MARKETING MANAGEMENT PROJECT

ASSESSMENT OF MARKET POTENTIAL FOR WIND ENERGY IN INDIA

BY BHAVIK MODY (M-09-06) MANISH DHELIA (M-09-15) PRAVEEN KUMAR RAI (M-09-23) RADHIKA REWARI (M-09-24)

RAJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY, RAE BARELI

ABSTRACT
Energy security and sustainable development are high in the global agenda due to the impact of volatile energy prices, high demand for energy security, and concerns over environmental sustainability and the global climate change. New and renewable energy technologies are considered to be one of the viable options to meet the challenge of achieving sustainable development while conserving natural resources that have been depleted due to the rapid growth in population, urbanization, and fossil fuel consumption. Wind energy not only offers both a power source that completely avoids the emission of carbon dioxide, the main GHG, but also produces none of the other pollutants associated with either fossil fuel or nuclear generation. The Indian renewable energy sector has shown impressive growth in the past few years and investments into the sector have increased significantly. Looking into the past years records and also the policies and actions of Government of India to encourage the implementation of renewable energy resources for power generation, the future of Indian energy sector seems bright. In this report here we are concentrating on the current energy scenario of India with respect to wind energy. We shall be studying the current status of wind energy generation in India and also look into the future forecasts. Moreover, we shall be analyzing the current market conditions in India for any new player who wishes to enter the wind energy sector in India. For this purpose we shall be getting and insight in the technical, financial, environmental and political conditions of wind energy and also identifying the potential threats and opportunities in Indian wind energy market. We shall be referring the policies and regulations of Government of India and thereby identifying a possible market entry strategy.

INDEX
1. Introduction 1.1. Wind Energy 1.2. Wind Formation and Distribution 1.3. Wind Farms and Wind Turbines 1.4. Wind farm and Turbine Placement 1.5. Micro-generation 1.6. Advantages of Wind Energy 1.7. Disadvantages of Wind Energy 2. Global Wind Energy Scenario 2.1. Forecast for Global Wind Energy Scenario 3. Wind Energy Prospects in India 3.1. Political Factors 3.2. Economic Factors 3.3. Social Factors 3.4. Technological Factors 3.5. State Policies 3.6. Other Factors 4. Market Player Analysis 4.1. Suzlon Energy Limited 4.2. Vestas Wind Technology India Private Limited 4.3. Enercon India Limited 5. Conclusion I. II. III. IV. V. VI. Figure 1: Schematic Diagram of a Wind Mill Figure 2: Wind Map of India Exhibit A: WEG Installation Details World - Country Wise Exhibit B: WEG Installation Details India State Wise Exhibit C: Total Generation From Wind Power Projects (MU) Bibliography

INTRODUCTION This project of assessing the wind energy potential in India is being executed with a reference view of a new firm targeting the market of wind energy in India. Therefore all the analysis and assessment done will be targeted to answer 2 basic questions: 1. Is it feasible and wise to enter the wind energy market in India? 2. If yes, then which state of India or which location will the firm like to target as their entry point? Before beginning our assessment of wind energy potential in India, it will be helpful to have a brief idea about wind energy and its generation. This section provides an overview to the generation of wind energy and its advantages and disadvantages. WIND ENERGY History suggests that use of wind energy is a very ancient and popular application. Humans have been using wind power for at least 5,500 years now with initial use being sails to propel the ships. Architects in olden times designed wind driven ventilation buildings. Windmills have been used for irrigation pumping and for milling grain since 7th century AD. Wind power came into picture in late 19 th century and small capacity turbines (20-30 kW) were constructed for providing power to isolated farms. Now they have evolved into huge megawatt turbines. Wind power is the conversion of wind energy into a useful form of energy, such as electricity, using wind turbines. Large scale wind farms are connected to electric power transmission network, and the power generated is sold to commercial power suppliers and distributors. There is also another commercial application of wind mills that is very popular. It is the installation and use of wind mills by industries to satisfy their power demands. Wind energy is more attractive than the fossil fuel power generation because it is plentiful, renewable, widely distributed, clean and produces no greenhouse gases. Wind power is non-dispatchable, meaning that for economic operation, all output must be taken when it is available. The variability in wind flow and directions also cause problems for continuous power generation. WIND FORMATION AND DISTRIBUTION The driving force behind all the technologies we discussed above is the natural gift of wind. It is the wind speed and direction that helps in blade rotation. Also the intermittence of wind also defines the continuity in power generation. The main reason behind the wind flow is sun. The earth is unevenly heated by the sun, such that the poles receive fewer sunrays directly as compared to the equator. Land heats up quicker than seawater and this differential heating result in creation of wind currents. The wind currents reach up to 160 kmph at high altitudes. The rotation of the earth changes the direction of the flow of air. These currents are harnessed for power generation using wind turbines. The estimated wind power that is potentially viable for generation is about 72 TW, which is much higher than the total global consumption of 15 TW in the year 2005.

