Wind Power Sector in India

W
WIND POWER SECTOR IN INDIA 2010
By Vijay Chander Keesara

Cont: +91-9392 777 444
+91-9959 777 444
e-mail: vc_reddy@yahoo.com
Contents
WIND BY VIJAY CHANDER KEESARA

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1. Introduction
Some facts
Indian Power Industry
Industry Structure
Statistics of the scenario in India
Policy
Players in the Industry
2. Government Regulations and policies
Electricity Act 2003
Impact on the Industry
National Electricity Policy
Tariff Policy
Features of the Policy
Recent developments
Norms Rationalised
3. Role of Institutional Players
Central Government
State Government
Central Electricity Authority
Central Electricity Regulatory Commission
State Electricity Regulatory Commission
National Load Dispatch Centre
4. Wind energy basics
What is Wind Energy?
What is a wind Turbine?
5. Growth Potential

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6. Nuclear Power Generation

7. Investments
Strengths
Weaknesses
Opportunities
Threats
Looking Ahead
8. Impact of Budget 2008-2009
Impact on Sector
Impact on Companies
9. Predictions
10. Government Initiatives
11. Investment Plans of Corporates
12. Valuations
13. Design of Wind Mill Tower
14. Block diagram of Wind Power Generation
15. Energy Scenario in India
Present State and future potential for Wind Energy
generation in India
Wind Resource Potential
Promotional Policies and New Initiatives for
development of Wind Power
From Central Government
From State government
16. Wind Power generator manufacturing technology
available in India
17. Barriers in Wind Power development
18. Need of the Hour

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19. Investment components of project for installation

of wind energy generators having an installed capacity
of 1.00 MW
Land, Layout Plan and site development
requirement
Civil construction
Plant and machinery
Electrical
Infrastructure development and Miscellaneous
charges
Project Cost
Marketing
Insurance
Eligibility of the Borrowers
Repayment
Interest rate for the ultimate borrowers
Interest rate for refinance from NABARD
Security
20. IREDA’s Financing guidelines for Wind energy
Projects
21. What is a Project Finance
Deal Structure
Typical Deal Parameters
Experience
22. The Economics of Wind Power
Three Main Factors Affecting Cost
Installation cost
Operating and maintenance cost

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Windiness of the Site

Calculations
Total Annual Cost
Cost per Kilo Watt Hour
Other Economic Factors
23. Trends Influencing the cost of wind power
24. Operation and Maintenance cost of wind
generated power
25. Future Evolution of the cost of wind generated
power
26. State wise Wind power installation capacities
across India
27. Growth of wind Power Installed Capacity
28. Central Incentives
29. Policies Introduced/Incentives declared by the
state governments for Private sector Wind Power
projects
30. Estimated Wind power potential India (State Wise)
31. Abstract of wind Monitoring Stations in India
32. State wise list of Wind monitoring stations for
which Micro Survey has been done
33. Service Providers
Operation and maintenance (O&M)Agencies
WEG erecting Contractors
Crane Hiring Agencies
Civil Contractors
Electrical Contractors
Component repairs (other than O&M)
Insurance Companies (Surveyors & Valuers)
Consultants

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Financial Institutions
Associations and Societies
34. List of Private wind Farm owners (10 MW and
above ) as of 31-03-2008
35. State wise communication addresses (official)
36. Conclusions
ANNEXURE – I
Project on Installation of Wind energy generators
for Captive use
Detailed project Cost (for 1.00 MW)
ANNEXURE – II
Wind Power density MAP
Wind Resource MAP
Wind Power cumulative capacity MAP
Major Power transmission Locating MAP
Energy Crisis Map
ANNEXURE –III
Comparisons Between Conventional energy and
Wind Power
Power is an essential requirement for all facets of our life

and has been recognized as a basic human need. It is the
critical infrastructure on which the socio-economic
development of the country depends. The growth of the
economy and its global competitiveness hinges on the

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availability of reliable and quality power at competitive

rates. The demand of power in India is enormous and is
growing steadily. The vast Indian power market, today offers
one of the highest growth opportunities for private
developers.
India is endowed with a wealth of rich natural resources and

sources of energy. Resources for power generation are
unevenly dispersed across the country. This can be
appropriately and optimally utilized to make available
reliable supply of electricity to each and every household.
Electricity is considered key driver for targeted 8 to 10%
economic growth of India. Electricity supply at globally
competitive rates would also make economic activity in the
country competitive in the globalized environment.
As per the Indian Constitution, the power sector is a

concurrent subject and is the joint responsibility of the State
and Central Governments. The power sector in India is
dominated by the government. The State and Central
Government sectors account for 58% and 32% of the
generation capacity respectively while the private sector
accounts for about 10%. The bulk of the transmission and
distribution functions are with State utilities. The private
sector has a small but growing presence in distribution and
is making an entry into transmission. Power Sector which
had been funded mainly through budgetary support and
external borrowings was opened to private sector in 1991.
SOME FACTS
• More than 64% of India’s total installed capacity is

contributed by thermal power. Significant jump in unit

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size and steam parameters will result in higher

efficiencies and better economics for the Indian power
sector.
• Western region accounts for largest share (30.09%) of

the installed power in India followed by Southern region
with 27.76%.
• Unbalanced growth remains the cause of concern for

the Indian power sector. Only about 56% of households
have access to electricity, with the rural access being
44% and urban access about 82%.
• Southern region remains the dominant region in

renewable energy source accounting for more than
57% of the total renewable energy installed capacity.
Indian Power Industry
Growth of Power Sector infrastructure in India since its

Independence has been noteworthy making India the third
largest producer of electricity in Asia. Generating capacity
has grown manifold from 1,362 MW in 1947 to 141GW (as on
30.09.2004). The overall generation in India has increased
from 301 Billion Units (BUs) during 1992- 93 to 558.1 BUs in
2003.India’s Total installed capacity of power sector has

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been 141 GW. This India’s 141GW of total power is

generated by its three different sectors, i.e., state sector,
central sector and private sector. Stare sector contribution
has been 53% to total installed capacity. Likewise,
contribution of central sector and private sector has been
34% and 13.5% respectively.
Industry Structure
Power sector structure in India has been very simple yet well
defined. Majority of Generation, Transmission and
Distribution capacities are with either public sector

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companies or with State Electricity Boards (SEBs). National

thermal power corporation, Nuclear Power Corporation,
National Hydro Electric Power Corporation are the public
sector companies in India which are into power generation.
TATA power, Reliance Energy is domestic private players
and CLP, Marubeni Corporation is international private
players in power sector. public sector is only power
generation. Private sector participation is increasing
especially in Generation, transmission and Distribution.
Distribution licences for several cities are already with the
private sector. Three large ultra-mega power projects of
4000MW each have been recently awarded to the private
sector on the basis of global tenders.
STATISTICS OF THE SCENARIO IN INDIA

Year ENERGY(MU) PEAK(MW)
Requirem Availabil % Deman Met %Shorta

ent ity Shortag d ge
e
2002- 5,45,674 4,97,589 8.8 81,492 71,54 12.2
03 7
2003- 5,59,264 5,19,398 7.1 84,574 75,06 11.2
04 6
2004- 5,91,373 5,48,115 7.3 87,906 77,65 11.7
05 2
2005- 6,31,554 5,78,819 8.4 93,255 81,79 12.3
06 2
2006- 6,90,587 6,24,495 9.6 1,00,71 86,81 13.8
07 5 8
2007- 7,39,345 6,66,007 9.9 1,08,86 90,79 16.6
08 6 3
Source: Ministry of Power

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POLICY
Indian Power Policy framework is designed and developed
under Electricity Act 2003 and National Electricity Policy
2005. Under current policy the Government is keen to draw
private investment into the sector.100% FDI permitted in
Generation, Transmission & Distribution of power and no
discrimination is made in terms of foreign private and
domestic private players. All the companies (domestic and
private) in this particular sector are treated at par.
Incentives like, Income tax holiday for a block of 10 years in
the first 15 years of operation; waiver of capital goods'
import duties on mega power projects (above 1,000 MW
generation capacity) is being provided. Independent
Regulators that exist in Indian power sector are a) Central
Electricity Regulatory Commission for central PSUs
B)centreal electricity regulatory commission for inter-state
issue.

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PLAYERS IN TNE INDUSTRY
MAJOR CAPACITY GEN. TRANS. DIST.

PLAYERS
PUBLIC
SECTOR
NTPC 29144(MW) 
NHEPC 2755(MW) 
NPC 1412(MW) 
DOMESTIC
PRIVATE
SECTOR
TATA power 2323(MW)   
RPG group 975(MW)  
Reliance 941(MW)   
energy
INRERNATIONA
L PRIVATE
SECTOR
,NPC-Nuclear NTPC-National Thermal Power Corporation, NHEPC-National Hydro Electric Power Corporation Power Corporation,
CLP-CLP 655(MW)
China Light and Power, MC-Marubeni Corporation

MC 347(MW) 
Above table depicts that NTPC has got highest installed
capacity (29144MW) in the public sector. Secondly, all three
players in the public sector have restricted their business
only to power generation. In domestic private sector, TATA
Power is the biggest player with installed capacity of 2323
MW. All the major domestic private players are in to
generation transmission and distribution of power except
RPG group which is not in to power transmission.

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GOVERNMENT REGULATIONS AND POLICIES
Electricity Act 2003
The Electricity Act enacted in year 2003 has created a new

paradigm for the development of power sector in India. It
has abolished monopoly of the State Electricity Board
created under the Electricity (Supply) Act 1948 and has
created a new competitive framework for the development
of the power sector in India with focus on the consumers and
safeguarding their interests by independent Regulatory
Commissions. The Act has eliminated/reduced entry barriers
in the entire chain of the electricity supply business. It marks
the culmination of the process beginning in the mid nineties
of States enacting their own Reform Acts and the enactment
of the Electricity Regulatory Commission Act of 1998 which
brought into place the Central Electricity Regulatory
Commission and authorized the state to create Regulatory
Commissions at State level, if they wished to do so.
The Act has made structural change in the market

with single-buyer model to multi-buyer model moving
the market to the competitive phase
Open Access in Transmission is allowed right from the date

of promulgation of the act. Central Electricity Regulatory
Commission (CERC) has already notified regulations on non-
discriminatory open access in transmission. Open access in
distribution for the consumer consuming more than 1 MW of
power allowed after January 2009.
The Electricity Act 2003 addresses concerns of all the

players in the power sector and sets up a framework for

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development of a competitive, efficient, economically viable

and consumer friendly power sector in India.
IMAPCT ON THE INDUSTRY
• No restriction on captive generation

• Multi buyer model
• Reduce lead time
• Reduce financial and regulatory risk
• Balance inter region disparities in power abilities
• Private captive investment allowed
• Open access
• No monopoly over consumers
• Parallel distribution network allowed
• Encourage competition
• National Electricity Policy
The National Electricity Policy has been notified by the

Central Government on January 2005 under the Electricity
Act 2003 to set direction of development of the Power
Sector. Apart from the salient features mentioned above, the
policy sets momentum in following areas:
• Full development of hydro potential in India

• Choice of fuel for thermal generation to be based on
economics of generation and supply of electricity
• Development of national grid
• Availability Based Tariff (ABT) to be extended to state
level
• All India transmission tariff sensitive to distance and
direction to be introduced by the Central Commission

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• Tariff Policy
Tariff Policy has been notified by the Central Government

under the Electricity Act 2003 to set clear methodology
and principles for determining tariff by the Regulatory
Commissions and to remove the Regulatory Risks for the
various players in the Sector. The policy has addressed
critical issues of uncertainty like computation of cross
subsidy surcharge, agricultural tariff and Multi-Year-Tariff.
FEATURES OF THE POLICY
• Tariff of all generation and transmission projects in

private sector by competitive bidding-public sector to
compete in five years
• Reduction of cross subsidy to +-20% in next five
years
• Emphasis on distribution level open access; clear
computation of cross subsidy surcharge
• Transmission tariff sensitive to direction and
distance
• Strict implementation of performance standards
• Agricultural tariff to encourage sustainable use of
ground water
• Time bound introduction of Multi-Year-Tariff
structure
RECENT DEVELOPMENTS
The Central Electricity Regulatory Committee (CERC) has

issued a new notification that deals with the tariff
computation for the years 2009-10 to 2013-14
NORMS RATIONALISED

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• Return on equity (RoE) raised from 14 to 15.5 per

cent
• Provision of additional RoE of 0.5 per cent for
projects commissioned on schedule.
RoE to be computed post-tax.
• Advance against depreciation removed,
depreciation rates increased to 5.28 per cent from
3.6 per cent.
• Incentive payment linked to availability rather
than plant load factor
ROLE OF INSTITUTIONAL PLAYERS
• Central Government
• Formulate National Electricity Policy and National
Tariff Policy
• Formulate national policy on stand alone systems
• Formulate national policy on Rural Electrification
• Make Rules & Procedure for implementing
provisions of Electricity Act 2003
• Appoint Chairpersons& other members of CEA
• State Government

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• Assist Central Govt. in formulating National

Electricity Policy, Tariff Policy, etc
• Form SLDCs for optimal scheduling & dispatch for
the power systems
• Central Electricity Authority

• Advice Central Government on matters relating to
National Electricity Policy
• Advice appropriate government on technical
matters related to electrical systems
• Formulate plans for optimal utilization of resources
in accordance with National Electricity policy
• Central Electricity Regulatory Commission

• Fix tariff for generating stations either owned by
central government or having sales in more than
one state
• Regulate inter-state transmission tariff & fix
trading margin
• Grant of licenses for interstate transmission &
trading

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• State Electricity Regulatory Commission

• Fix tariff for generation, Supply, transmission
& wheeling within the state
• Fix Cross Subsidy Surcharge when open access
is allowed
• Fix trading margin for intra-state operations
• Grant of licenses for intrastate transmission &
trading
• Advice the State Govt. on policy matters
• National Load Dispatch Centre

• Interface with all the five Regional Load Dispatch
Centre’s (RLDCs) that are operational at present
to acquire real-time data to continuously monitor
integrated operation of the proposed National Grid
• To ensure optimal Scheduling & Dispatch among
the RLDCs
Wind Energy Basics:
What is wind energy?

In reality, wind energy is a converted form of solar energy.
The sun's radiation heats different parts of the earth at
different rates-most notably during the day and night, but

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also when different surfaces (for example, water and land)

absorb or reflect at different rates. This in turn causes
portions of the atmosphere to warm differently. Hot air rises,
reducing the atmospheric pressure at the earth's surface,
and cooler air is drawn in to
replace it. The result is wind.
Air has mass, and when it is in motion, it contains the energy

of that motion ("kinetic energy"). Some portion of that
energy can convert into other forms mechanical force or
electricity that we can use to perform work.
What is a wind turbine and how does it work?

