A humongous target to achieve, India´s 175 GW renewable dream will fall short, if the government fails to incorporate the ´vayu´ form of energy, in addition to its ´surya namaskar´ propaganda.
Smart grid is an evolving set of various technologies, especially information and communication technologies, working together to improve the present grid. Being an evolving technology, it is difficult to define it. A number of renowned organisations working towards the development of smart grid have defined it as an electricity network that can intelligently integrate the actions of all users connected to it, in order to efficiently deliver sustainable, economic and secure electricity supplies.
In a recent development, investment worth Rs 4,000 crore in wind energy is on the brink of becoming non-performing assets, as over 550 MW of projects that are ready to generate electricity are stranded because a state utility has refused to sign power purchase agreements (PPA) or issue commissioning certificates.
So far, the concept is new, and the potential of such projects has so far remained untapped in the country. Though as a concept, repowering in India has been around for two decades, the economic benefits are still on the drawing boards and nobody is willing to experiment with the technology. However, this untapped area in wind energy is likely to create immense opportunities, provided necessary, there´s a back-up plan from the government.
Now, considering India´s target of 60 GW of installed wind energy capacity by 2022, the current government is looking to push the industry towards more efficient and larger capacity wind turbines. And, according to them it is achievable with the concept of repowering.
The Ministry of New & Renewable Energy, in March announced a draft policy for repowering of old wind turbines. The policy essentially calls for replacement of all wind turbines with a rated capacity of less than 1 MW. According to the ministry, majority of the wind turbines installed prior to 2000 are of capacity less than 500 kW and represent an estimated 3 GW capacity. (Refer Classification of installed WTGs) The draft policy includes attractive incentives for project developers willing to replace old turbines. The Indian Renewable Energy Development Agency (IREDA) shall provide loans to such developers at an additional interest rate rebate of 0.25 per cent. The projects shall also be eligible for accelerated depreciation, a tax incentive available to project developers. (Refer Proposed Framework for Re-powering Project Implementation)
The state governments shall also be responsible for the smooth transition of the project during the repowering process by providing transmission infrastructure. Project developers shall also be provided with additional land, if required, for repowering the existing projects. The project developers shall also be exempted from any penalties for reduced or no sale of electricity during the repowering period. Meanwhile, the state utilities shall be mandated to procure a set minimum percentage of power from the new turbines; any additional power, resulting from the higher efficiency turbines, shall be eligible for sale to the utilities at prevailing feed-in tariff rates or to commercial and industrial consumers.
To give a ball park figure, a repowering project may roughly cost Rs 7-8 crore per MW. Therefore, if repowering is planned for minimum 2-3 GW, then the cost incurred may be in the range of Rs 14,000-24,000 crore. As per industry estimates, the repowering trend in India could translate into the sales of over Rs 19,000 crore for repowering companies for a repowering potential of 1.5-2 GW. With an estimated payback period of less than four years, this seems to be a valuable proposition which has fueled a number of wind Independent Power Producers (IPPs) to buy old wind farms at attractive valuations, keeping in mind the land and existing evacuation infrastructure.
The average capacity utilisation factor (CUF) for wind energy in India is around 20 per cent. CUF of a generator is the actual average output divided by the installed capacity. One reason for the lower CUF for wind energy is the poor grid management in the State. If a wind turbine´s output is forced to be curtailed, particularly in the windy season, the CUF would go down considerably.
Another reason is that most of the old Wind Energy Generators (WEGs) installed a few years back, are having very low capacity factor. For instance, in Tamil Nadu, almost 50 per cent of the existing WEGs installed are having lower CUF of around 15 to 17 per cent. With the improvement in grid management and addition of modern WEGs as also replacing the old WEGs through re-powering scheme, the CUF for wind energy will certainly go up in India.
For 25 GW of installed capacity through a wind turbine generation in India, currently there are approximately 36,000 numbers of wind turbines. The capacity of these wind turbines ranges from 225 kW to 2,000 kW each. Out of these, a large area is covered by more than 8,500 small wind turbines (< 500 kW capacity). The number of WTGs installed before 2002 stands at approximately 4,400 (amounting to approximately 1.38 GW of installed capacity) while the number before 1997 stands at approximately 2,663 (amounting to approximately 0.69 GW of installed capacity).