But the inconsistency in wind flow and variable current speed inhibits the fact of obtaining maximum power generation. Although technologies have been developed to obtain the maximum output from the available wind source. WIND FARMS AND WIND TURBINES In a wind farm, individual turbines are interconnected with a medium voltage (usually 34.5 kV) power collection system and communications network. At a substation, this medium-voltage electrical current is increased in voltage with a transformer for connection to the high voltage electric power transmission system. The surplus power produced by domestic microgenerators can, in some jurisdictions, be fed back into the network and sold back to the utility company, producing a retail credit for the consumer to offset their energy costs. The basic process of wind power generation is as follows (Refer Figure 1 for understanding): The wind turns the blades of a windmill-like machine. The rotating blades turn the shaft to which they are attached. The turning shaft typically can either power a pump or turn a generator, which produces electricity. Most wind machines have blades attached to a horizontal shaft. This shaft transmits power through a series of gears, which provide power to a water pump or electric generator. These are called horizontal axis wind turbines. There are also vertical axis machines, such as the Darrieus wind machine, which has two, three, or four long curved blades on a vertical shaft and resembles a giant eggbeater in shape. The amount of energy produced by a wind machine depends upon the wind speed and the size of the blades in the machine. In general, when the wind speed doubles, the power produced increases eight times. Larger blades capture more wind. As the diameter of the circle formed by the blades doubles, the power increases four times.

Main components of a wind electric generator are: 1. Tower 2. Nacelle 3. Rotor 4. Gearbox 5. Generator 6. Braking System 7. Yaw System 8. Controllers 9. Sensors

Induction generators are used in wind power projects and they include substantial capacitor banks for power factor correction. Doubly-fed machines - wind turbines with solid state converters between the turbine generator and collector system - are generally more desirable for grid interconnection because of inconsistent power generation across different turbines. Since wind speed is not constant, a wind farm's annual energy production is never as much as the sum of the generator nameplate ratings multiplied by the total hours in a year. The ratio of actual productivity in a year to this theoretical maximum is called the capacity factor. Typical capacity factors are 2040%, with values at the upper end of the range in particularly favourable sites. Wind energy "penetration" refers to the fraction of energy produced by wind compared with the total available generation capacity. There is no generally accepted "maximum" level of wind penetration. The limit for a particular grid will depend on the existing generating plants, pricing mechanisms, capacity for storage or demand management, and other factors. An interconnected electricity grid will already include reserve generating and transmission capacity to allow for equipment failures; this reserve capacity can also serve to regulate for the varying power generation by wind plants. WIND FARM AND TURBINE PLACEMENT Placement of turbine and location of the wind farm play a pivotal role in power generation. Good selection of a wind turbine site is critical to economic development of wind power. Aside from the availability of wind itself, other factors include the availability of transmission lines, value of energy to be produced, cost of land acquisition, land use considerations, and environmental impact of construction and operations. Offshore locations may offset their higher construction cost with higher annual load factors, thereby reducing cost of energy produced. Wind farm designers use specialized wind energy software applications to evaluate the impact of these issues on a given wind farm design. An area where a number of wind electric generators are installed is known as a wind farm. The essential requirements for establishment of a wind farm for optimal exploitation of the wind are 1. High wind resource at particular site 2. Adequate land availability 3. Suitable terrain and good soil condition 4. Proper approach to site 5. Suitable power grid nearby 6. Techno-economic selection of WEGs 7. Scientifically prepared layout MICRO-GENERATION Small-scale wind power is the name given to wind generation systems with the capacity to produce up to 50 kW of electrical power. Isolated communities, that may otherwise rely on diesel generators may use wind turbines to displace diesel fuel consumption. Individuals may purchase these systems to reduce or eliminate their dependence on grid electricity for economic or other reasons, or to reduce their carbon footprint. Wind turbines have been used for household electricity generation in conjunction with battery storage over many decades in remote areas.