A wind energy system transforms the kinetic energy of the
wind into mechanical or electrical energy that can be
harnessed for practical use. Mechanical energy is most
commonly used for pumping water in rural or remote
locations- the "farm windmill" still seen in many rural areas of
the U.S. is a mechanical wind pumper - but it can also be
used for many other purposes (grinding grain, sawing,
pushing a sailboat, etc.). Wind electric
turbines generate electricity for homes and businesses and
for sale to utilities.
There are two basic designs of wind electric turbines:

vertical-axis, or "egg-beater" style, and horizontal-axis
(propeller-style) machines. Horizontal-axis wind turbines are
most common today, constituting nearly all of the "utility-
scale" (100 kilowatts, kW, capacity and larger) turbines in the
global market.
Turbine subsystems include:
i. A rotor, or blades, which convert the wind's energy into

rotational shaft energy; •
ii. A nacelle (enclosure) containing a drive train, usually
including a gearbox*
iii. A Generator
iv. A tower, to support the rotor and drive train

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v. Electronic equipment such as controls, electrical

cables, ground support equipment, and interconnection
equipment
*Some turbines do not require a gearbox

Wind turbines vary in size. This chart depicts a variety of
historical turbine sizes and the amount of electricity they are
each capable of generating (the turbine's capacity, or power
rating).
1981 1985 1990 1996 1999
2000
Rotor (meters) 10 17 27 40 50
71
Rating (KW) 25 100 225 550 750
1,650

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Annual MWh 45 220 550 1,480

2,200 5,600
The electricity generated by a utility-scale wind turbine is

normally collected and fed into utility power lines, where it is
mixed with electricity from other power plants and delivered
to utility customers.
What is wind turbines made of?

The towers are mostly tubular and made of steel. The blades
are made of fiberglass-reinforced polyester or wood-epoxy.
How big is a wind turbine?

Utility-scale wind turbines for land-based wind farms come in
various sizes, with rotor diameters ranging from about 50
meters to about 90 meters, and with towers of roughly the
same size. A 90-meter machine, definitely at the large end of
the scale at this writing,
with a 90-meter tower would have a total height from the

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tower base to the tip of the rotor of approximately 135

meters (442 feet).
Offshore turbine designs are under further development and

will have larger rotors—at the moment, the largest has a
110-meter rotor diameter—because it is easier to transport
large rotor blades by ship than by land.
Small wind turbines intended for residential or small business

use are much smaller. Most have rotor diameters of 8 meters
or less and would be mounted on towers of 40 meters in
height or less.
How much electricity can one wind turbine generate?

The ability to generate electricity is measured in watts. Watts
are very small units, so the terms kilowatt (kW, 1,000 watts),
megawatt (MW, 1 million watts), and gigawatt (pronounced
"jig-a-watt," GW, 1 billion watts) are most commonly used to
describe the capacity of generating units like wind turbines
or other power plants.
Electricity production and consumption are most commonly

measured in kilowatt-hours (kWh). A kilowatt-hour means
one kilowatt (1,000 watts) of electricity produced or
consumed for one hour. One 50-watt light bulb left on for 20
hours consumes one kilowatt-hour of electricity (50 watts x
20 hours = 1,000 watt-hours = 1 kilowatt-hour) .
The output of a wind turbine depends on the turbine's size

and the wind's speed through the rotor. Wind turbines being
manufactured now have power ratings ranging from 250
watts to 5 megawatts (MW).
Example: A 10-kW wind turbine can generate about 10,000

kWh annually at a site with wind speeds averaging 12 miles
per hour, or about enough to power a typical household.
A 5-MW turbine can produce more than 15 million kWh in a
year--enough to power more than 1, 400 households. The
average U.S. household consumes about 10,000 kWh of

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electricity each year.
Example: A 250-kW turbine installed at the elementary

school in Spirit Lake, Iowa, provides an average of 350,000
kWh of electricity per year, more than is necessary for the
53,000-square-foot school. Excess electricity fed into the
local utility system earned the school $25,000 in its first five
years of operation. The school uses electricity from the utility
at times when the wind does not blow. This project has been
so successful that the
Spirit Lake school district has since installed a second turbine
with a capacity of 750 kW.
Wind speed is a crucial element in projecting turbine

performance, and a site's wind speed is measured through
wind resource assessment prior to a wind system's
construction. Generally, an annual average wind speed
greater than four meters per second (m/s) (9 mph) is
required for small wind electric turbines (less wind is required
for water-pumping operations). Utility-scale wind power
plants require minimum average
wind speeds of 6 m/s (13 mph).
The power available in the wind is proportional to the
cube of its speed, which means that doubling the wind speed
increases the available power by a factor of eight. Thus, a
turbine operating at a site with an average wind speed of 12
mph could in theory generate about 33% more electricity
than one at an 11-mph site, because the cube of 12 (1,768)
is 33% larger than the cube of 11 (1,331). (In the real world,
the turbine will not produce
quite that much more electricity, but it will still generate
much more than the 9% difference in wind speed.) The
important thing to understand is that what seems like a small
difference in wind speed can mean a large difference in
available energy and in electricity produced, and therefore, a
large difference in the cost of the electricity generated. Also,
there is little energy to be harvested at very low wind speeds

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(6-mph winds contain less than one-eighth the energy of 12-

mph winds).
How many turbines does it take to make one

megawatt (MW)?
Most manufacturers of utility-scale turbines offer machines in
the 700-kW to 2.5-MW range. Ten 700-kW units would make
a 7-MW wind plant, while 10 2.5-MW machines would make a
25-MW facility. In the future, machines of larger size will be
available, although they will probably be installed offshore,
where larger transportation and construction equipment can
be used. Units up to 5 MW in capacity are now under
development.
How many homes can one megawatt of wind energy

supply?
An average U.S. household uses about 10,655 kilowatt-hours
(kWh) of electricity each year. One megawatt of wind energy
can generate from 2.4 to more than 3 million kWh annually.
Therefore, a megawatt of wind generates about as much
electricity as 225 to 300 households use. It is important to
note that since the wind does not blow all of the time, it
cannot be the only power source for that many households
without some form of
storage system. The "number of homes served" is just a
convenient way to translate a quantity of electricity into a
familiar term that people can understand. (Typically, storage
is not needed, because wind generators are only part of the
power plants on a utility system, and other fuel sources are
used when the wind is not blowing. )
What is a wind power plant?

The most economical application of wind electric turbines is
in groups of large machines (660 kW and up), called "wind
power plants" or "wind farms."
Wind plants can range in size from a few megawatts to
hundreds of megawatts in capacity. Wind power plants are
"modular," which means they consist of small individual
modules (the turbines) and can easily be made larger or

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smaller as needed. Turbines can be added as electricity

demand grows. Today, a 50-MW wind farm can be completed
in
18 months to two years. Most of that time is needed for
measuring the wind and obtaining construction permits—the
wind farm itself can be built in less than six months.
What is "capacity factor"?

Capacity factor is one element in measuring the productivity
of a wind turbine or any other power production facility. It
compares the plant's actual production over a given period of
time with the amount of power the plant would have
produced if it had run at full capacity for the same amount of
time.
A conventional utility power plant uses fuel, so it will

normally run much of the time unless it is idled by equipment
problems or for maintenance. A capacity 0factor of 40% to
80% is typical for conventional plants.
A wind plant is "fueled" by the wind, which blows steadily at

times and not at all at other times. Although modern utility-
scale wind turbines typically operate 65% to 90% of the time,
they often run at less than full capacity. Therefore, a capacity
factor of 25% to 40% is common, although they may achieve
higher capacity factors during windy weeks or months.
It is important to note that while capacity factor is almost
entirely a matter of reliability for a fueled power plant, it is
not for a wind plant—for a wind plant, it is a matter of
economical turbine design. With a very large rotor and a very
small generator, a wind turbine would run at full capacity
whenever the wind blew and would have a 60-80% capacity
factor—but it would produce very little electricity. The most
electricity per dollar of investment is gained by using a larger
generator and accepting the fact that the capacity factor will
be lower as a result. Wind turbines are fundamentally
different from fueled power plants in this respect.
If a wind turbine's capacity factor is 33%, doesn't that

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mean it is only running one-third of the time?

No. A wind turbine at a typical location in the Midwestern
U.S. should run about 65-90% of the time. However, much of
the time it will be generating at less than full capacity (see
previous answer), making its capacity factor lower.
What is "availability" or "availability factor"?

Availability factor (or just "availability") is a measurement of
the reliability of a wind turbine or other power plant. It refers
to the percentage of time that a plant is ready to generate
(that is, not out of service for maintenance or repairs).
Modern wind turbines have an availability of more than 98%--
higher than most other types of power plant.
After more than two decades of constant engineering
refinement, today's wind machines are highly reliable.
Wind Energy Costs:

A number of factors determine the economics of utility-scale
wind energy and its competitiveness in the energy
marketplace. The cost of wind energy varies widely
depending upon the wind speed at a given project site. The
energy that can be tapped from the wind is proportional to
the cube of the wind speed, so a slight increase in wind
speed results in a large increase in electricity generation.
Consider two sites, one with an average wind speed of 14
miles per hour (mph) and the other with average winds of 16
mph. All other things being equal, a wind turbine at the
second site will generate nearly 50% more electricity than it
would at the first location.

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The three examples above are for costs per kilowatt-hour for
a 51 MW wind farm at three different average wind speeds
expressed in meters per second. Cost figures include the
current wind production tax credit.
Improvements in turbine design bring down costs. The

taller the turbine tower and the larger the area swept by the
blades, the more powerful and productive the turbine. The
swept area of a turbine rotor (a circle) is a function of the
square of the blade length (the circle’s radius).
Therefore, a fivefold increase in rotor diameter (from 10

meters on a 25-kW turbine like those built in the 1980s to 50
meters on a 750-kW turbine common today) yields a 55-fold
increase in yearly electricity output, partly because the
swept area is 25 times larger .and partly because the tower
height has increased substantially, and wind speeds increase
with distance from the ground. Advances in electronic
monitoring and controls, blade

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A large wind farm is more economical than a small one

. Assuming the same average wind speed of 18 mph and
identical wind turbine sizes, a 3–MW wind project delivers
electricity at a cost of Rs 2.60 per kWh and a 51-MW project
delivers electricity at Rs 1.60 per kWh— a drop in costs of
Rs 1.00 or nearly 40% . Any project has transaction costs
that can be spread over more kilowatt-hours with a larger
project. Similarly, a larger project has lower O&M (operations
and maintenance) costs per kilowatt-hour because of the
efficiencies of managing a larger wind farm.
Optimal configuration of the turbines to take the best

advantage of micro-features on the terrain will also improve
a project's productivity.
Current Status of Wind Energy Market

In order to understand the available business opportunity in
the wind energy market we need to initially access the
existing global wind energy market and determine future
growth areas in various subcontinents globally

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Global Wind Energy Sector

Salient features
Worldwide capacity reaches 121,188 MW, out of which

27,261 MW were added in 2008.
Wind energy continued its growth in 2008 at an increased
rate of 29 %.
All wind turbines installed by the end of 2008 worldwide are
generating 260 TWh per annum, equaling more than 1.5 % of
the global electricity consumption.
The wind sector became a global job generator and has
created 440,000 jobs worldwide.
The wind sector represented in 2008 a turnover of 40 billion
Euros.
For the first time in more than a decade, the USA took over
the number one
position from Germany in terms of total installations.
China continues its role as the most dynamic wind market in
the year 2008, more than doubling the installations for the
third time in a row, with today more than 12 GW of wind
turbines installed.
North America and Asia catch up in terms of new

installations with Europe which shows stagnation.
Based on accelerated development and further improved

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policies, a global
capacity of more than 1,500,000 MW is possible by the year
2020.
General Situation:
Wind energy has continued the worldwide success story as

the most dynamically growing energy source again in the
year 2008. Since 2005, global wind installations more than
doubled. They reached 121,188 MW, after 59,024 MW in
2005, 74,151 MW in 2006, and 93,927 MW in 2007. The
turnover of the wind sector worldwide reached 40 billion in
the year 2008. The market for new wind turbines showed a
42 % increase and reached an overall size of 27,261 MW,
after 19,776 MW in 2007 and 15,127 MW in the year 2006.
Ten years ago, the market for new wind turbines had a size
of 2,187 MW, less than one tenth of the size in 2008. In
comparison, no new nuclear reactor started operation in
2008, according to the International Atomic Energy Agency.
Wind energy as an answer to the global crisis:

In light
of the
threefold
global
crisis
mankind
is facing
currently
– the
energy
crisis,
the
finance
crisis
and the
environment/climate crisis – it is becoming more and more
obvious that wind energy offers solutions to all of these huge
challenges, offering a domestic, reliable, affordable and clean
energy supply. At this point of time it is difficult to predict the

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short-term impacts of the credit crunch on investment in

wind energy. However, currently smaller projects under
stable policy frameworks like well-designed feed-in tariffs are
less affected by the credit crunch than higher-risk
investments e.g. in large offshore wind farms or under
unstable political frameworks and in countries which are seen
as not offering sufficient legal stability.
Wind energy as a low-risk investment
In the mid to long term it is clear that wind energy

investments will rather be strengthened due to their low-risk
character and societal and additional economic benefits.
Investment in a wind turbine today means that the electricity
generation cost are fixed to the major extend over the
lifetime of the wind turbine. Wind energy implies no
expenses on fuel and operation and maintenance costs are
usually well predictable and rather marginal, in relation to
the overall investment.
Employment: Wind energy as job generator
One fundamental advantage of wind energy is that it

replaces expenditure on mostly imported fossil or nuclear

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energy resources by human capacities and labor. Wind

energy utilization creates many more jobs than centralized,
non-renewable energy sources. The wind sector worldwide
has become a major job generator: Within only three years,
the wind sector worldwide almost doubled the number of jobs
from 235,000 in 2005 to 440,000 in the year 2008. These
440,000 employees in the wind sector worldwide, most
of them highly skilled jobs, are contributing to the generation
of 260 TWh of electricity.
Future prospects worldwide
Based on the experience and growth rates of the past years,

it is expected that wind energy will continue its dynamic
development also in the
coming years. Although the short term impacts of the current
finance crisis makes short-term predictions rather difficult, it
can be expected that in the mid-term wind energy will rather
attract more .investors due to its low risk character and the
need for clean and reliable energy sources. More and more
governments understand the manifold benefits of wind
energy and are setting up favorable policies, including those
that are stimulation decentralized investment by
independent power producers, small and medium sized
enterprises and community based projects, all of which will
be main drivers for a more sustainable energy system also in
the future. Carefully calculating and taking into account
some insecurity factors, wind energy will be able to
contribute in the year 2020 at least 12 % of global electricity
consumption. By the year 2020, at least 1,500,000 MW can
be expected to be installed globally. A recently published
study by the Energy Watch Group reveals – as one out of four
described scenarios – that by the year 2025 it is even likely
to have 7,500,000 MW installed worldwide producing 16,400
TWh. All renewable energies together would exceed 50 % of
the global electricity supply. As a result, wind energy, along
with solar, would conquer a 50 % market share of new power
plant installations worldwide by 2019. Global non-renewable
power generation would peak in 2018 and could be phased

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out completely by 2037.
Continental Scenarios:
In terms of continental distribution, a continuous

diversification process can be watched as well: In general,
the focus of the wind sector moves away from Europe to Asia
and North America. Europe decreased its share in total
installed capacity from 65.5 % in 2006 .to 61 % in the year
2007 further down to 54.6 % in 2008. Only four years ago