The concept of repowering has potential in the regions which have rich wind resources. States like Karnataka, Tamil Nadu and Maharashtra have more potential as of today for repowering. Experts suggests that with the help of advanced technology that we have now, repowering can double the generation of the current power generated. (Refer Repowering potential estimate for major wind rich states of India) Says KR Nair from Indian Wind Power Association, ´The repowering of old machines may result in doubling the installed capacity and tripling the energy output of an area.´ He further suggests: ´Hence, the State should provide additional evacuation facilities as the current grid facilities are mostly designed only to support the existing generation capacity and require upgradation.´
Current repowering solutions target old WTGs with a capacity of 500 kW or less. Therefore, the number of WTGs that can be repowered stands at 2,663 if WTGs older than 1997 are targeted, and at 4,400 if WTGs older than 2002 are targeted with Tamil Nadu and Gujarat, being the maximum contributors, followed closely by Andhra Pradesh, Maharashtra, Rajasthan and Karnataka. Those WTGs which have a capacity of 500 kW or less, but have not completed 10 years since commissioning is not assumed to be available for repowering as yet.
Technology to the rescue
There have been significant improvements in technology on Wind Energy Generators (WEG) to produce electricity from Wind. The improvements also include designing of taller towers and longer and lighter blades with a high rotor diameter.
As the power of wind is directly proportional to the swept area of the blades, an increase in rotor diameter results in capturing more energy particularly in low windy areas. A taller tower also ensures capturing of higher and steadier wind resources. The combination of taller tower and large rotor diameters have been vital in bringing down the cost of generation of wind energy and also improved the wind turbine availability, utilisation and capacity factors over the past three years. So, the modern WEGs are increasingly cost effective, more reliable and have scaled up in size to multi -mega watt power ratings.
Since the new windy sites available in India are having low wind, these technological advancements can and have helped installation of wind energy projects in those areas, effectively. Apart from the development of WEG, the technological advancements have also been made in the development and operation of wind farms more efficient and profitable. Further research efforts are on to address the challenges to greater use of wind energy, particularly from the low windy areas in India.
To this, Tulsi Tanti, Chairman, Suzlon Group has a different opinion. According to him, most of the wind energy supply chain has already been indigenised to India. This means that our demands will be met by local production. At the same time, we are looking to increase exports as a primary activity under the Make in India initiative. He added, ´The industry has already witnessed high technology advancement as we strive for higher generating products. An increasing number of IPPs have also invested in the sector, which is a clear indicator of its attractiveness. All these developments point to strong growth in the demand for wind energy equipment as well as the potential that exists to meet this demand.´
Challenges for repowering
Ownership of windfarm with multiple wind turbine owners in given wind farm is an issue. It is expected that all parties or WTG owners may not be willing to opt for repowering. Another threat to this untapped potential is most of the old wind projects are connected to 11 KV line (particularly in TN), which poses as the major hurdle for any repowering initiative.
However, one must not forget the biggest impediment of repowering can be land, as multiple ownership of land for given a wind farm poses another challenge for such projects. Also, optimal micro-siting for repowered site require unhindered access and planning flexibility to land site.
Meanwhile, speaking to a few industry players, they raised a few concerned over offtake arrangements. They suggested that retaining earlier offtake arrangements (sale to Discom or captive) and identifying off-takers for excess generation. The players also raised an important issue of tariff and incentives. According to them, existing tariff is too low as the power purchase agreements (PPAs) are over 20 years with perpetual nature with no termination clause. And the important part is, according to the experts, tariff is unviable for repowering projects. Meanwhile, since a utility is in a secured PPA with the developer at a much lower cost, it would not allow prior termination of PPAs to enable repowering. (Refer identifying key challenges in repowering)
Implications on captive generators
Post repowering, when the actual capacity as well as the aggregate energy yield would increase by around 2 to 3 times the present quantum; the consumer may not be able to consume 51 per cenr of the aggregate energy generated in such a plant. As a result the consumer may lose the captive status, which could result in levy of additional cross subsidy surcharge on the entire consumption of the consumer.
In the present legal framework, such captive generators would not take up repowering due to the minimum consumption criteria. Further, it may be noted that early development of wind sector has led to multiple WTG owners at a windfarm site. Repowering project could include multiple wind projects, captive or otherwise. All the project owners may or may not participate as wind repowering project.
Repowering could reduce number of turbines, but it may not be possible to evolve an arrangement with exact replacements. Further, it is possible that repowering is undertaken by one dominant investor and existing captive project owners may become minority stakeholders. As a result, the repowering project may or may not be able to meet criteria of 26 per cent ownership in such repowered project.
Power Today Suggestions:
There exist multiple options for offtake. Viz.a) Sale to Discom b) Captive model C) Sale to any 3rd Party by open access route and combination to be allowed.
Existing off-take to be protected at least for residual life period.
FIT for wind shall prevail. But to continue the tariff of old PPA, a certain incentive over and above the FITwould be required for the developer.
In case of captives, attractive wheeling and banking provision needs to be brought in.
Utility off-take as per old PPA rates to continue for balance tenure of existing PPA.
New PPA shall cover the new FIT for additional generation through repowering.
Formation of SPV with equity participation.
The evacuation infrastructure has to be upgraded to 66 KV.
Lease of land or right to use land on the footprint basis in favor of SPV.