ADVANTAGES OF WIND ENERGY The main advantages of power generation from wind energy are 1. The capital cost is comparable with conventional power plants. For a wind farm, the capital cost ranges between 4.5 crores to 6.85 crores per MW, depending up on the type of turbine, technology, size and location. 2. Construction time is less. 3. Fuel cost is zero. 4. O & M cost is very low. 5. Capacity addition can be in modular form. 6. There is no adverse effect on global environment. The whole system is pollution free and environment friendly. The pollution saving from a WEG having an average output of 4,00,0.00 kWh per year has been estimated as: Sulphur - dioxide (SO2): 2 to 3.2 tonnes Nitrogen - oxide (NO); 1.2 to 2.4 tonnes Carbon - dioxide (CO2): 300 to 500 tonnes Particulates: 150 to 280 kg. Comparison between Fossil Fuels and Wind Availability Usable as it exists

Limitation on availability

Inexhaustible resource

Transportation

Used where it is available

Use in production

Zero emission

Geo-political Implications

Reduces our reliance on oil, safeguarding national security

Have to be procured and made usable through laborious and environmentally damaging processes Limited in reserves, expected to get completely exhausted in the coming 60 years Have to be transported from the site for further processing exposing environment to danger Used in producing electricity releasing green house gasses Over-reliance on oil as a resource has undermined our energy security. E.g. OPEC crises of 1973, Gulf War of 1991 and Iraq War of 2003 There is no adverse effect

on global environment. The whole system is pollution free and environment friendly.

DISADVANTAGES OF WIND POWER Wind machines must be located where strong, dependable winds are available most of the time. 2. Because winds do not blow strongly enough to produce power all the time, energy from wind machines is considered "intermittent," that is, it comes and goes. Therefore, electricity from wind machines must have a back-up supply from another source. 3. As wind power is "intermittent," utility companies can use it for only part of their total energy needs. 4. Wind towers and turbine blades are subject to damage from high winds and lighting. Rotating parts, which are located high off the ground can be difficult and expensive to repair. 5. Electricity produced by wind power sometimes fluctuates in voltage and power factor, which can cause difficulties in linking its power to a utility system. 6. The noise made by rotating wind machine blades can be annoying to nearby neighbors. 7. People have complained about aesthetics of and avian mortality from wind machines. GLOBAL WIND ENERGY SCENARIO After getting an insight of the technical aspects of wind energy generation, it is time to review the current wind energy scenario of the world. The global scenario will provide a base to assess the Indian potential. The following points summarize the current global scenario pertaining to wind energy. Exhibit A provides an overview to all the details given below. Total nameplate capacity of wind turbines operating around the world is of 121,188 MWp out of which 55% is generated in Europe. The share of top 5 nations in terms of new installations was 73% in 2008. The top 5 major wind energy producers are USA, Germany, Spain, China and India.

WEG Installation Details World - Country Wise (in MW)

140000 120000 100000 80000 60000 40000 20000 0 Germany Spain India China US WORLD 2006 2007 2008 2009

The wind power contribution to the total power generation of the world increased to 1.5% (260TWh) in 2008. The USA and China contributed a lot in wind energy installations in the year 2008. United States taking over the global number one position from Germany and China getting ahead of India for the first time, taking the lead in Asia.

FORECAST FOR GLOBAL WIND ENERGY SCENARIO World Wind Energy Association has predicted the installation capacity to reach 160 GW by 2010. The current annual production capacity of domestic wind turbines is about 2500 MW, which is expected to grow by 10 000 MW until 2010. 10% to 20% market growth rebound is anticipated from 20102012 as longerterm investments and market reforms progress. Investments in wind energy sector are supposed to rise to $277 billion. In 2012, Europe will continue to host the largest wind energy capacity, with the total reaching 102 GW, followed by Asia with 66 GW and North America with 61.3 GW. Asia is predicted to overtake Europe as the biggest annual market, with as much as 12.5 GW of new wind generating capacity installed during the year 2012. North America will see an addition of 42.6 GW in the next five years, reaching 61.3 GW of total capacity in 2012.

10

Asia is predicted to overtake Europe as the biggest annual market, with as much as 12.5 GW of new wind generating capacity installed during the year 2012. China is predicted to be the biggest global market.