Europe dominated the world market with 70.7 % of the new
capacity. In 2008 the continent lost this position and, for the

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first time, Europe (32.8 %), North America (32.6 %) and Asia
(31.5 %) account for almost similar shares in new capacity.
However, Europe is still the strongest continent while North
America and Asia are increasing rapidly their shares. The
countries in Latin America and Africa counted for respectively
only 0.6 % and 0.5 % of the total capacity and fell back in
terms of new installations down to respectively only 0.4 %
and 0.3 % of the additional capacity installed worldwide in
the year 2008.
Growth Potential
According to a report by KPMG and CII, India's energy sector

will require an investment of around US$ 120 billion-US$ 150
billion over the next five years.
The government has revised its target of power capacity

addition to 90,000 MW in the 11th Five-Year-Plan (2007-12),
up by 11,423 MW from the earlier estimate of 78,000 MW to
sustain the growth momentum of the economy.
Further, according to the Planning Commission estimates,

renewable energy (RE) projects worth US$ 16.50 billion, for
the generation of 15,000 MW power, would come up in the
11th Plan.
Moreover, the government has earmarked a total capital

subsidy of US$ 6.88 billion for providing electricity

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connections and for the distribution of infrastructure to rural

households.
Investments
According to an ASSOCHAM study during January-June 2008,

investment announcements totalling to US$ 40.84 billion
were made in the power sector.
Reliance Power Transmission will invest nearly US$ 348.66

million in setting up a 1,500-km transmission line.
Hyderabad-based Greenko Group plans to invest about US$

300 million in three years for setting up about 15 clean
energy projects in the country.
Strengths
 India has the fifth largest electricity generation capacity

in the world
 Transmission & Distribution network of 6.6 million
circuit km - the third largest in the world
 Potential for growth in this sector (demand exceeding
supply)
 Increasing focus on renewable sources of energy
 Government presence in the sector (encouraging entry
of foreign players)
 No barriers to entry
Weaknesses
 Public sector players are only into generation of power

 Large demand-supply gap: All India average energy
shortfall of 9% and peak demand shortfall of 14%
 Lack of exposure of entrepreneurs to handle
international contracts

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 Inexperience of SEBs to handle changing market

environment in addition to their weak financial
condition
 Unavailability of fuel and unwillingness of fuel suppliers
to enter into bankable contarcts
 Lack of necessary infrastructure to transport and store
fuel, high cost risk involved in transporting fuel
Opportunities
 huge population base

 Opportunities in Generation
 Ultra Mega Power Plants (UMPP) – 9 projects of 4000

MW each.
 Coal based plants at pithead or coastal locations which
are untapped.
 Hydel power potential of 150,000 MW is untapped as
assessed by the Government of India.
 Renovation, modernisation, up-rating and life extension
of old thermal and hydro power plants.
Threats
 Competition to domestic players from foreign Pvt.

players as 100% FDI permitted by government in
Generation, Transmission & Distribution
 Not a lucrative option for investors(ROE )
 Rise in price of raw materials
 Tariffs are distorted and do not cover cost
Looking ahead
A recent study by consultancy major McKinsey estimates

India's power demand to increase from the present 120 giga
watt (GW) to 315 GW–335 GW by 2017, if India continues to
grow at an average of 8 per cent over the next 10 years.

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This would require a five- to ten-fold rise in power

production, entailing investments worth US$ 600 billion over
the next ten years.
To feed its rapidly growing economy, India is planning to get

an additional 60,000 MW of electricity from various hydro-
power projects by the end of 2025.
The government targets providing electricity for all by 2012.

Under the Rajiv Gandhi Grameen Vidyutikaran Yojna, the
Ministry of Power plans to electrify 120,000 villages in the
current Five Year Plan (2007–12).
FINANCIA
Financingrequiredfor the Powe

160.0
140.0
120.0
IMPACT OF BUDGET 2008-09

Gap coveredby public financing
100.0
self -financing, donor funding,
WIND BY V I J A YandA ra
CH N Dtio
ER n
Kin
E Eg
S.
ARA
80.0 Page 161
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The finance minister Mr. P Chidambaram urged in powering

the country's power sector while reading out its second
union budget in the parliament. The 'populist' union budget
evoked somehow positive response from both consumer and
industrial point of view.
The power industry in the India has to witness the peak

power shortages, where demand of the electricity is far more
exceeding than the supply. The difference between the two
is estimated to be nearly 7% and 12% in terms of total and
peak requirements. For bridging the gap between demand
and supply, the government is envisaged in setting up of
around 78,000 MW of power generating capacity during the
11th five year plan, which covers the time period of 2007 to
2012.
The finance minister announced the total allocation of Rs.

5500 Crore for the Rajiv Gandhi Grameen Vidyutikaran
Yojana, which will be continued in the eleventh five year plan
also with a capital subsidy of Rs. 28,000 Crore. The budget
2008-09 is proposed to spend Rs. 5500 Crore in lightning up
5000 villages across the country. The scheme aims in
providing free electricity benefits to those villagers which are
below the poverty line. The new fund outlay will clearly help
in the setting and development of power infrastructure in
villages.
India is one of the largest consuming countries of coal. For

bringing uniformity in the process of coal production and
pricing, coal distribution policy has been announced. Coal
regulator has to be appointed. The proposal of a coal
regulator shall benefit the generating companies, which are
badly hit by rising fuel prices.
The finance minister has announced the withdrawal of

exemption from 4% additional duty of customs levied under
section 3(5) of customs act, 1975 on transmission, power
generation projects, sub transmission, distribution projects
and specified goods for high voltage transmission projects.

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Rs. 8000 Crore has been set aside in 2008-09 for accelerated
power development and reforms project. The custom duty
on project imports has been reduced from 7.5% to 5%.
At Tilaiya, fourth UMPP (Ultra Mega Power Projects) has to be

awarded shortly. Besides this Chhattisgarh, Tamil Nadu,
Maharashtra & Karnataka are coming up with five more
UMPPs with the available govt. support. Power generation
companies like Tata Power and NTPC are more likely to be
befitted with the allocation of UMPPs. 4% countervailing duty
on imports is levied on power plants less than 1000 MW. The
finance minister has decided to set up a 'National
Transmission and Distribution Fund' for proper transmission
and distribution reform and for addressing the higher losses
in the power sector.
Rajiv Gandhi Grameen Vidyutikaran Yojana to be continued

during the Eleventh Plan period with a capital subsidy of Rs
28,000 Crore ;allocation of Rs 5,500 Crore for FY09.
Rs 800 Crore to be provided for Accelerated Power

Development and Reforms Project (APDRP).
Proposal to set up a national fund for transmission and

distribution (T&D) reform.
Impact on sector
 Aggressiveness in allotting UMPPs to prospective

bidders expected to speed up the generation capacity.
 Setting up of a national fund for T&D reforms to provide
a more focused approach.
 Coal distribution policy and appointment of a coal
regulator to bring regularity to the process of coal
production and pricing.

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Impact on companies
 National fund for T&D reforms to help prospects of

companies like Tata Power and REL.
 Reforms in the coal sector to help generation
companies like NTPC, Tata Power and Reliance Power.
 Removal of custom duty exemption on power projects
to impact companies like NTPC and Tata Power.
 But imposition of a 4% special countervailing duty on
imports for power plants less than 1,000 MW is causing
grief.
The union budget 2008-09 is silent on the extension of

section 80IA tax benefit for power projects. Non extension of
the section may have adverse impact on the power projects
which are being commencing in current financial year. As
they may not be completed before March 31, 2010, which is
the last date for commissioning under the existing 80IA tax
provision of the Income Tax Act, 1961.
PREDICTIONS
 India requires an additional 90,000 MW of generation

capacity by 2012.
 Opportunities in Transmission network ventures -
additional 60,000 circuit km of Transmission network
expected by 2012.
 Total investment opportunity of about US$ 150 billion
over a 5 year.
 By end March 2008, India will achieve Commercial
Operation Date (COD) on about 10,000 MW, marking
the best first year in any Plan period.
 As per recent budget, Govt to will provide Rs.800 Crore
for the Power Development and Reforms Project.

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 Govt. propose to create a national fund for transmission

and distribution reform in order to improve the poor
state of transmission and distribution (T&D) that has
been a drag on the sector.
 The fourth Ultra Mega Power Project (UMPP) at Tilaiya to
be awarded shortly.
 Possibility of bring up five more UMPPs in Chhattisgarh,
Karnataka, Maharashtra, Orissa and Tamilnadu.
 In Hydro projects, 77 schemes have been identified
with a total of 33,000 MW capacity additions
Government Initiatives
Moreover, the following major policy initiatives of the

government have increased the attractiveness of the power
sector:
- Captive power plants have been freely permitted.
- Open access to transmission encouraging competition

amongst generators and distributors and trading in power
from surplus to deficit regions.
- Generating companies permitted to distribute electricity in

rural areas
- Automatic approval for 100% foreign equity is permitted in

generation, transmission, and distribution and trading in
power sector without any upper ceiling on the quantum of
investment
Investment Plans of Corporate
The corporate sector has been gearing to grab the

opportunities in the power sector. According to an Assocham

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study, of the total $132.13bn corporate investment

announced during the first half of 2008, maximum were from
the power sector with 33.9% share. Few significant examples
are:
- Reliance Power plans to invest $12.5bn in the next five years

to add 15,000 MW of capacity.
- Videocon plans to invest $5.21bn in setting up 5,000MW

thermal power projects.
- Lanco plans to invest $3.75bn in setting up 3000MW hydro-

power project by 2015.
- Essar plans to invest $1bn in setting up a 1200MW of power

project.
- Bharat Heavy Electricals (BHEL) in collaboration with Bharat

Electronics plans to invest $1.23bn in setting up an
integrated photovoltaic facility.
Valuations
Going forward, given the ever increasing demand in the

power sector, favourable initiatives of the government and
ambitious investment plans of the companies; the power
sector has good growth potential. Government's increased
focus on private public partnership (PPP) for power projects
provides tremendous opportunities for the private
companies.
Company TTM EPS P/E 2009 P/E 2008

NTPC 9.01 19.7 21.2
Power Grid Corporation 3.99 24.1 23.6
Neyveli Lignite 6.46 1.8 16.1
Jaiprakash Hydro-Power 5.06 5.4 9.4

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Torrent Power 7.13 9.8 13.2

Tata Power 32.11 20.6 23.0
Reliance Infrastructure 48.47 10.0 23.7
BHEL 59.27 23.8 31.6
DESIGN OF WINDMILL TOWER ( all dimensions in
cm)

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BLOCK DIAGRAM OF WIND POWER GENERATION
WIND WIND
WIND TURBINE
GEARING AND COUPLING
ELECTRICAL GENERATOR
CONTROLLER
ENERGY STORAGE
ENERGY STEP-UPING
DEVICE

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LOAD UTILIZATION
1. Energy Scenario in India
India is a power-starved country. The total installed power

generation capacity in India stood at 1,05,714.29 MW including
thermal, hydel, nuclear and renewables. The contribution of
thermal, hydel, nuclear and renewable sources of power towards
the total installed power generation capacity were 73%, 23.50%,
2% and 1.50% respectively. According to a recent estimate there
is a demand gap of 8-10% and a peak load demand gap of 18-
20% in the country. The problem is also accentuated by the fact
that there is very little decentralized generation of power and
vast areas in the rural segment is not connected by grid power.
This is where tapping wind energy for generation of grid quality
electricity on a decentralized manner can be of immense help to
the country.
2. Present state and future potential for wind energy

generation in India
Exploitation of wind energy has been in place from time

immemorial but the development of technology for tapping the
same for generation of grid quality electricity is of a recent origin.
India has been quick to make a foray in this area. It has made its
mark as one of the top ranking countries in the world in wind
power generation. With an installed generation capacity of
1702.30 MW of wind power, India now ranks 5th in the world
after Germany, USA, Denmark and Spain in wind power
generation. According to a recent estimate, the gross wind power
generation potential in the country is estimated at 45,195 MW at
50 Mtr. Hub Height. Hub height is defined as the height from the
Ground Level (GL) at which the hub of the windmill or the hub of
the propeller blades of the wind energy generator is situated. The
state wise potential and installed capacity is given in the table
below:

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Table-1
State Gross Total Installed

Potential Capacity in MW
in MW
Demonstra Private Total
tion Sector Capacity
Projects Projects (MW)
(MW) (MW)
Andhra 8275 5.40 87.20 92.60
Pradesh
Gujarat 9675 17.30 149.60 166.90
Karnataka 6620 2.60 93.60 96.20
Kerala 875 2.00 0.00 2.00
Madhya 5500 0.60 22.00 22.60
Pradesh
Maharashtr 3650 6.40 392.80 399.20
a
Orissa 1700 6.40 18.70 25.10
Rajasthan 5400 19.40 875.60 895.00
Tamil Nadu 3050 1.10 0.00 1.10
West 450 1.60 0.00 1.60
Bengal
Total 45195 62.80 1639.50 1702.30
The present installed capacity of 1702.30 MW of wind power is

around 3.78% of the total potential in the country. The
achievement during the VIIIth Plan was significant. 860 MW of
wind power capacity was added during the plan period as against
the initial target of 100 MW and the revised target of 500 MW.

