ~16% of the total installed capacity in Tamil Nadu

Wind Energy Wind is a success story of Tamil Nadu. The State has identified Kambam pass in Theni District for wind
energy development. Currently 3 passes are in operation.

Wind Solar Hybrid System A wind solar hybrid is a way to offset the seasonality of these power sources. Also the cost of
the hybrid is 40-50% cheaper than pure play solar systems.

Additional Chief Secretary - Government of Tamil Nadu

Industries Department
Phone: 91-44-25671383 Fax: 91-44-25670822
Email: indsec@tn.gov.in, jsindgim@tn.gov.in
Nodal agency
Tamil Nadu Industrial Guidance and Export Promotion Bureau
19-A, Rukmini Lakshmipathy Road,
Egmore, Chennai-600 008
Phone: 91-44-2855 3118
Email: directorguidance@gmail.com

Visit us at www.tamilnadugim.com