WIND ENERGY PROSPECTS IN INDIA India is the fifth largest wind power generating nation in the world even when its installed capacity is far below the existing potential capacity. The Indian renewable energy sector has shown impressive growth in the past few years and investments into the sector have increased significantly. After an overview of global conditions and technical aspects of wind energy and wind farming, it is time to assess the wind energy market potential in India. We shall carefully assess all factors that can affect the market in India. POLITICAL FACTORS The Indian government by 2012 expects renewable energy to contribute 10% of the total power generation capacity and have 4%5% share in the electricity mix. The Integrated Energy Policy Report of the Planning Commission of India has observed that the contribution of modern renewable sources to Indias energy mix by 20312032, excluding large hydro, would be around 5%6%. It may be noted that wind power contributes 70% of the grid-interactive renewable power installed in the country. There are a number of measures that help drive wind energy development, including fiscal incentives such as income tax exemption for 10 yr, 80% accelerated depreciation, sales tax exemption, and excise duty exemption. The government had formed a set of guidelines which were revised depending on the feedback received and from the experience. The new guidelines are address to all the state electricity board (SEBs) and State Nodal Agencies (SNAs) and also financial institutions like IREDA, who carry out appraisal of wind power projects in accordance to the guidelines. The No Objection Certificate (NOC) provided by the SNA or SEB is the first and foremost requirement for an organization to own before it undertakes a wind farming project. A technical committee is appointed by the government to appraise and monitor the project and give time bound temporary clearances. The criteria for providing NOC to any project are as follows: Detailed project report / application providing the data related to capital cost, cost of generation, energy generation, O&M, selection of equipment etc. For more than 1 MW project details about mircogeneration is also to be provided. Site clearance is needed depending on the viability of wind flow and potential generation capacity that is to be estimated.

11

Equipment and machinery used should be properly tested and certified as per the standards incorporating those equipments. Proper analysis and estimation of generation cost and capital cost that will be incurred for the project. It is to be verified that adequate stock of spare parts are present for operations and maintenance of all machinery and equipment for at least 2 years. It should be ensured that the project generates power in accordance with the duly laid down grid parameters. A penalty is levied by SNAs on the firm if the project fails to reach the 0.85 power factor at the metering point of wind farm. A submission of monthly status report to the regulating bodies.

ECONOMIC FACTORS Here we shall concentrate on the cost of wind power generation and pricing of the power. Today, India is facing severe shortage of electricity and it is projected that by 2012, India will have to add approx. another 150,000 MW to its current installed capacity, which is approx. an average increase of 10,000 MW annually. The country is thus likely to fall way behind the required capacity additions. The gap thus created is the lucrative area that can be exploited for wind energy production. The cost incurred in installation of one wind mill is estimated to be Rs. 1 crore. A bank provides about 70% of cost as loan. The 30% can be self managed by putting ones own equity or by partnering with more than one investors. The advantage of this project is 80% of cost is given as accelerated depreciation and thereby provides tax benefit for renewable energy during the first year. In India, turbine prices have always been lower than the global average, thanks to lower labour and production costs. For the purpose of these scenarios, the current costs of 53.5 mil Rs/MW (771,000 /MW) were taken as a starting point, and these are projected to decrease to 50.0 mil Rs/MW by 2010 and then stabilize at that level. Through central- and state-level policy intervention wind energy is produced at any identified windy site in the state. The energy produced is supplied to the State Electricity Board's grid, can be either sold to electricity boards or utilized against captive consumption and third-party sale on payment of wheeling charges. So, on an initial estimation, an individual investing in a wind turbine will garner about Rs 13 lakh by selling energy to the state electricity board in the first year. Wind turbine takes five-six years to break-even, while its lifespan is about 20 years. The annual operation and maintenance cost, including insurance, works out to Rs 40,00050,000. Wind turbine makers provide one-year warranty on the installation.

12

The good news for those interested in investing in wind energy is that wind turbine manufacturers do provide assistance from ideas to installation. Wind turbine makers also take care of spotting a suitable location to install and maintain wind turbines. There is a double bonanza in case of energy trading for wind energy producers. With the government policies and regulations the producer gains substantial amount of revenue from the sales of wind energy. Along with that usage of green technology and pollution free methods makes the producer eligible for earning Carbon Credits under the CDM project. These credits can be used for industry expansion or can be sold in market for money.

SOCIAL FACTORS The wind energy sector mainly supports society by contributing towards the environmental cause. As discussed earlier in the advantages of wind energy we have a lot many benefits that can be reaped from any wind farm installation. There are no other social factors that may affect the wind energy generation projects in India. TECHNOLOGICAL FACTORS The technical aspects related to wind farms; wind mills and energy production have already been covered in the preceding sections. Here we shall analyze the affects of these on wind energy market. Individual wind turbines have been steadily growing in terms of their nameplate capacity the maximum electricity output they achieve when operating at full power. The average capacity of wind turbines installed in India in 2008 was 1MW, up from just 400 kW in 2000. Globally, the largest turbines now available for commercial use are up to 6 MW in capacity. Each turbine has an operational lifetime of 20 years, after which it will need to be replaced. The technological advancements in increasing the nameplate capacity of turbines helps in increase in production. Bigger turbines would replace the obsolete or out of order smaller turbines and therefore more production can be achieved with same number of installations. Capacity factors are also affected by the efficiency of the turbine and its suitability for the particular location. From an estimated average capacity factor in India today of 20.5%, the scenario assumes that improvements in both wind turbine technology and the installation location of wind farms will result in a steady increase. The scenario projects that the average capacity factor in India will increase to 23% by 2011, 25% by 2021 and then 27.5% from 2026. These technological advancements and researches also provide a clear insight into the market of wind energy in India, showing a great scope of development and advancements which are beneficial for all the stakeholders.