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Ministry of Non Conventional Energy Sources (MNES); a full

fledged Ministry of Govt. of India looking after the promotional
and development policies of renewables in the country; has year
marked a target of 5,000 MW from wind energy sources by 2012
i.e. the end of the XI th Five Year Plan.
3. Wind resource potential
The wind power generation in the country is influenced to a

great extent by the wind speed and wind power density prevalent
at a particular potential location at any given point of time. The
wind speed is affected to a large extent by the strong
southwesterly monsoons, starting in May-June, and at the same
time by the weaker northeastern monsoons in the winter months.
It has been generally observed that 60-70% of the total wind
power generation in the country takes place during June- October
when the southwest monsoons are prevalent through out the
country. According to a latest study, locations having an annual
mean wind power density greater than 150 watts/ square meter
at 30 meter hub height have been found to be suitable for
development of wind power projects. The details of these sites
are available in the wind energy atlas of India.
4. Promotional policies and new initiatives for

development of wind power
Govt. of India and state govts. have developed suitable policies

and guidelines for providing technical help, financial support and
various other incentives for development of wind power in the
country. These include R&D activities for design and
development of low cost indigenous wind energy harnessing
technologies, dissemination of the developed technologies
through demonstration projects, setting up of the commercial
wind farms through central and state government subsidy,
providing financial incentives to potential entrepreneurs etc.
The various incentives that are being provided by the central and
the state governments are as per the details given below:

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From Central Government
· Income Tax Holiday
· Accelerated Depreciation
· Concessional Custom Duty/ Duty Free Import
· Capital/ Interest Subsidy
From State Governments
· Energy buyback, power wheeling and banking facilities
· Sales tax concession benefits
· Electricity tax exemption
· Demand cut concession offered to industrial consumers

who establish power generating units from renewable energy
sources
· Capital Subsidy
The table given below depicts the initiatives provided by some of

the state governments towards development of commercial wind
power projects.
These calorific values or heat values indicate that bio-gas can

perform works similar to fossil oil in domestic cooking, lighting
etc., with better efficiency depending upon the methane content
in it. The bio-gas has also the potential for use in internal
combustion engines used for pumping water etc. for which
research and development works are in progress. Biogas,
therefore, has a bright future as an alternate renewable source of
energy for domestic and farm use.
3. Bio-Gas, its Production Process and Composition
It would be useful to know what bio-gas is and what its properties

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are-
(i) Bio-gas: Itmainly comprises of hydro-carbon which is

combustible like any hydro-carbons and can produce heat and
energy when burnt. The chemical formula of the hydro-carbon is
CH4 where C stands for carbon and H for hydrogen and
chemically the gas is termed as methane gas. The chemical
formula of some other commonly used hydrocarbons derived
from fossil oil viz. petrol, kerosene, diesel, etc. are C6H14 ,
C9H20 and C16H34 respectively. Unlike these hydro-carbons
which are derived from direct chemical processes, bio-gas is
produced through a bio-chemical process in which some bacteria
convert the biological wastes into useful bio-gas comprising
methane through chemical interaction. Such methane gas is
renewable through continuous feeding of biological wastes and
which are available in plenty in rural areas in the country. Since
the useful gas originates from biological process, it has been
termed as bio-gas in which methane gas is the main constituent.
(ii) Production Process:The process of bio-gas production is

anaerobic in nature and takes place in two stages. The two
stages have been termed as acid formation stage and methane
formation stage. In the acid formation stage, the bio-degradable
complex organic compounds of solids and cellulose presents in
the waste materials are acted upon by a group of acid forming
bacteria present in the dung and reduce them into organic acids,
CO2, H2, NH4 and H2S. Since the organic acids are the main
products in this stage, it is known as acid forming stage and this
serves as the substrates for the production of methane by
methanogenic bacteria.
In the second stage, groups of methanogenic bacteria act upon

the organic acids to produce methane gas and also reduce CO2
in the presence of H2 to form methane (CH4). At the end of the
process the amount of oxygen demanding materials in the waste
product is reduced to within the safe level for handling by human
beings. There are four types of methano-genic bacteria; Methano-
bacterium, Methano-spirillium, Methano-coccus and Methano-
circina. These bacteria are oxygen sensitive and photo-sensitive

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and do not perform effectively in the presence of oxygen and

light.
Constituents
The gas thus produced by the above process in a bio-gas plant
does not contain pure methane and has several impurities. A
typical composition of such gas obtained from the process is as
follows:
Table –II
Items Andhra Karnata Madhya Mahar- Rajasth Tamil West

Pradesh ka Pradesh ashtra an Nadu Bengal
Wheelin 2% of 2% of 2% of 2% of 2% of 2% of 2% of
g energy energy energy energy energy energy energy
Banking 12 2% p.m. - 12 12 12 6
months for 12 Months Months Months Months
months
Buy - Rs. Rs. Rs. Rs. 2.25/Rs. Rs. On
Back 2.25/ 2.25/ 2.25/ Kwh (5% 2.75/ 2.25/ case to
Kwh Kwh Kwh no escalati Kwh Kwh case
(5% (5% escalati on (5% (5% basis
escalati escalati on 1994- escalati escalati
on on 95) on on
1997- 1994- 1999- 1995-
98) 95) 2000) 96)
Third Not Allowed Allowed Allowed Allowed Not Not
Party allowed Allowed Allowe
Sale d
Capital 20% Max. Rs. Same 30% - - -
Subsidy Max. 25.00 as other Max. Rs.
Rs. Lakh for industri 30.00
25.00 backwar es Lakh
Lakh d areas
Other Industry No - 100% No No -
incentiv status electrici sales electrici electrici
es ty duty tax ty duty ty duty

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for 5 exempti for 5

years on years
Apart from the same, MNES has set up an autonomous body

called The Center for Wind Energy technology (C-WET) with
assistance from the Danish Government. C-WET conducts
research and development work for development of indigenous
technology for wind power generation, preparation of technical
standards for certification of wind power generators, award of
certificates for the development as well as consultancy activities
for development of market for wind power.
On similar lines to C-WET few other autonomous bodies namely

Wind Energy Producers Association (WINPRO) and Indian Wind
Turbine Manufacturers Association (IWTMA) have been created.
The objective of WINPRO is to create awareness about the
development of wind power in the country, creating consensus
about solving technical problems and development of skilled
manpower through organization of countrywide seminars,
workshops etc. Similarly the function of IWTMA is to discuss/ take
up issues concerning wind turbine manufacturers with central,
state governmental and other concerned agencies, work towards
an amicable solution to the issues so that development and
penetration of wind power in the country can take place in a
sustainable manner.
5. Wind power generator manufacturing technology

available in the country
The wind turbines installed so far in the country are

predominantly of the “fixed pitch” type. The degree by which the
Wind Energy Generator (WEG) propeller blades can be made to
tilt through mechanical or electrical controls is called the pitch of
the WEG. However, with technological advancement, the use of
WEGs with better aerodynamic designs, lighter and larger blades
made up of fibre glass material with epoxy coating, higher

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tubular towers, direct mesh drive and variable speed gearless

operation using advanced power electronics is gaining
momentum.
Technological advancement is being made nowadays for

complete elimination or reduction in reactive power consumption
by the WEGs. Reactive power is defined as the power required for
cutting the electromagnetic field generated within the armature
coil of the electrical generator of a WEG under static condition for
it to rotate and generate electrical power. The unit size of the
WEGs has also gone up from 55-100 KW to 400-750KW for
commercial projects being implemented nowadays.
6. Barriers in wind power development
In spite of the availability of various financial incentives and

availability of technological know-how, the development of wind
power is very tardy in the country. The main bottlenecks for
large-scale development of wind power in the country can be
attributed to the following:
1.Distortions in the energy market

2.Stiff competition from subsidized conventional energy and its
universal acceptability
3. Lack of awareness and organizational skill required for
propagating the technology
4.Technological constraints for limited level of grid penetration
(20% maximum)
5. Inappropriate estimation of the power load that is to be
served by the WEG
6.Lack of adequate capital at affordable cost
7.Laborious and tardy procedure for site allocation
7. Need of the hour
The following are the need of the hour:
1. Urgent efforts are required for the design and development

of low cost, simple to use wind turbines. The manufacturers

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in India who have a tie up with foreign firms should see that
the level of indenization of the WEGs is increased so that
the plant and machinery cost is reduced.
2. Suitable extension mechanism has to be devised wherein
the benefits of development of wind power can be
disseminated to the rural communities, village panchayats
so that collective organizational skills can be developed.
3. Simple, easy to understand and lucid techniques should be
devised which can help in correct estimation of power
requirement at various power-consuming units.
4. The various agencies providing institutional finance have
got a key role to play by providing finance to the promoters
at concessional rate of interest, repayment period matching
to the level of annual revenue available for repayment of
debt, provision of adequate grace period, rationalization of
the process of creation of charge by the bankers on the
securities of the promoters etc.
5. Simplification of procedure for speedy land/ site allotment
for the wind turbines.
Therefore, in order to bring the desired information in the

knowledge of potential entrepreneurs and in order to properly
guide them in establishment of projects on wind energy
generators, the present model having an installed wind power
generation capacity of 1.00 MW has been formulated.
8. Investment components of project for installation of

wind energy generators having an installed capacity of
1.00 MW
The various investment components are as follows:
Land, layout plan and site development requirement:
The land requirement for installation of the wind energy

generators will depend upon the total installed capacity of the
wind farm. The site should have been identified by MNES or its
state level sister agencies for its potentiality for development of
wind power based on technical parameters such as avg. yearly

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wind speed, wind power density, wind direction etc. The site
should find a mention in the wind energy atlas of India having
potentiality for wind power development. The average yearly
wind speed of the site should be greater than the minimum cut-in
wind speed for the specific WEG proposed to be installed. Micro
sitting at the site should also have been done by MNES or
concerned state level agency. Non agricultural land should
invariably be used for installation of the WEGs. A minimum
distance of 7 times the rotor diameter should be maintained
between 2 adjacent WEGs installed in a single row, whereas a
minimum row to row distance of 3 times the rotor diameter
should be maintained between 2 WEGs. Therefore, approximately
an area of 4.00 acre is required for installation of 1.00 MW
capacity wind power plant. The tentative cost of land and land
development charges for the model project has been considered
at Rs. 4.00 Lakh.
It has been observed from experience that the major WEG

manufacturers generally purchase land in bulk from MNES/ State
Nodal Agencies for installation of WEGs. Thereafter, the
companies negotiate for establishment of WEGs with corporates,
partnership firms, individuals etc. Once the contractual
agreement is signed, the WEG manufacturing companies go in for
installation and commissioning of the WEGs on a turn key basis.
They also help in completing all the legal formalities and making
arrangements for forward linkages viz. signing of the power
purchase agreement (PPA) with the concerned state electricity
board (SEB) for sale of wind power, using the power transmission
and distribution infrastructure of the SEB for wheeling of power
for captive use etc, third party sale, banking etc. The WEG
manufacturing companies thereafter transfers the ownership of
the projects to its true owners. However, they continue to
operate the project on behalf of the corporates, partnership
firms, individuals etc. as well as carry out annual repair and
maintenance operations based on annual contractual agreement.
Civil construction:
As a thumb rule approximately 2.30% of the total project cost

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involved in a 1.00 MW capacity Wind Energy Farm is used

towards meeting the cost of civil infrastructure.
The cost include construction of sheds for installation of the

control panel, metering unit, construction of foundation for the
lattice/ tubular tower on top of which the WEGs is to be housed. A
cost of Rs. 3.00 Lakh /unit (WEG) has been considered for the
model project . Thus the total cost amounts to Rs. 3.00 lakh x 4 =
Rs. 12.00 Lakh.
Plant and Machinery:
In the proposed model project four number of WEGs are proposed

to be installed. Some of the important technical specifications of
the machines have been presented in the table given below:
Table-III
Technical specifications of the WEGs
Rated Capacity 250KW

Rotor Diameter 30m
Hub Height 50m
Rotor with Pitch Control
Type Upwind rotor with active pitch
control
Direction of rotation Clockwise
Number of blades 3
Length of blades 14m
Swept Area 707 m 2
Blade Material Fiber glass ( reinforced epoxy)
with integral lightening
protection

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Rotor Speed Variable 18-50 rpm

Tip Speed 25-75 m/s
Pitch Control Three synchronized blade pitch
systems with battery back up
Generator Rigid
Hub Bearings Tapered roller bearings
Grid Feeding AC-DC-AC through converter-
inverter
Braking System 3 independent aero brakes with
emergency backup supply
Yaw Control Active through arrangement
gears, friction damping etc.
Cut-in wind speed 2.5 m/s
Rated wind speed 13 m/s
Tower Steel tubular
As a thumb rule 86% of the total cost for erection and

commissioning a 1.00 MW capacity wind farm is incurred towards
cost of plant and machinery. Under the model project a cost of
Rs. 104.00 Lakh ( inclusive of packaging, handling, erection and
commissioning charges etc.) has been considered for the supply
of each WEG of 250 kW installed power generation capacity at
the site. Thus the total cost amounts to Rs. 104.00 Lakh x 4nos.
= Rs. 416.00 Lakh
Electricals:
Suitable step up transformers with 33 KV as output voltage are

also required for stepping up the voltage of generated power for
onward feeding the same to the state power grid. A cost @ Rs.
4.50 Lakh per transformer unit totaling Rs. 18.00
Lakh has been considered for the model project. Apart from it, a
cost of Rs. 0.975 Lakh has also been considered towards cost of
33 KV OHT Line.

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Infrastructure development / miscellaneous charges:
A cost of Rs. 25.00 Lakh has been considered for the model
project.
Project Cost:
The detailed item wise project cost considered are as follows:
Table -IV
Detailed project Cost

(Rs. Lakh)
S.N Description Rate/unit Qty. or no.

o. (Rs.in Lakh) of units Amount
1 Purchase of land, Lump sum 4.00 acres 4.00
land amount
development
and fencing
charges
2 Supply of WEG of 100.00 4 400.00
250 kW capacity
each
3 Packaging , 1.00 4 4.00
handling, loading
, transportation,
unloading and
insurance cover
till erection of
WEGs
4 Foundation and 3.00 4 12.00

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other civil
structures
5 Electrical and 4.50 4 18.00
Transformers 33
KV
6 Erection and 3.00 4 12.00
Commissioning
7 Other project 25.00 1.00 MW 25.00
cost including
charges for
infrastructure
development @
Rs. 25 Lakh per
MW for 1.00 MW
8 Cost of 33 KV 0.975
OHT Line
( External and
internal) 0.15 KM
assumed approx.
@ Rs. 6.50 lakhs
per KM or as
actual
9 Total 475.98
9. Marketing
The wind power generated can be:
i. Used for captive use through wheeling using the

power grid of the concerned state electricity board.
ii. Can be directly sold to the State Electricity Board
The banks are requested to make themselves familiar with the

wind power development policies brought out by IREDA and it's
sister concern at the state level for financing WEG installation
project proposals.

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10. Insurance:
The wind energy generators should be adequately insured.
11. Eligibility of the borrowers:
The borrowers can be proprietary and partnership firms,

cooperatives, joint stock companies, joint sector companies etc
12. Repayment:
The repayment schedule has been calculated considering the

tenure of the term loan of 5 years without any grace period.
However, banks are free to decide upon the repayment schedule
depending upon the net cash flow assessed.
13. Interest rate for ultimate borrowers:
Banks are free to decide the rate of interest within the overall RBI
guidelines . However, for working out the financial viability and
bankability of the model project we have assumed the rate of
interest as 12% p.a.
14. Interest rate for refinance from NABARD:
As per circulars of NABARD issued from time to time.
15. Security:
Banks may take a decision as per RBI guidelines.
Results of financial analysis are as under:
The financial analysis of the investment on installation of Wind

Energy Generators for generation of wind power has been
attempted for two different scenarios.
1. Power is wheeled through the power grid of the concerned

state electricity board for captive use.
2. Wind power generated is directly sold to the to the state

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electricity board.
The results are place in annexures I(a) to VIII(a) and I(b) to VIII(b)
respectively. The project has a margin money component of 25%
with the rate of interest on term loan and working capital as 12%
p.a. and 13% p.a. respectively. The financial indicators for two
different investment scenarios are as under:
I. Power is wheeled through the power grid of the concerned

state electricity board for captive use.
1.Net present value @ 15% DF (NPV) : Rs. 471.845

Lakh
2.Internal Rate of return (IRR) : 27.37%
3.Benefit Cost Ratio (BCR) : 1.79: 1
4.Average Debt Service Coverage Ratio (DSCR): 1.75:1
II. Wind power generated is directly sold to the state electricity

board.
1. Net present value @ 15% DF (NPV) : Rs. 333.369

Lakh
2. Internal Rate of return (IRR) : 21.92 %
3. Benefit Cost Ratio (BCR) : 1.55:1
4. Average Debt Service Coverage Ratio (DSCR) : 1.61:1

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Project on Installation of Wind Energy Generators for

captive use of wind power
Check ANNEXURE-I

commercial use of wind power
Check ANNEXURE-I
IREDA's Financing Guidelines for Wind Energy Projects

(w.e.f. 25 .05.2009)
Sl. Financi Intere Maximu Minimum Term Remark
No ng st m Promoters’ Loan

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. Sc Rate Repayme Contributio from

he (%) nt Period n IREDA
m p.a (%)
es (Years)
1. Project 11.25 10 30% Upto Projects
fin to 70% setup by
an 11.90 of manufacture
cin total rs or their
g Projec subsidiaries
- t Cost with
Se minimum
tti capacity of
ng 5 MW may
up avail
of additional
wi loan upto
nd 15%
far secured by
ms BG/FDR and
on generation
ow guarantee is
ne provided for
rsh entire loan
ip / period to
lea the
se borrowing
ba company
sis and the
same is
assigned to
IREDA
Note:
1. The above interest rates are variable and will
automatically reset upon expiry of every 3 years
from the date of first disbursement/reset.
2. The option is available for a fixed interest rate for
the entire loan period subject to the condition that
1% additional interest shall be charged.

