23-06-2012, 11:18 AM
RENEWABLE ENERGY SOURCES –A SCENARIO ON INDIAN WIND ENERGY
RENEWABLE ENERGY SOURCES.docx (Size: 448.23 KB / Downloads: 94)
ABSTRACT
The electricity requirements of the world including India are increasing at alarming rate and the power demand has been running ahead of supply. It is also now widely recognized that the fossil fuels (i.e., coal, petroleum and natural gas) and other conventional resources, presently being used for generation of electrical energy, may not be either sufficient or suitable to keep pace with ever increasing demand of the electrical energy of the world. Among the different renewable energy sources, wind energy is currently making a significant contribution to power generation, and is emerging as a competitive option. This paper covers the development, and potential of wind resources in India and the role played by the private sector. India ranks fifth in the world after Germany, USA, Spain and Denmark in wind power generation with an installed capacity of about 14,158MW.
Introduction
Among the different renewable energy sources, wind energy is currently making a significant contribution to the installed capacity of power generation, and is emerging as a competitive option. The programme covers research and development, survey and assessment of wind resources, implementation of demonstration and private sector projects and promotional policies.
Wind
Wind was caused by a difference in air pressure due to unequal heating of the atmosphere. Winds are created by Heating the air, decreases pressure (warm air rises creating a low pressure) Cool air rushes into replace the warm air (cooler dense air, produces high pressure) As air goes from high to low pressure,winds form.
Characteristics of Public Private Partnership
Public Private Partnership, as the name suggests, is a symbiotic relationship between a private entity and a public or government body for the completion of a project. The main characteristics of PPP is that there is a creation of a Special Purpose Vehicle and the risks in the project are assigned to the party that is best suited to handle the risk. This creates a ‘win-win’ situation for both the participating parties, as the project is delivered on-time within the allocated budget, in contrast to the delays and cost-over-runs in case only the Government undertakes such project.Depending on the risk-allocation, PPP projects can be of many types, a few of them are Build-Operate-Transfer (BOT), Build-Operate-Own-Transfer (BOOT), Build-Operate-Lease-Transfer (BOLT). Following characteristics of PPP makes it ideally suitable for infrastructure projects:
Effective allocation of risks of Wind Power through PPP
The various risks associated with setting up of wind-farms in India can be effectively addressed through the PPP route, as has been seen in the case of Spain. The main risks that need to be mitigated are as follows: High costs Technology intensive projects Long payback period Local opposition Dependence on Government Policies for tariff structureIn a typical public private partnership set-up, there is a private player that often brings with it the technology, standardized contract and ‘best practices’ as experience gained in other PPP markets. The government as the second party of the PPP, allocates favourable tariffs and policies along with concession on import duty and excise duty exemption. There can also be provisions of soft-loan from Indian Renewable Energy Development Agency (IREDA), IIFCL, IDFC and other such bodies.
Conclusion
This can address the major concern of financing of wind-power projects. A PPP also has immunity from changing government-policies, after a fixed policy framework is put in place. It also takes the local community and land owners into confidence and hence avoids running into trouble from their side. The unique characteristic of PPP project is its in-time completion, which avoids cost-overruns. In the case of wind-power projects, escalation of cost is one of the major concerns as it is capital intensive. A Public Private Partnership in wind power projects will also have a economically viable tariff plan through ‘Power Purchase Agreement’, thus reducing the revenue-risk in the process.