13

STATE POLICIES Now we shall look at the policies that the states have applied in order to facilitate wind energy generation projects within the states. These states are Kerala, Rajasthan, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Madhya Pradesh, West Bengal, Gujarat, and Haryana.
Financial and fiscal incentives introduced/declared by the state governments for private sector wind power projects Third Party sale Penalty on kVArh consumption

States/items

Captive use

Wheeling

Banking

Buy-back rate by SEB Rs 3.50/kW h without any escalation for 10 yr as per A.P. Govt. Policy amendment date 09.09.2008 subject to approval of APERC

Other incentives

Andhra Pradesh

Allowed

At par with conventional 4% of energy 5% of energy + Rs. 1.15 / kWh of energy

-----

Allowed

Industry Status Electricity duty exempted, demand cut 30% of wind farm installed capacity

Rs 0.10/kVArh up to 10% and Rs 0.25/kVArh above 10% Rs 0.10/kVArh up to 10% and Rs 0.20/kVArh above 10%

Gujarat

Allowed

not allowed allowed at 2% of energy output

Karnataka

Allowed

for 3rd party sale To be decided by SERC 2% of energy + transmission charges as per ERC

Kerala Madhya Pradesh

Allowed Allowed

---not allowed

Rs 3.50/kW h without any escalation for 20 yr Rs 3.40/kW h without any escalation for 10 yr of commercial operation Rs 3.14/kW h without any escalation for 20 yr Year wise rates Rs/kW h from 1st20th year: 1st year4.03, 2nd year3.86, 3rd yr3.69, 4th year3.52, 5th20th year

Allowed

Allowed

No electricity duty for 5 yr

Rs. 0.40/kVArh

Allowed Allowed

------No electricity duty for 5 yr

------Rs 0.27/kVArh

14

3.36 Power evacuation arrangement, approach road, electricity duty, loan to cooperative societies

Maharashtra

Allowed

2% energy as wheeling + 5% as T&D cost

12 months

Rajasthan

Allowed

Below 132 kV, 50% of normal charges applicable to 33 kV declared by commission + surcharge + losses

6 months

Rs 3.50/kW h first year of commissioning. escalation of 15 paise per year for 13 yr For Jaisalmer, Jodhpur, and Barmer district Rs 3.60 per unit for injection in 33 or 11 kV system and Rs 3.71 per unit for injection in EHV system. For other district Rs 3.78 per unit for injection on 33 or 11 kV system and Rs 3.89 per unit for injection in EHV system

Allowed

Rs 0.25/kVArh

Allowed

Exemption from electricity duty at 50% for 7 yr

Rs 0.05/yr w.e.f. 01/04/2006 with escalation of 5%/yr Rs 0.25/kVArh if the ratio of kVArh drawn to kWh exported is up to 10% and Rs 0.50/kVArh for more than 10%.

Tamil Nadu

Allowed

West Bengal

Allowed

5% of energy 7% of energy + open access charges

5% per annum

Rs 2.90/kW h Note: TNERC has proposed, Rs 3.40 in its discussion paper. However, final order is yet to be issued.