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3. Maximum of 1 year grace period after

commissioning of project will be applicable for
commencement of principal repayment.
4. Rebate of 0.75% will be given in the event of
borrower furnishing security of Bank Guarantee or
Pledge of FDR issued by Scheduled Banks.
Eligibility Criteria For Financing

Who Can Apply?
• Public, Private Ltd companies, NBFCs and
registered Societies.
• Individual, Proprietary and Partnership firms (with
applicable conditions)
• State Electricity Boards which are restructured or in
the process of restructuring and
eligible to borrow loan from REC/PFC.
General Eligibility Criteria for Applicants
• Profit making companies with no accumulated losses.
• Debt Equity Ratio not more than 3:1 ( 5:1 in case of
NBFCs - Conditions Apply)
• No default to IREDA and other FIs / Banks
• No erosion of paid-up capital.
Note: Applicants who are loss making/ not meeting the
criteria relating to accumulated losses/debt equity ratio
shall be eligible for financing if Bank Guarantee / FDR is
provided as security for the entire loan.
Eligible Projects
• Projects demonstrating techno commercial
viability.
• Grid connected wind farm projects in identified windy
sites appearing in the MNRE / CWET
list of potential sites for wind farm projects in the
country.
• Projects incorporating wind electric generators
appearing in the C-WET approved
manufacturers list.
• Project sites having mean annual wind power density
of over 200 Watts/Sq.m. at 50m
above ground level(agl).

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• Project incorporating new Wind Electric Generators

with the capacity 225 kW and above.
• Refinancing of Projects commissioned upto 1 year
prior to date of registration of
application at IREDA.
How to Apply
Loan Application to IREDA is to be submitted in prescribed
form. The details of clearances / documents required for
consideration of loan sanction are specified in the application
form. The application form is available free of cost and may
also be downloaded from IREDA’s website
www.iredaltd.com .
WHAT IS PROJECT FINANCE?
Project finance is the term used to describe a structure in

which the only security for a loan is the project itself. In
other words, the owner of the project company is not
personally, or corporately, liable for the loan. In a project
finance deal, no guarantee is given that the loan will be
repaid; however, if the loan is not repaid, the investor can
seize the project and run or sell it in order to extract cash.
This process as rather like a giant property mortgage, since

if a home owner does not repay the mortgage on time, the
house may be repossessed and sold by the lender.
Therefore, the financing of a project requires careful
consideration of all the different aspects, as well as the
associated legal and commercial arrangements. Before
investment, any project finance lender will want to know if
there is any risk that repayment will not be made over the
loan term.

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DEAL STRUCTURE
A typical, simple project finance deal will be arranged

through a special purpose vehicle (SPV) company. The SPV is
called 'Wind Farm Ltd' in Figure 3.1. This would be a
separate legal entity which may be owned by one company,
consisting of several separate entities or a joint venture.
One bank may act alone if the project is very small, but will
usually arrange a lending syndicate – this means that a
group of banks will join together to provide the finance,
usually with one bank as the ‘lead arranger’ of the deal. This
is shown in Figure 3.1, where Bank A syndicates the loan to
Banks B, C and D.
Figure 3.1: Typical Wind Farm Finance Structure
Source: Garrad Hassan

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A considerable amount of work is carried out before the loan

is agreed, to check that the project is well planned and that
it can actually make the necessary repayments by the
required date. This process is called 'due diligence' and there
is usually separate commercial, technical and legal due
diligence carried out on behalf of the bank. The investors will
make careful consideration of technical, financial and
political risks, as well as considering how investment in a
project fits in with the bank’s own investment strategy.
TYPICAL DEAL PARAMETERS
Generally, a bank will not lend 100 per cent of the project
value and will expect to see a cash contribution from the
borrower – this is usually referred to as ‘equity’. It is typical
to see 25 to 30 per cent equity, and 70 to 75 per cent loan
(money provided by the bank as their investment).
Occasionally, a loan of 80 per cent is possible.
The size of the loan depends on the expected project

revenue, although it is typical for investors to take a cautious
approach and to assume that the long-term income will be
lower than assumed for normal operation. This ensures that
the loan does not immediately run into problems in a year
with poor wind conditions or other technical problems, and
also takes into account the uncertainty associated with
income prediction.
Typically, a bank will base the financial model on the

‘exceedance cases’ provided within the energy assessment
for the project. The mean estimated production of the
project (P50) may be used to decide on the size of the loan,
or in some cases a value lower than the mean (for example
P75 or P90). This depends on the level of additional cash
cushioning that is available to cover costs and production
variation over and above the money that is needed to make

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the debt payments. This is called the debt service cover ratio
(DSCR) and is the ratio of cash available at the payment date
to the debt service costs at that date. For example, if €1.4
million is available to make a debt payment (repayment and
interest) of €1 million, the DSCR is 1.4:1.
The energy assumptions used for the financial model and

associated DSCR are always a matter of negotiation with the
bank as part of the loan agreement. Some banks will take a
very cautious approach to the assumed energy production,
with a low DCSR and some will assume a more uncertain
energy case, but with a high DSCR and sufficient cash
cushioning to cover potential production variation.
The loan is often divided into two parts: a construction loan

and a term loan. The construction loan provides funds for the
construction of the project and becomes a term loan after
completion. At the ‘conversion’ from a construction into a
term loan, the terms and conditions associated with the loan
change, as does the pricing of the debt. The term loan is
usually less expensive than the construction loan as the risks
are lower during operation.
Typically, the length of a loan is between 10 and 15 years,

but loan terms have become longer as banks have become
more experienced in the wind industry.
The interest rate is often 1-1.5 per cent above the base rate
at which the bank borrows their own funds (referred to as
the interbank offer rate). In addition, banks usually charge a
loan set-up fee of around 1 per cent of the loan cost, and
they can make extra money by offering administrative and
account services associated with the loan. Products to fix
interest rates or foreign exchange rates are often sold to the
project owner.

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It is also typical for investors to have a series of

requirements over the loan period; these are referred to as
‘financial covenants’. These requirements are often the
result of the due diligence and are listed within the
‘financing agreement’. Typical covenants include the regular
provision of information about operational and financial
reporting, insurance coverage and management of project
bank accounts.
EXPERIENCE
In the last two decades, no wind industry project has ever

had to be repossessed, although industry and project events
have triggered some restructuring to adjust financing in
difficult circumstances. The project finance mechanism has
therefore served the industry and the banking community
well. A decade ago, developers might have struggled to find
a bank ready to loan to a project, whereas today banks often
pursue developers to solicit their loan requirements. Clearly,
this has improved the deals available to wind farm owners.

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THE ECONOMICS OF WIND POWER
Generating electricity from the wind makes environmental

sense. The wind is a clean and renewable fuel that will never
run out. It can also make economic sense. Although a wind
energy system requires a large initial capital outlay, the wind
itself is free. Hence, a turbine can generate electricity for
years with no fuel costs while the costs of other sources of
energy may escalate.
After the initial cost of a turbine is paid off, the only on-going
cost is maintenance; the fuel is free. How long do wind
turbines take to pay for themselves? The answer to this
question depends on a lot of factors, such as how often the
wind blows, how much money homeowners can save by
generating their own electricity, and how much a
commercial wind farm can sell their energy for.
Trends suggest that wind power, which is already cost

competitive in windy areas, is likely to become even more
cost effective over time. For one thing, the cost of producing
electricity from fossil fuels is likely to increase, causing utility
rates to rise. In addition, the technology associated with
manufacturing turbines and generating wind power is likely
to become less expensive.
The economics of wind power can vary significantly. Many

websites give visitors access to specialized calculators for
computing the cost of operating a specific turbine. That
said, rough estimates for the current cost of generating
electricity from wind power are:
Residential Wind Turbine - About 10 cents per kilowatt-

hour
Commercial Wind Turbine - About 4 cents per kilowatt-
hour
A kilowatt-hour is the amount of energy it takes to power ten

100 watt light bulbs for an hour. For owners of residential

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turbines, the main number to compare this with is the

amount that UPPCO charges for a kilowatt-hour, which is
about 11 cents.
For commercial generators of wind power, the main number

to compare this with is the amount that they can sell their
electricity for, which depends on the contract they
negotiate. When the operators of a wind farm negotiate
their contract as part of a Green Energy program or in
conjunction with customers who guarantee to pay a certain
amount, they can receive enough to make a profit. Other
incentives, such as renewable energy production tax credits
can add to that profit margin. As another point of
comparison, coal-fired power plants can produce electricity
for about 3 cents per kilowatt-hour.
Three Main Factors Affecting Costs
With wind energy, the fuel is free. The cost of generating

electricity from wind is primarily affected by three factors:
installation costs, operation and maintenance costs, and the
windiness of the site.
A. Installation Costs
The installation costs include the purchase price of the

complete system (including tower, wiring, utility
interconnection or battery storage equipment, power
conditioning unit, etc.) plus delivery and installation charges
and professional fees.
• A grid-connected residential-scale system (1-10 kW)

generally costs between $2,400 and $3,000 per
installed kilowatt.
• Commercial turbines (larger than 500 kW) cost in the

range of $1,000 to $2,500 per kilowatt, with the lowest
costs achieved when large multiple units are installed

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at one location.
In general, capital costs represent between 75% and 90% of

the total cost.
B. Operation and maintenance costs
Operating expenses are incurred over the lifetime of the

wind system. Operating costs include maintenance and
service, insurance, and any applicable taxes. Once the
project has been paid for, the only costs are operation and
maintenance costs. A rule of estimation for annual operating
expenses is 1.5% to 2.5% of the initial system cost. Another
estimate is based on the system's energy production and is
equivalent 1 to 2 cents per kW-hr of output.
C. Windiness of the site
Wind turbines obviously yield more energy in places with lots

of wind, with the average strength of the wind being a key
parameter. Therefore, in evaluating the actual output of a
wind turbine, one has to take into account the capacity
factor, which is the ratio of average power output to the
rated power of the turbine. Based on the wind potential map
for the local area, a conservative estimate of the capacity
factor for wind turbines in the western UP would be in the
range 0.15-0.25.
Calculations
To determine the cost per kW-hr for electricity generated by

a wind turbine, one first estimates the wind turbines total
annual costs and the turbine's annual energy output. Then

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one can estimate the cost per kilowatt-hour as:
Cost Per kW-hr = Annual Cost/Annual Energy Output
For illustrative purposes, consider the total initial cost of a 5

kW residential system and a 500 kW commercial system.
A. Total Annual Cost
The total annual cost will be the initial cost of the turbine
spread out over the lifetime of the turbine plus the annual
operating expenses.
Initial costs: The initial cost is inclusive of all expenses to

evaluate, buy, install and start-up a wind system.
Residential 5 kW system = $15,000

Commercial 600 kW system = $800,000
Operation and maintenance costs: Annual operating costs

are estimated as 2% of initial capital cost. For the two wind
system examples, the annual operating costs are:
Residential 2% x $15,000 = $300

Commercial 2% x $800,000 = $16,000
Total annual costs over expected lifetime: To compute

annual cost of the wind turbines.
Annual Cost = (Initial Cost/Expected Life) + Annual

Operating Costs
Wind turbine manufacturers estimate a useful life of

between 20 and 30 years for their product. Using 30 years as
expected lifetime:
Residential ($15,000/30) + $300 = $800 per year

Commercial ($800,000/30) + $16,000 = $42,667 per year

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B. Cost Per Kilowatt Hour
The cost per kilowatt-hour will be:
Cost Per kWh = Annual Cost/Annual Energy Output
Annual energy output. The annual energy output will

depend on the windiness of the site as represented by a
capacity factor. Based on the average wind speed in UP, a
conservative estimate of the wind turbine capacity factor will
be 0.18 for the residential system and 0.20 for the
commercial system. Therefore, the annual energy outputs of
the two systems would be:
Residential 5kw x 0.18 x 24 x 365 = 7,884 kilowatt-hrs

Commercial 600kw x 0.20 x 24 x 365 = 1,051,200 kilowatt-
hrs
And, therefore, the cost per kilowatt-hr of the two systems

are:
Residential $800/7,884 kwh = $0.10 per kilowatt-hr

Commercial $42,667/1,051,200 kwh = $0.04 per kilowatt-hr
Other Economic Factors
A more accurate cost per kilowatt-hour calculation requires

that one also take into account many details, including:
• Interest paid on borrowed money

• Insurance
• Utility buy-back

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• State and federal tax benefits
• Wind turbine resale value

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Trends Influencing the Costs of Wind Power
In recent years, three major trends have dominated the

development of grid-connected wind turbines:
• Turbines have become larger and

taller – the average size of turbines sold
on the market has increased
substantially;
• The efficiency of turbine production
has increased steadily; and
• In general, the investment costs
per kW have decreased, although there
has been a deviation from this trend in
recent years.
Figure 1.3 shows the development of the average-sized

wind turbine for a number of the most important wind power
countries. It can be observed that the annual average size
has increased significantly over the last 10-15 years, from
approximately 200 kW in 1990 to 2 MW in 2007 in the UK,
with Germany, Spain and the US not far behind.
As shown, there is a significant difference between some

countries: in India, the average installed size in 2007 was
around 1 MW, considerably lower than levels in the UK and
Germany (2,049 kW and 1,879 kW, respectively). The
unstable picture for Denmark in recent years is due to the
low level of turbine installations.
Figure 1.3: Development of the Average Wind Turbine

Size Sold in Different Countries

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Source: BTM-consult
In 2007, turbines of the MW-class (with a capacity of over 1

MW) had a market share of more than 95 per cent, leaving
less than 5 per cent for the smaller machines. Within the
MW-segment, turbines with capacities of 2.5 MW and
upwards are becoming increasingly important, even for on-
land sites. In 2007, the market share of these large turbines
was 6 per cent, compared to only 0.3 per cent at the end of
2003.
The wind regime at the chosen site, the turbine hub height
and the efficiency of production determine power production
from the turbines. So just increasing the height of turbines
has resulted in higher power production. Similarly, the
methods for measuring and evaluating the wind speed at a
given site have improved substantially in recent years and
thus improved the site selection for new turbines. However,
the fast development of wind power capacity in countries
such as Germany and Denmark implies that, by now, the
best wind sites in these countries have been taken and that
new on-land turbine capacity will have to be erected at sites

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with a marginally lower average wind speed. The

replacement of older and smaller turbines with modern
versions is also becoming increasingly important, especially
in countries which have been involved in wind power
development for a long time, as is the case for Germany and
Denmark.
The development of electricity production efficiency, owing

to better equipment design, measured as annual energy
production per square metre of swept rotor area (kWh/m2)
at a specific reference site, has correspondingly improved
significantly in recent years. With improved equipment
efficiency, improved turbine siting and higher hub height,
the overall production efficiency has increased by 2-3 per
cent annually over the last 15 years.
Figure 1.4 shows how these trends have affected

investment costs, exemplified by the case of Denmark, from
1987 to 2006. The data reflects turbines installed in the
particular year shown (all costs are converted to 2006
prices); all costs on the right axis are calculated per square
metre of swept rotor area, while those on the left axis are
calculated per kW of rated capacity.
The number of square metres covered by the turbine’s rotor

– the swept rotor area - is a good indicator of the turbine’s
power production, so this measure is a relevant index for the
development in costs per kWh. As shown in Figure 1.4, there
was a substantial decline in costs per unit of swept rotor
area in the period under consideration, except during 2006.
So from the late 1990s until 2004, overall investments per
unit of swept rotor area declined by more than 2 per cent
per annum, corresponding to a total reduction in cost of
almost 30 per cent over these 15 years. But this trend was

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broken in 2006, when total investment costs rose by

approximately 20 per cent compared to 2004, mainly due to
a significant increase in demand for wind turbines, combined
with rising commodity prices and supply constraints.
Looking at the cost per rated capacity (per kW), the same
decline is found in the period 1989 to 2004, with the
exception of the 1,000 kW machine in 2001. The cause is
related to the size of this specific turbine: with higher hub
height and larger rotor diameter, the turbine is equipped
with a slightly smaller generator, although it produces more
electricity. This fact is particularly important when analysing
turbines built specifically for low and medium wind areas,
where the rotor diameter is considerably larger in
comparison to the rated capacity. As shown in Figure 1.4,
the cost per kW installed also rose by 20 per cent in 2006
compared to 2004.
Figure 1.4: The Development of Investment Costs

from 1989 to 2006, Illustrated by the Case of
Denmark.

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Note: Right axis: Investment costs divided by swept rotor

area (€/m2 in constant 2006 €). Left axis: Wind turbine
capital costs (ex-works) and other costs per kW rated power
(€/kW in constant 2006 €).
In addition, the share of other costs as a percentage of total

costs has generally decreased. In 1989, almost 29 per cent
of total investment costs were related to costs other than
the turbine itself. By 1997, this share had declined to
approximately 20 per cent. This trend towards lower
auxiliary costs continues for the last turbine model shown
(2,000 kW), where other costs amount to approximately 18
per cent of total costs. But from 2004 to 2006 other costs
rose almost in parallel with the cost of the turbine itself.
The recent increase in turbine prices is a global

phenomenon, which stems mainly from a strong and
increasing demand for wind power in many countries, along
with constraints on the supply side (not only related to

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turbine manufacturers but also resulting from a deficit in

sub-supplier production capacity of wind turbine
components). The general price increases for newly installed
wind turbines in a number of selected countries are shown in
Figure 1.5. There are significant differences between
individual countries, with price increases ranging from
almost none to a rise of more than 40 per cent in the US and
Canada.
Figure 1.5: The Increase in Turbine Prices from 2004

to 2006 for a Selected Number of Countries
Note: Preliminary dat
a shows that prices for new turbines might continue to rise

during 2007.
Source: IEA (2007)
Operation and Maintenance Costs of Wind Generated

Power
Operation and maintenance (O&M) costs constitute a

sizeable share of the total annual costs of a wind turbine. For
a new turbine, O&M costs may easily make up 20-25 per

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cent of the total levelised cost per kWh produced over the
lifetime of the turbine. If the turbine is fairly new, the share
may only be 10-15 per cent, but this may increase to at least
20-35 per cent by the end of the turbine’s lifetime. As a
result, O&M costs are attracting greater attention, as
manufacturers attempt to lower these costs significantly by
developing new turbine designs that require fewer regular
service visits and less turbine downtime.
O&M costs are related to a limited number of cost

components, including:
• Insurance;
• Regular maintenance;
• Repair;
• Spare parts, and
• Administration.
Some of these cost components can be estimated relatively

easily. For insurance and regular maintenance, it is possible
to obtain standard contracts covering a considerable share
of the wind turbine’s total lifetime. Conversely, costs for
repair and related spare parts are much more difficult to
predict. And although all cost components tend to increase
as the turbine gets older, costs for repair and spare parts are
particularly influenced by turbine age; starting low and
increasing over time.
Due to the relative infancy of the wind energy industry, there

are only a few turbines that have reached their life
expectancy of 20 years. These turbines are much smaller
than those currently available on the market. Estimates of
O&M costs are still highly unpredictable, especially around
the end of a turbine’s lifetime; nevertheless a certain
amount of experience can be drawn from existing, older
turbines.

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Based on experiences in Germany, Spain, the UK and

Denmark, O&M costs are generally estimated to be around
1.2 to 1.5 eurocents (c€) per kWh of wind power produced,
over the total lifetime of a turbine. Spanish data indicates
that less than 60 per cent of this amount goes strictly to the
O&M of the turbine and installations, with the rest equally
distributed between labour costs and spare parts. The
remaining 40 per cent is split equally between insurance,
land rental and overheads.
Figure 1.6, shows how total O&M costs for the period
between 1997 and 2001 were split into six different
categories, based on German data from DEWI. Expenses
pertaining to buying power from the grid and land rental (as
in Spain) are included in the O&M costs calculated for
Germany. For the first two years of its lifetime, a turbine is
usually covered by the manufacturer’s warranty, so in the
German study O&M costs made up a small percentage (2-3
per cent) of total investment costs for these two years,
corresponding to approximately 0.3-0.4 c€ /kWh. After six
years, the total O&M costs increased, constituting slightly
less than 5 per cent of total investment costs, which is
equivalent to around 0.6-0.7 c€/kWh. These figures are fairly
similar to the O&M costs calculated for newer Danish
turbines (see below).
Figure 1.6: Different Categories of O&M costs for

German Turbines, as an Average over the Time Period
1997-2001.

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Source: DEWI.
Figure 1.7 shows the total O&M costs resulting from a Danish
study, and how these are distributed between the different
O&M categories, depending on the type, size and age of the
turbine. For a three-year-old 600 kW machine, which was
fairly well represented in the study, approximately 35 per
cent of total O&M costs covered insurance, 28 per cent
regular servicing, 11 per cent administration, 12 per cent
repairs and spare parts, and 14 per cent for other purposes.
In general, the study revealed that expenses for insurance,
regular servicing and administration were fairly stable over
time, while the costs for repairs and spare parts fluctuated
considerably. In most cases, other costs were of minor
importance.
Figure 1.7: O&M Costs as Reported for Selected Types

and Ages of Turbines

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Source: Jensen et al. (2002)
Figure 1.7 also shows the trend towards lower O&M costs for
new and larger machines. So for a three year old turbine, the
O&M costs decreased from around 3.5 c€/kWh; for the old 55
kW turbines to less than 1 c€/kWh for the newer 600 kW
machines. The figures for the 150 kW turbines are similar to
the O&M costs identified in the three countries mentioned
above. Moreover, Figure 1.7 shows clearly that O&M costs
increase with the age of the turbine.
With regard to the future development of O&M costs, care

must be taken in interpreting the results of Figure 1.7.
Firstly, as wind turbines exhibit economies of scale in terms
of declining investment costs per kW with increasing turbine
capacity, similar economies of scale may exist for O&M
costs. This means that a decrease in O&M costs will be
related, to a certain extent, to turbine up-scaling. And
second, the newer and larger turbines are better aligned

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with dimensioning criteria than older models, implying

reduced lifetime O&M requirements. However, this may also
have the adverse effect that these newer turbines will not
stand up as effectively to unexpected events.
The Cost of Energy Generated by Wind Power
The total cost per kWh produced (unit cost) is calculated by

discounting and levelising investment and O&M costs over
the lifetime of the turbine, and then dividing them by the
annual electricity production. The unit cost of generation is
thus calculated as an average cost over the turbine’s
lifetime. In reality, actual costs will be lower than the
calculated average at the beginning of the turbine’s life, due
to low O&M costs, and will increase over the period of
turbine use.
The turbine’s power production is the single most important

factor for the cost per unit of power generated. The
profitability of a turbine depends largely on whether it is
sited at a good wind location. In this section, the cost of
energy produced by wind power will be calculated according
to a number of basic assumptions. Due to the importance of
the turbine’s power production, the sensitivity analysis will
be applied to this parameter. Other assumptions include the
following:
• Calculations relate to new land-based,

medium-sized turbines (1.5-2 MW) that could
be erected today;
• Investment costs reflect the range given
in Chapter 2 - that is, a cost per kW of 1,100-
1,400 €/kW, with an average of 1,225 €/kW.
These costs are based on data from IEA and
stated in 2006 prices;
• O&M costs are assumed to be 1.45
c€/kWh as an average over the lifetime of the
turbine;

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• The lifetime of the turbine is set at 20

years, in accordance with most technical
design criteria;
• The discount rate is assumed to range
from 5-10 per cent per annum; in the basic
calculations, a discount rate of 7.5 per cent
per annum is used, although a sensitivity
analysis of the importance of this interest
range is also performed; and
• Economic analyses are carried out on a
simple national economic basis. Taxes,
depreciation and risk premiums are not taken
into account and all calculations are based on
fixed 2006 prices.
The calculated costs per kWh of wind-generated power, as a

function of the wind regime at the chosen sites, are shown in
Figure 1.8. As illustrated, the costs range from
approximately 7-10 c€/kWh at sites with low average wind
speeds, to approximately 5-6.5 c€/kWh at windy coastal
sites, with an average of approximately 7c€/kWh at a wind
site with average wind speeds.
In Europe, the good coastal positions are located mainly on

the coasts of the UK, Ireland, France, Denmark and Norway.
Medium wind areas are mostly found inland in mid and
southern Europe - in Germany, France, Spain, Holland and
Italy - and also in Northern Europe - in Sweden, Finland and
Denmark. In many cases, local conditions significantly
influence the average wind speeds at a specific site, so
significant fluctuations in the wind regime are to be
expected even for neighboring areas.

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Figure 1.8: Calculated Costs per kWh of Wind-

Generated Power as a Function of the Wind Regime at
the Chosen Site (Number of Full Load Hours)
Note: In this figure, the number of full load hours is used to

represent the wind regime. Full load hours are calculated as
the turbine’s average annual production divided by its rated
power. The higher the number of full load hours, the higher
the wind turbine’s production at the chosen site.
Source: Risø
Approximately 75-80 per cent of total power production

costs for a wind turbine are related to capital costs - that is,
the costs of the turbine, foundations, electrical equipment
and grid connection. Thus a wind turbine is capital intensive
compared with conventional fossil fuel-fired technologies,
such as natural gas power plants, where as much as 40-60
per cent of total costs are related to fuel and O&M costs. For
this reason, the costs of capital (discount or interest rate)
are an important factor for the cost of wind generated
power, a factor which varies considerably between the EU
member countries.

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In Figure 1.9, the costs per kWh of wind-produced power are

shown as a function of the wind regime and the discount
rate (which varies between 5 and 10 per cent per annum).
Figure 1.9: The Costs of Wind-Produced Power as a

Function of Wind Speed (Number of Full Load Hours)
and Discount Rate; the Installed Cost of Wind
Turbines is Assumed to be 1,225 €/kW

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Source: Risø
As illustrated in Figure 1.9, the costs ranges between around

6 and 8 c€/kWh at medium wind positions, indicating that a
doubling of the interest rate induces an increase in
production costs of 2 c€/kWh. In low wind areas, the costs
are significantly higher, at around 8-11 c€/kWh, while the
production costs range between 5 and 7 c€/kWh in coastal
areas.
Development of the Cost of Wind-Generated Power
The rapid European and global development of wind power

capacity has had a strong influence on the cost of wind
power over the last 20 years. To illustrate the trend towards
lower production costs of wind-generated power, a case that
shows the production costs for different sizes and models of
turbines is presented in Figure 1.10. Due to limited data, the

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trend curve has only been constructed for Denmark,

although a similar trend (at a slightly slower pace) was
observed in Germany.
Figure 1.10 shows the calculated unit cost for different sizes
of turbines, based on the same assumptions used in the
previous section: a 20-year lifetime is assumed for all
turbines in the analysis and a real discount rate of 7.5 per
annum is used. All costs are converted into constant 2006
prices. Turbine electricity production is estimated for two
wind regimes - a coastal and an inland medium wind
position.
The starting point for the analysis is the 95 kW machine,

which was installed mainly in Denmark during the mid
1980s. This is followed by successively newer turbines (150
kW, 225 kW), ending with the 2000 kW turbine, which was
typically installed from around 2003 onwards. It should be
noted that wind turbine manufacturers generally expect the
production cost of wind power to decline by 3-5 per cent for
each new turbine generation they add to their product
portfolio. The calculations are performed for the total lifetime
(20 years) of the turbines; calculations for the old turbines
are based on track records of more than 15 years (average
figures), while newer turbines may have a track record of
only a few years, so the newer the turbine, the less accurate
the calculations.
Figure 1.10: Total Wind Energy Costs per Unit of

Electricity Produced, by Turbine Size (c€/kWh,
constant 2006 prices).