Allowed

---------

-------

Rs 4/kW h

Allowed

---------

---------

15

Moreover, the Maharasthra government has been providing some extra incentives in order to promote the wind farming and wind energy production within the state. These are: For evacuation arrangement of wind energy project, 50% amount will be given as a subsidy through Greens energy fund and 50% amount will be given as a loan without interest to private developers. The loan will be repaid by MSEB/transmission licensees after commissioning and transferring the ownership of evacuation arrangement to MSEB/transmission licensees in 5 equal yearly installments. 100% expenditure for construction of approach roads will be made through Green energy fund. No electricity duty for 5 yr for captive use. 11% share capital will be provided to cooperative sector for setting up of wind power projects as a grant through Green energy fund. OTHER FACTORS There are some other factors that are to be for assessment of market potential. It is important to study the viable locations for wind farm setup in India. As known there are 4 types of wind farm setups: Offshore, Onshore, Near-Shore and Aerial. India has a large potential for Offshore, onshore and near-shore wind farms (Figure 2 can be used for reference). The macro-scale atmospheric flow of wind in tropical India is determined strongly by the strength of the monsoon winds i.e. the South-West monsoon winds and the North-East Monsoon winds. The vast Indian shoreline and also mountainous terrains act as ideal locations for near-shore and onshore wind farm locations respectively. Several shallow parts along the islands of Lakshadweep and Andaman and Nicobar as well as Sundarban Delta can be used for offshore setups. The current trends provide an optimistic view to the wind energy market conditions in India. Looking at the data provided in Exhibit B and Exhibit C we can assess the current scenario of Indian wind energy market. Exhibit B specifies the current maximum capacity that each state has in terms of wind energy installations. Exhibit C emphasizes on the last 3 years of data on wind energy generation achieved by each player state. The difference between the values in Exhibit B and Exhibit C make up the gap that can be exploited for future market competition. Microgeneration is another aspect of wind energy that can be implemented widely throughout the country. MARKET PLAYER ANALYSIS After understanding the factors that affect the wind energy market in India, it is time to have a look into the market and the players currently operating in the market. There are a number of small and big players in the wind energy market of India. Here we shall be looking at brief data of the top market players.

16

SUZLON ENERGY LIMITED Suzlon Energy Ltd., which commenced operations in India in 1995 with just 20 people, has now grown into one of the major global leaders in the wind power industry. Suzlon provides End-to-End Solutions for the Indian markets in the wind power domain. From initiating a project, till completion and beyond, Suzlon offers solutions at every stage of wind-powered energy. Some quick facts about Suzlon are: Current cumulative installed base (YTD March.2009) is more than 4400 MW across 8 states in India. Suzlon enjoys market leadership edge in India with a consistent market share of over 50% consecutively in the last 10 years. 9% global market share and ranked 3rd as global market supplier. Market leader in Asia with operations now extending to 21 countries across America, Europe and Australia. Sophisticated R&D capabilities in Denmark, Germany, India and The Netherlands In 2008-09: the total projects commissioned by Suzlon Clocked 782 MW giving the company a market share of 52% Patronized by hundreds of customers across India from varied business segments - clientele includes small / medium / big sized companies; Indian / Multinational corporate houses, private / public sector enterprises, community ownership and even High Net worth individuals (HNI)

Currently Suzlon has 11 manufacturing facilities in India employing over 3,000 people with an output of close to 12,000 MW per year. Name Production Facility Control Panel Unit Integrated Manufacturing Facility Rotor Blade Manufacturing Facility Tubular Tower Manufacturing Facility Location Chakan, Maharashtra Daman Daman Manufactured Components Generators Control Panels Rotor Blade, Nacelle, Nacelle Cover , Control Panel & Hub WTG Assembly Rotor Blades

Dhule, Maharashtra Dhule, Maharashtra

Tubular Tower

17

Tubular Tower Integrated Manufacturing Facility

Gandhidham, Gujarat Pondicherry

Tubular Towers Rotor Blade, Nacelle, Nacelle Cover , Control Panel & Hub WTG Assembly Synthetic Fiber

Composite Vadodara, Engineering Cell Gujarat

VESTAS WIND TECHNOLOGY INDIA PRIVATE LIMITED Vestas Wind Technology India Private Limited (Formally Known as NEG Micon), is a wholly owned subsidiary of Vestas Group, Denmark. Vestas is the world leader in Wind energy with a market share that is twice that of its nearest competitor. In 25 years, Vestas has installed more that 33,500 turbines in over 60 countries. In India, Vestas has been present for over a decade and has installed wind turbines across the country. Vestas Indian operation is headquartered in Chennai and has world class manufacturing facilities in Chennai and Pondicherry. ENERCON INDIA LIMITED Enercon India, since its inception in 1994, has been making giant strides. It has already installed more than 1800 wind energy converters in India with total installed capacity exceeding 1000 MW. An ISO 9001-2000 certified company for manufacturing, installation and services. It has presence in seven high wind potential states viz, Karnataka, Maharashtra, Tamil Nadu, Rajasthan, Gujarat, Madhya Pradesh and Andhra Pradesh. Enercon turbines have proven its viability in all categories of sites in the country right from Kanyakumari in Tamil Nadu to Jaisalmer in Rajasthan. Wherever they were installed the machines have performed the best both in terms of generation and in terms of low maintenance. Moreover its grid friendly nature has made it the naturally preferable wind machine. Wind Potential in India as per Enercons analysis Eight states have commercially feasible wind potential. Mapped Potential at 50 meters. Hub height - 45,000 MW. Installed as on March 2004- 2483 MW, hence huge untapped potential exists. Govt. of India has proposed capacity Installation of 10,000- 12,000 MW of renewable energy sources over next 10 years. Ministry of Non-conventional Energy Sources, Government of India plans to generate 50% of above from wind energy translating into annual additions of 5000 - 6000 MW. These are the few market players that have been touched to understand their functioning and position in the market.