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Source: Risø
The economic consequences of the trend towards larger

turbines and improved cost-effectiveness are clearly shown
in Figure 10. For a coastal position, for example, the average
cost has decreased from around 9.2 c€ /kWh for the 95 kW
turbine (mainly installed in the mid 1980s), to around 5.3
c€ /kWh for a fairly new 2,000 kW machine, an improvement
of more than 40 per cent over 20 years (constant 2006
prices).
Future Evolution of the Costs of Wind-Generated

Power
In this section, the future development of the economics of

wind power is illustrated by the use of the experience curve
methodology. The experience curve approach was
developed in the 1970s by the Boston Consulting Group; it
relates the cumulative quantitative development of a

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product to the development of the specific costs (Johnson,

1984). Thus, if the cumulative sale of a product doubles, the
estimated learning rate gives the achieved reduction in
specific product costs.
The experience curve is not a forecasting tool based on

estimated relationships. It merely shows that if the existing
trends continue in the future, the proposed development
may be seen. It converts the effect of mass production into
an effect upon production costs, without taking other causal
relationships into account. Thus changes in market
development and/or technological breakthroughs within the
field may change the picture considerably, as would
fluctuations in commodity prices such as those for steel and
copper.
Different experience curves have been estimated for a

number of projects. Unfortunately, different specifications
were used, which means that not all of these projects can be
directly compared. To obtain the full value of the
experiences gained, the reduction in price of the turbine
(€/KW-specification) should be taken into account, as well as
improvements in the efficiency of the turbine’s production
(which requires the use of an energy specification (€/kWh),
see Neij et al. 2003). Thus, using the specific costs of energy
as a basis (costs per kWh produced), the estimated progress
ratios range from 0.83 to 0.91, corresponding to learning
rates of 0.17 to 0.09. So when the total installed capacity of
wind power doubles, the costs per kWh produced for new
turbines goes down by between 9 and 17 per cent. In this
way, both the efficiency improvements and embodied and
disembodied cost reductions are taken into account in the
analysis.
Wind power capacity has developed very rapidly in recent

years, on average by 25-30 per cent per year over the last
ten years. At present, the total wind power capacity doubles
approximately every three to four years. Figure 1.11 shows
the consequences for wind power production costs, based on
the following assumptions:

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• The present price-relation should be

retained until 2010; the reason why no price
reductions are foreseen in this period is due
to a persistently high demand for new wind
turbine capacity, and sub-supplier constraints
in the delivery of turbine components;
• From 2010 until 2015, a learning rate of
10 per cent is assumed, implying that each
time the total installed capacity doubles, the
costs per kWh of wind generated power
decrease by 10 per cent; and
• The growth rate of installed capacity is
assumed to double cumulative installations
every three years.

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State-wise Wind Power Installed Capacity In India

Growth of Wind Power Installed Capacity
State As on 31.03.2006 As on
(As on 31.03.2007
31.03.2008) Additi Additi 2
on on 0
during during 0
T
State Year-wise Installed Capacity Addition (MW)2007-
2006- 8 Total
C
07 08 -
0
Upto Mar’01 2001-02 2002-03 2003-04 2004-05 2005-06 2006- 9 2007-08 Capacity
07 (MW)
Demons Privat Total Demons- Privat Total (MW) (MW) (MW) (
Andhra Pradesh - 91.790 e Capaci
1.500 -tration e
6.000 Capa
25.850 0.900 0.800 till - M 126.840
tration Sector ty Projects Sector city 30.11. W
Project Projec (MW) (MW) Projec (MW) 08 )
Gujarat s 164.905ts 8.650 7.150 ts
29.275 51.175 84.600 328.950 580.130 1254.835
(MW) (MW) (MW)
Karnataka
Andhra Pradesh 50.650
5.4 115.6 22.500
121.0 52.460
7.80081.430
113.54200.400
121.3 170.930
0.8 264.750
0.0 187.000
0.0 1030.120
4
Kerala 2.350 - - - - - - 8.700 11.050

Gujarat 17.3 320.8 338.1 17.840 656.52 674.3 328.9 580.13 179.80 1432.71
Madhya Pradesh 21.690 - - - 6
6.250 11.200 17.450 69.250 125.840
Maharasthra
Karnataka 198.060
7.1 577.5196.545
584.6 2.000
7.075 6.250
837.95 48.750
845.0 545.100
264.7 483.600
187.0 276.075
173.10 1756.380
1184.45
2
Rajasthan 9.110 8.380 44.440 129.580 93.860 74.525 111.750 70.450 542.095
Kerala 2.0 0.0 2.0 2.125 0.23 2.35 0.0 8.7 12.50 23.00
Tamil Nadu 806.860 46.960 132.905 355.145 688.330 860.655 564.960 391.900 3847.715
Madhya Pradesh 0.6 39.7 40.3 0.590 56.00 56.59 17.4 69.25 0.00 187.69
West Bengal 1.000 - - - - 0.250 0.500 - 1.750
Maharashtra 8.4 992.9 1001.3 8.980 1471.3 1480. 483.6 276.07 82.00 1837.85
Others 1.300 - - - - - - - 1.300
3 5
TOTAL (MW) 1347.715 284.535 238.955 607.680 1114.615 1748.160 1772.760 1583.505 8697.9
Rajasthan 6.4 351.7 358.1 6.350 465.65 471.9 111.7 70.45 132.20 670.97
9
Tamil Nadu 19.4 2873.1 2892.5 19.355 3440.1 3459. 565 391.90 250.30 4132.72
4
West Bengal 1.1 0.0 1.1 1.750 0.0 1.75 0.5 0.0 0.00 1.10
Others 1.6 0.0 1.6 1.6 0.0 1.6 0.0 0.0 0.00 3.20
Total (All India) 69.6 5271.0 5340.6 73.165 7041.2 7114. 1773 1583.5 829.90 9587.14
6 0

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Graph showing Year-Wise Installed Capacity(MW) in

INDIA

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CENTRAL INCENTIVES
A. Indirect Taxes
I. Custom Duty for Wind Energy Equipments and
Components (Notofication No.21/2002-custom
dated 01.03.2002, as amended by Notification
No.11/2006 –customs dated 01.03.2006)
Rat
Description of Goods
e
i) Wind operated electricity generators upto 30
5
kW and wind operated battery chargers upto 30
%
kW
ii) Parts of wind operated electricity generators
for manufacturer/maintenance of wind operated
electricity generators, namely :
5
a) Special bearing %
b) Gear Box 5
c) Yaw components %
d) Wind turbine controllers 5
e) Parts of the goods specified at (a) to (d) %
above 5
f) Sensors %
g) Brake hydraulics 5
h) Flexible coupling %
i) Brake calipers 25
%
25
%
25
%
25

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%
iii) Blades for rotor of wind operated electricity 5
generators for the %
manufacturers/maintenanceof wind operated
electricity generators.
iv) Parts for the manufacturer/maintenance of 5
blades for rotor of wind operated electricity %
generation
v) Raw materials for manufacturer of blades for 5
rotor of wind operated electricity generators %
Conditions :
(a) If the importer at the time of importation
furnishes in all cases, a certificate to the Dy.
Commissioner of Customs or Assistant Commissioner
of Customs as the case may be, from an officer not
below the rank of Deputy Secretary to the
Government of India in the Ministry of Non-
Conventional Energy Sources recommending the
grant of this exemption and in the case of the goods
at (ii) to (v) the said officer certifies that the goods
are required for the specified purposes; and
(b) Furnishes an undertaking to the said Dy.
Commissioner of Customs Assistant Commissioner to
the effect that -
(i) in the case of wind operated electricity generators
upto 30 kW, or wind operated battery chargers
upto 30 kW, he shall not sell or otherwise dispose
off, in any manner, such generators or chargers
for a period of two years from the date of
importation.
(ii) in case of other goods specified at (ii) to (v), he
shall use them for the specified purpose, and
(iii) in case he fails to comply with sub-conditions (i)
or (ii), or both conditions, as the case may be, he
shall pay an amount equal to the difference
between the duty leviable on the imported goods
but for the exemption under this notification and

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that already paid at the time of importation.
II. Excise Duty [Notification No.6/2002 dated

01/03/2002 (S.No.237 non-conventional
devices/systems)(Notification No.6/2006 C.E. Dated
01/03/2006)]
Devices/Systems exepted from Excise Duty:
(i) Wind operated electricity generator, its
components and parts thereof including rotor and
wind turbine controller.
(ii) Water pumping wind mills, wind aero-generators
and battery chargers.
III. Sales Tax

Exemption/reduction in Central Sales Tax and General
Sales Tax are available on sale of renewable energy
equipment in various states.
B. Direct Taxes
1. Accelerated Depreciation benerit u/sec. 32 Rule 5 up to
80% of the project cost in the first year plus additional
depreciation @ 20% for projects being commissioned
after March 2005 with new plant & machinery.
Exemption on Income Tax on earnings from the project
2.
u/sec. 80 IA for 10 years.

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Policies Introduced / Incentives Declared by the

State Governments for
Private Sector Wind Power Projects

ITEMS STATES
Andhra Gujarat Karnatak Kerala Madhya Maharashtr Rajastha Tamil West
Pradesh a Pradesh a n Nadu Bengal
Captive Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allowed
Use
Wheeli At par with 4% of5% ofTo be2% of2% of EnergyBelow 1325% of7% of
ng convention energy energy +decided energy +as wheelingkV, 50%energy energy +
al Rs.1.15/kWby SERC transmissi + 5% as T&Dof normal open
h as cross on chargesloss. charges access
subsidy for as per ERC applicable charges
3rd party to 33 kV
sale. decelared
by
commissio
n +
Surcharge
+ Losses *
Bankin Not Allowed Not 12 Months Six 5% (12
g Allowed @2% of Allowed Months months
energy Financial
input year
April to
March)
Buy- Rs.3.50 Rs.3.50 Rs. 3.40Rs. 3.14Year wiseRs.3.50/kWh For Rs.2.90 Rs.4 per
back per kWhper kWh per kWhper kWhrates (First year ofJaisalmer, per kWh kWh
Rate without without without (Rs./kWh) commissionin Jodhpur
by SEB any (without any any from 1st tog). and Note :
escalation any escalation escalatio 20th year Barmer TNERC
for 10escalatio for 10 yrsn for 20 (escalation ofdistrict has
years asn for 20of yrs. 15 paise per Rs.3.60 propose
per APyrs.) commercia 1st Yr – year forper unitd
Govt. l operation 4.03 13yrs) for Rs.3.40
Policy 2ND Yr – injection in its
amendmen 3.86 in 33kV ordiscussio
t Date 3RD Yr – 11kV n paper.
09.09.200 3.69 system &However
8 subject 4TH Yr – Rs.3.71 , final
to approval 3.52 per unitorder is
of APERC 5TH Yr – To for yet to be
20 TH
Yr – injection issued.
3.36 in EHV

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system.
For other
district
Rs.3.78
per unit
for
injection
on 33kV
or 11 kV
system &
Rs.3.89
per unit
for
injection
in EHV
system.
Third Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allowed Allowed
Party under under under under under under under under under
Sale Electricity Electricit Electricity Electricit Electricity Electricity ActElectricity Electricit Electricit
Act 2003y ActAct 2003y ActAct 20032003 subjectAct 2003y Acty Act
subject to2003 subject to2003 subject toto regulationsubject to2003 2003
regulation subject regulation subject regulation framed byregulation subject subject
framed byto framed byto framed byrespective framed byto to
respective regulatio respective regulatio respective SERCs respective regulatio regulatio
SERCs n framedSERCs n framedSERCs SERCs n framedn framed
by by by by
respectiv respectiv respectivrespectiv
e SERCs e SERCs e SERCs e SERCs
Other Industry E.D. No No # PowerExemption
Incen- Status Exempte electricity electricity evacuation from
tives d, Duty for 5 Duty for 5 arrangement, electricity
Demand yrs yrs Approach Duty
cut 30% Road, @50%
of Electricity for 7
windfarm Duty, Loan toyears
installed cooperative
capacity societies
Penalty 10 paise10 paiseRs. 0.40 27 paise25 paise5 paise25 paise
on per kVArhper Per kVArh per kVArh per kVArh per uearper
kVArh upto 10%kVArh up w.e.f. kVArh if
consum & 25 paiseto 10% 01/04/200 the
-ption per kVArhand 20 6 withration of
above 10% paise per escalation kVArh
KVArh of 5% perdrawn to
above year KWh
10% exported
is upto
10% and

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50 paise
per
KVArh
for more
than
10%.
Source : MNRE / SNAs

Notes :
1. # Other incentives in Maharashtra are : (a) For
evacuation arrangement of wind energy project, 50%
amount will be given as a subsidy through Green 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. (b) 100% expenditure for construction of
approach roads will be made through Green energy fund.
(c) No electricity duty for 5 years for captive use. (d) 11%
share capital will be provided to cooperative sector for
seting up of wind power projects as a grant through
Green energy fund.
2. * 4.5% for supply to consumer directly on EHV
systemand 8.3% for supply using distribution licensee
below 132 KV.
3. For latest and detailed information refer concerning
State Nodal Agencies / State Electicity Regulatory
Commissions.
Estimated Wind Power Potential in India
Sl. State Gross Potential

No. (MW)
1 Andhra Pradesh 8275
2 Gujarat 9675
3 Karnataka 6620
4 Kerala 875
5 Madhy Pradesh 5500

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6 Maharashtra 3650
7 Orissa 1700
8 Rajasthan 5400
9 Tamil Nadu 3050
10 West Bengal 450
Total 45195
Note :Gross potential is based on assuming 1% of land

availability for wind power generation in potential areas.
(Source : MNRE (Erstwhile MNES))
Abstract of wind monitoring Stations in India

(As on 31st March, 2008)
Total No. of Stations with
Sl. State / Stations Stations Annual Avg.
No Union in WPD > 200 W/m2
. Territory Establis operatio at 50 m
hed n height
1 Andaman & 14 2 1
Nicobar
2 Andhra 65 4 35
Pradesh
3 Arunachal 9 0 -
Pradesh

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4 Assam 8 1 -
5 Chhattisgar 3 - -
h
6 Goa 1 - -
7 Gujarat 62 3 38
8 Haryana 7 1 -
9 Himachal 10 1 -
Pradesh
10 Jammu & 9 2 -
Kashmir
11 Jharkhand 2 - -
12 Karnataka :
MNES 50 14 21
Stations 19 - 8
KPCL
Stations
13 Kerala 27 2 16
14 Lakshadwee 10 - 8
p
15 Madhya 36 6 7
Pradesh
16 Maharashtr 91 4 32
a
17 Manipur 5 1 -
18 Mizoram 5 - -

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19 Orissa 11 - 6
20 Punjab 11 - -
21 Pondichery 4 - -
22 Rajasthan 38 - 7
23 Sikkim 3 - -
24 Tamil Nadu 67 3 44
25 Tripura 3 - -
26 Uttaranchal 11 - 1
27 Uttar 7 4 -
Pradesh
28 West 10 - 1
Bengal
Total 598 48 225

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State-wise List of Wind Monitoring Stations

for which Micro Survey has been done
(As on 31.03.2008)
Sl.
Station
No.
Andhra Pradesh
1 Bhimunipatnam, Dist.Vishakapatnam
2 Jamalamadugu, Dist.Cuddapah
3 Kadavakallu, Dist.Ananthapur
4 Kondamithipalle, Dist.Kurnool
5 M.P.R. Dam, Dist.Ananthapur
6 Nallakonda, Dist.Ananthapur
7 Nazirabad, Dist.Rangareddy
8 Pampanoorthanda, Dist.Ananthapur
9 Ramagiri, Dist.Ananthapur
10 Thirumalaypalli, Dist.Cuddapah
11 Vajrakarur, Dist.Ananthapur
Gujarat
12 Amrapar, Dist.Junagadh
13 Bamanbore II, Dist.Rajkot
14 Bhandariya, Dist.Bhavnagar
15 Dhank, Dist.Rajkot

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16 Gala, Dist. Jamnagar

17 Godladhar, Dist. Rajkot
18 Haripar, Dist.Jamnagar
19 Jafrabad, Dist.Amreli
20 Jamanvada, Dist.Kachchh
21 Kalyanpur, Dist.Jamnagar
22 Kukma, Dist. Kachchh
23 Mahidra, Dist. Surendranagar
24 Motisindholi, Dist.Kachchh
25 Mundra, Dist. Kachchh
26 Navibandar, Dist.Junagadh
27 Okha, Dist.Jamnagar
28 Poladiya, Dist. Kachchh
29 Sanodar, Dist.Bhavnagar
30 Sinai, Dist. Kachchh
31 Surajbari, Dist. Kachchh
Karnataka
32 B.B. Hills, Dist.Chikamagalur