18

CONCLUSION The following points can be concluded depending on the assessment of wind energy potential in India. Wind energy capacity in India is as large as 100GW. Wind energy is steadily increasing at a constant increase of about 5000MW per year which is a good sign. With the support from central and state government and the promotional policies it is easier to enter, install, generate and sell wind energy and obtain substantial profits in short span of time. The environmental affects include reduction in carbon footprint, reduction in pollution and cleaner and greener energy production. Also carbon credit earnings are an add-on profit. Technical and technological advancements are constantly improving the efficiency of wind turbines and thereby increasing the capacity. Thus it is time to answer the 2 major questions that we put forward in the start of the report. 1. Is it feasible and wise to enter the wind energy market in India? Yes. This is the best time for any firm to enter the Indian wind energy market. The conditions are favourable in all aspects that is political, economical, social, environmental, geographical and technological factors are facilitating and all direct towards a profitable business. Moreover the huge gap between the demand and supply of power and possibility of feeling the deficit with wind energy being high gives an impetus to the decision to enter the market. 2. If yes, then which state of India or which location will the firm like to target as their entry point? Looking at the various aspects and details it will be advisable to enter Maharashtra with the new projects. The reasons are as follows: The State government is providing ample subsidies, loans and tax exemptions to firms establishing wind farms in the state of Maharashtra. The geographical location of Maharashtra is best suited for establishing wind farms. With high altitude western ghats and Sahyadri ranges we have large number of suitable locations for onshore wind farms. Similarly the large coastline provides an opportunity to establish near-shore and offshore wind farms. Players like Suzlon have already established their bases in the state which prove that even other firms feel it feasible to setup projects in Maharashtra. It is also important to device a strategy to enter the market. The market strategy for wind energy generation not being very extensive or diverse can be summarized as follows: Large scale wind farms can be installed providing high capacity power generation. 19

Efficiency of installed wind farms can be improved by phasing out older turbines and replacing them with modern highly efficient turbines that have more production capacity. Thus more power is produced with same number of installations. Carbon credits earned by these projects can be utilized for other ventures or can be sold in the market to generate additional revenue. Microgeneration can be targeted as another segment. Potential areas for microgeneration projects are remote villages, tribal areas, forest areas, isolated production / mining sites of companies, border areas etc. Moreover, medium and large scale industries can install their own wind mills and obtain their own power through microgeneration and thereby saving on their electricity costs. Microgeneration can also be encouraged in small colonies and societies in urban areas for uses like water pumping, street lighting etc.

Hence, this is how we have assessed the wind energy market potential in India which represents a very bright future and loads of opportunities for growth and development in energy sector.

20

Figure 1: Schematic Diagram of a Wind Mill

21

Figure 2: Wind Map of India

22

EXHIBIT A WEG Installation Details World - Country Wise (in MW) Up dated on 01.04.2009

Year Germany Spain France Denmark Italy UK Netherlands Portugal Austria Greece Ireland Sweden Norway Belgium Poland Turkey Finland Ukraine Estonia Luxembourg Czech Republic Latvia Lithuania Switzerland Russia Hungary Croatia Slovakia Cyprus Romania Bulgaria Japan Australia New Zealand Philippines Pacific Islands Egypt

2006

2007 EUROPE 19540 21283 11340 13400 1009 2085 3137 3134 1840 2410 1937 2203 1445 1655 1314 1944 965 975 642 753 525 760 515 572 281 333 167 215 108 244 49 147 86 107 70 86 40 58 35 35 28 56 25 27 6 56 12 12 7 7 14 37 17 17 5 5 0 1 3 1 33 PACIFIC REGION 1078 1491 817 892 168 322 25 25 24 24 MIDDLE EAST & AFRICA 157 230

2008 23300 15900 3262 3148 2933 2768 2013 2462 982 910 806 736 444 287 280 423 128 86 58 35 56 27 52 14 7 112 17 5 8 109 1538 824 322 25 24 310

2009 23903 16740 3387 3180 3736 3334 2216 2833 995 985 1053 1021 436 384 405 383 143 90 78 35 133 27 52 14 11 127 17 3 10 158 1540 1306 468 33 24 365

23

Morocco Iran Tunisia Reunion (France) Israel Cape Verde South Africa Jordan Brazil Costa Rica Caribbean Argentina Colombia Cuba Mexico Chile Peru Falkland Islands Nicaragua Ecuador India China South Korea Taiwan Sri Lanka Bangladesh Texas California Iowa Minnesota Washington New Mexico Oregon Oklahoma Wyoming Colorado New York Kansas Montana Pennsylvania Illinois North Dakota Nebraska West Virginia Wisconsin South Dakota Idaho

64 47 20 10 8 3 3 2 LATIN AMERICA 206 71 57 26 20 5 5 2 1 ASIA 5341 1600 119 106 3 1 USA 2699 2323 836 794 590 407 438 475 288 291 280 264 146 153 107 128 73 66 53 44 75

124 48 20 10 8 3 3 2 296 72 57 27 20 5 88 2 1 7000 3655 175 188 3 1 3585 2376 967 897 818 496 438 595 288 366 390 364 146 178 305 179 73 66 53 44 75

124 67 20 10 8 3 9 2 273 92 57 30 20 7 88 20 1 1 2 8757 9000 224 213 3 1 5834 2508 1408 1366 1296 496 964 689 379 1067 707 465 165 294 907 435 73 230 327 197 75

134 67 54 10 6 3 9 2 336 92 57 30 20 7 88 20 1 1 2 9645 12200 233 224 3 1 7314 2517 2810 1752 1375 497 1067 708 676 1067 832 815 272 361 915 714 73 330 395 187 75

24

Tennessee Hawaii Ohio New Jersey Vermont Michigan Alaska Utah Rhode Island Massachusetts Indiana Missouri Maine New Hampshire Canada Grand Total

29 49 7 8 6 3 2 1 1 4 CANADA 1079 66,663

29 63 7 8 6 3 2 1 1 5 57 42 2 1588 81,957

29 63 7 8 6 55 2 20 1 5 130 162 42 1 1876 105,732

29 63 7 8 6 129 2 20 1 5 131 163 47 25 2369 120,645

source: http://www.windpower-monthly.com/WPM:WINDICATOR:410681362

25

EXHIBIT B
India State Wise as on 31.03.2009

Sl.No 1 2 3 4

State Tamilnadu Karnataka Maharashtra Rajasthan

Capacity in MW 4304.5 1327.4 1938.9 738.4

Andhra Pradesh

122.5

6 7 8 9

Madhya Pradesh Kerala Gujarat West Bengal Total

212.8 27 1566.5 1.1 10242.3

Source: http://www.inwea.org/installedcapacity.htm

26

EXHIBIT C
Wind Power Programme TOTAL GENERATION FROM WIND POWER PROJECTS (MU) As on 31.03.2008 S. Name of Generation Generation Generation No. the State Up to Up to Up to 2005-06 2006-07 2007-08 1 Andhra 1041.3 1190.48 1020 Pradesh 2 Gujarat 1461.31 1916.22 2924 3 Karnataka 2342.34 3470 5581 4 5 6 7 8 9 Kerala Madhya Pradesh Maharashtra Rajasthan Tamil Nadu West Bengal 15.86 234.13 3440.11 922.72 15413.3 3 15.86 304.56 5131.61 1455.32 20682.14 3 0 469 6958 2135 26748 0

Total 24874.07 34439.19 45827 Source: http://www.windpowerindia.com/statcumul.html

27

Total Generation from Wind Power Projects

2005-06 2006-07 2007-08

An

dh r

Ka

28

BIBLIOGRAPHY Indian Wind Energy Outlook 2009, GWEC. Global Wind Energy Outlook 2009, GWEC. www.suzlon.com http://www.enerconindia.net http://www.cwet.tn.nic.in www.vestas.com www.geda.org.in www.emeraldinsight.com http://en.wikipedia.org/wiki/Wind_power
http://www.windpower-monthly.com/ http://www.windpowerindia.com/statcumul.html http://mnes.nic.in

Paola Solari and Gabriella Minervini, Exploitation of renewable energy sources and sustainable management of the territory Wind farms in Regione Liguria, EIA Office, Regione Liguria, Genova, Italy Ishan Purohit and Pallav Purohit, Wind Energy in India: Status and future prospects, Journal of Renewable and Sustainable energy, 8 July 2009.

29