33 Chalamatti, Dist.Hubli
34 Chikodi, Dist.Belgaum
35 Gokak, Dist.Dharwad
36 Hanamsagar, Dist.Raichur
37 Hanumanahatti, Dist.Belgaum

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38 Horti, Dist.Bijapur
39 Jogimatti, Dist.Chitradurga
40 Kamkarhatti, Dist.Belgaum
41 Kanderayanahalli, Dist.Haveri
42 Kappatta Hills, Dist.Gadag
43 Mannikeri, Dist.Belgaum
44 Mavinhunda, Dist.Belgaum
45 Sangundi, Dist.Bijapur
46 Subramanyahalli, Dist. Bellary
Kerala
47 Kanjikode, Dist.Palakkad
48
Kulathumedu, Dist. Idduki
49 Nallasingham, Dist. Pallakad

Madhya Pradesh
50 Kukru, Dist.Betul
51 Mahuriya, Dist.Shajapur
52 Nagda, Dist. Dewas
53 Sendhwa, Dist.Khargon
54 Valiyarpani, Dist. Khargon
Maharshtra
55 Alamprabhupathar, Dist.Kolhapur

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56 Amberi, Dist.Satara
57 Bramanawel, Dist.Dhule
58 Dhalgaon, Dist.Sangli
59 Dongarwadi, Dist.Sangli
60 Gudepanchgani, Dist.Sangli
61 Kavdya Dongar, Dist.Ahmadnagar
62 Khandke, Dist.Ahmadnagar
63 Kolgaon, Dist.Ahmadnagar
64 Kotoli, Dist.Kolhapur
65 Lonavla, Dist.Pune
66 Matrewadi, Dist.Satara
67 Motha, Dist.Amravathi
68 Sautada, Dist.Beed
69 Takkarmauli, Dist.Dhule
70 Thoseghar, Dist.Satara
71 Vankusawade, Dist.Satara
72 Vijayadurg, Dist.Sindhudurg
Orissa
73 Damanjodi, Dist.Koraput
74 Puri, Dist.Puri
Rajasthan
75 Devgarh, Dist.Chittourgarh

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76 Jaisalmer, Dist.Jaisalmer
77 Phalodi, Dist.Jodhpur
Tamil Nadu
78 Achamkuttam, Dist.Thirunelveli
79 Alagiyapandiyapuram, Dist.Thirunelveli
80 Andipatti, Dist.Madurai
81 Ayikudi, Dist.Thirunelveli
82 Edayarpalayam, Dist.Coimbatore
83 Ennore, Dist.Chengelpet
84 Maivadi, Dist.Coimbatore
85 Manglapuram, Dist.Thirunelveli
86 Mettukadai, Dist.Periyar
87 Naduvakurichi, Dist.Thirunelveli
88 Onamakulam, Dist.Tuticorin
89 Ottapidaram, Dist.Tuticorin
90 Pongalur, Dist.Ciombatore
91 Pulavadi, Dist.Coimbatore
92 Pusaripatti, Dist.Coimbatore
93 Puliyamkulam, Dist.Thirunelveli
94 Sankaneri, Dist.Thirunelveli
95 Ovari, Dist.Thirunelveli
96 Vakaikulam, Dist.Tuticorin
West Bengal

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97 Gangasagar, Dist.24 Paraganas

Notes :
i. The Micro Survey reports for the above

stations are available for sale at C-WET, Chennai.
ii. State-wise estimated potential can be seen

in Directory on Indian Windpower 2008.

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SERVICE PROVIDERS
O&M Agencies
Sl. Name
No.
1 Batliboi enXco Pvt. Limited
2 Golden Non Conventional Energy Systems Pvt. Ltd.
3 Henel Engineers Pvt. Ltd
4 Hofincons Infotech & Ind.Service Ltd
5 Kalani Industries Limited
6 Kintech Systems (P) Ltd
7 M.P.Windfarms Limited
162, Maharana Pratap Nagar, Zone-II,
Bhopal - 462 011
Tel : 0755-553681, 555479 Fax : 0755-550481
E-mail : mpwl@sancharnet.in
8 Pentagon WTG Services
9 Rajee Wind Energy Services
10 RPP Windtech Services
11 R.S.Windtech Engineers (P) Ltd.
12 SANA Engineering Company
13 Sastha Engineers & Consultants
14 Simms Wind Power Services
15 Spectrum WEG Services
16 Sri Ganesh Wind Power Engineers Pvt. Ltd.
17 Star Energy Systems

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List of Private Wind farm Owners in India
10 MW and Above
As on 31.03.2008
Sl. Name of Owner Total
No. (MW)
1 DLF Limited 161.200

2 Madras Cement Ltd. 136.085
3 Enercon Windfarms Hindustan P. Ltd. 128.800
4 MSPL Limited 113.150
5 HZL 107.200
6 Essel Mining & Industries Ltd. 75.000
7 Tata Power Company Ltd. 71.150
8 Aban Loyd Chiles O. Ltd. 65.985
9 Bajaj Auto Ltd 65.200
10 Rajasthan State Mines & Mineral Ltd. 52.300
11 Jaiprakash Associates Limited 49.000
12 REI Agro Limited 46.100
13 Nuziveedu Seeds Ltd 45.850

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14 Gujarat NRE Coke Ltd 45.500

15 Patnaik Minerals Pvt Ltd 45.400
16 NEPC Micon 43.850
17 Vijayanand Roadlines Ltd 42.500
18 Ramgad Minerals & Mining Pvt. Ltd. 41.900
19 BP Energy India Pvt Ltd 40.000
20 Simran Wind Project Pvt Ltd 39.300
21 Vishal Export Overseas Ltd 39.225
22 Gangadhar Narsighdas Agrawal 38.450
23 Reliance Innoventures Pvt Ltd 37.500
24 Rajasthan Ren. Energy Corp. Ltd. 36.450
25 Gujarat Fluorochemicals Ltd. 35.100
26 Soundararaja Mills Ltd. 34.800
27 Godavat Pan Masala 33.880
28 Enercon (Windfarm) India Ltd. 33.600
29 KPR Mill Pvt. Ltd. 33.170
30 Gujarat Gardian Limited 31.600
31 Grace Infrastructure (P) Ltd. 31.000
32 KS Oil Ltd. 30.800
33 MSPL GROUP 30.000
34 Dhariwal Industries Ltd 29.950
35 Tata Finance Ltd 29.450
36 Ashok Leyland Fin. Ltd 29.175

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37 Sapthagiri Distilleries 28.500

38 Ruchi Infrastructure Ltd 28.200
39 Shree Naman Developers Limited 28.125
40 Roaring 40 28.000
41 Tamilnadu Newsprint & Paper Ltd 28.000
42 Ellora Times Ltd. 27.900
43 Mohan Breweries & Distilleries 27.150
44 Savita Chemicals Ltd 26.550
45 Shanmugavel Group 25.500
46 Best & Co. 25.000
Shraddha Construn. & PowerGen.
47 25.000
P.Ltd.
48 Indo Wind Energy Ltd 24.900
49 SREI 24.800
50 Enercon Wind Farms (Raj) Pvt. Ltd. 24.000
51 Power Finance Corp. 24.000
52 GACL 23.750
53 CEPCO Industries Pvt. Ltd. 23.575
54 Ghodawat Industries Ltd 23.500
55 Premier Fine Yarns Pvt. Ltd. 22.850
56 NEG-Micon (I) P. Ltd. 21.150
57 GI Windfarms Ltd. 21.000
58 Nishkalp Investment & Trading 20.950
59 TCS Textiles Ltd. 20.750

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60 Aarvee Denims & Exports Ltd. 20.500

61 Loyal Textile Mills Ltd 20.450
62 RCI Power Ltd 20.000
63 Sun N Sand Hotel Pvt. Ltd. 19.050
64 Jindal Alluminiam Ltd 19.040
65 Ratnamani Metals & Tubes Ltd. 19.000
66 VSL Mining Company (P) Ltd 19.000
67 Weizmann Ltd 19.000
68 Lakshmi Machine Works Ltd 18.200
69 DJ Malpani 18.150
70 CPCL 17.600
71 Suzlon Infrastructure Limited 17.500
72 Chettinad Cement Corp. 17.350
73 Arvind A Traders 16.850
74 Dalmia Cements (B) Ltd 16.525
75 Surajbari Windfarm Dev. Pvt. Ltd 16.500
76 Premier Spg & Wvg Mills Pvt. Ltd 16.250
77 Rasi Seeds (P) Ltd. 16.250
78 Taurian Iron & Steel Co. Pvt. Ltd. 16.250
79 Bannari Amman Spinning Mills Ltd. 16.200
80 Bharat Forge Ltd 15.930
81 Jayajyoti & Co. Ltd 15.700
82 Goetze (I) Finance Services Ltd 15.580
83 Apollo Tyres Ltd. 15.500

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84 Indian Petrochemicals Co. Ltd 15.315

85 MRF Ltd 15.300
86 Topaz Investments Pvt Ld 15.300
87 Aryan Coal Benification Pvt. Ltd. 15.000
88 Bharati Shipyard Ltd 15.000
89 Enercon Wind Farms Krishna Ltd. 15.000
90 GSEC 15.000
91 Minerals Enterprises Ltd. 15.000
92 MMTC Limited 15.000
93 Muthoot Fincorp Ltd. 15.000
94 Sanjay Ghodawat 15.000
95 Suma Shilp Limited 15.000
96 Manganese Ore (India) Ltd. 14.400
97 Fair Deal Supplies Pvt. Ltd. 14.260
98 Shanmugavel Mills 14.250
99 VS Lad & Sons 14.200
10
Shah Promoters & Developers 14.000
0
10
Ramco Industries Ltd. 13.900
1
10
Ambika Cotton Mills Ltd. 13.800
2
10
Prakash Industries Ltd 13.775
3

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10
C Mahendra Exports Ltd 13.750
4
10
Textool Co. Ltd 13.400
5
10
Rajapalayam Mills Ltd. 13.300
6
10
V.M. Salgaonkar & Bro Pvt. Ltd. 13.300
7
10
Y Mahabaleswarappa & Sons 13.300
8
10
Sree Narasimha Textiles Ltd. 13.200
9
11
Echjay Industries Pvt. Ltd. 13.050
0
11
Shriram City Union Fin. 13.050
1
11
Mahanagar Developers 12.800
2
11
SCM Creations 12.750
3
11
Metal Powder Co. Ltd 12.575
4
11
KRBL Limited 12.500
5
11
Tirupur Textiles Pvt. Ltd. 12.500
6
11
Shriram Investments Ltd 12.450
7

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11
Best International 12.400
8
11
Prabhu Spinning Mills (P) Ltd. 12.300
9
12
Bellary Iron Ores Pvt. Ltd. 12.250
0
12
Era Infrastructure (India) Limited 12.150
1
12
Velatal Spinning Mills Ltd 12.110
2
12
Advik-Hi-Tech Pvt. Ltd. 12.100
3
12
Ansal Properties & Infrastructure Ltd 12.000
4
12
Avinash N Bhosale 12.000
5
12
Tamilnadu Petro Products 12.000
6
12
Cheran Spinners Ltd. 11.900
7
12
Suzlon Towers & Structures Limited 11.750
8
12
Sambandam Spinning Mills 11.625
9
13
Transport Corporation of India Ltd. 11.500
0
13
Usdev International Ltd 11.330
1

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13
Bhoruka Power Co. Ltd. 11.300
2
13
Subhash Projects & Mktg 11.285
3
13
Saurashtra Fuels Pvt. Ltd. 11.250
4
13
DCW Limited 11.200
5
13
Revathi Equipment Ltd 11.150
6
13
Ruchi Soya Industries Ltd. 11.050
7
13
Walden Properties Pvt Ltd 11.050
8
13
Texmo Industries 10.840
9
14
Charisma Builders 10.800
0
14
Rajpalayam Mills 10.750
1
14
Emco Limited 10.500
2
14
Energy Infratech Pvt Ltd 10.500
3
14
Maris – Karnatka 10.500
4
14
Elecon Engineering Co. Ltd. 10.450
5

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14
Srei Infrastructure Finance Ltd. 10.400
6
14
Khatau Narbheram & Co 10.250
7
14
Kandagiri Spinning Mills 10.125
8
14
UTI Ltd. 10.125
9
15
APSRTC 10.000
0
15
Deepak Ferti.& Petrochem.Corpn Ltd. 10.000
1
15
Era Constructions India Ltd 10.000
2
15
Lanco Infratech Ltd 10.000
3
15
Nuclear Power Corpn. of India Ltd 10.000
4
15
Sri Ranganathar Industries P. Ltd. 10.000
5
3841.5
TOTAL
10
State wise Communication Address
1) A & N Islands 2) Andhra Pradesh

Superintending Engineer, Managing Director, Non-
Andaman & Nicobar Islands conventional Energy
Admn., Development
Port Blair - 744101, Corporation of Andhra

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Tel : 03192-232404, 232685 Pradesh (NEDCAP),

Fax : 233365 5-8-207/2, Pisgah Complex,
Namapalli,
Hyderabad - 500001
Tel : 040-23202391,
23203692 , 23203376
Fax : 040-23201666
Email : nedcap@ap.nic.in
3) Gujarat 4) Karnataka
Director, Managing Director,
Gujarat Energy Development Karnataka Renewable
Agency(GEDA), Energy Development Ltd.
Block No. 11 & 12, 4th Floor (KREDL),
Sector - II No.19, Maj.Gen. A.D.
Udyog Bhawan, Loganadhan INA Cross,
Gandhi Nagar - 382 017 Queens Road,
Email : info@geda.org.in Bangalore – 560 052
Tel : 080-2282220-1
Fax : 080-2257399
Email : kredl@blr.vsnl.net.in
5) Kerala 6) Lakshadweep
Director, Agency for Non- Executive Engineer (Ele.)
conventional Energy and Union Territory of
Rural Technology(ANERT),
Lakshadweep, Department
P.B.No. 1094,
Kesavadasapuram, of Electricity,
Thiruvananthapuram - Kavaratti - 682555,
695004, Tel : 04896-262127
Tel : 0471-2449854, Fax : 04896-262936,
2440121-2 262140
Fax : 0471-2449854
Email : anert@vsnl.com
7)Madhya Pradesh 8) Maharashtra
Managing Director,Madhya Director,

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Pradesh Urja Vikas Nigam Ltd. Maharashtra Energy

(MPUVN), Development Agency
B-Block, Urja Bhawan, (MEDA),
Main Road No.2., Shivaji MHADA Commercial
Nagar, Complex,
Bhopal - 426 016, S.No.191-A, Phase-I,
Tel : 0755-2553595, 2556245 Opp. Tridal
Nagar,Yerawada,
Fax : 0755-2553122 Pune - 411006
Email : uvnbhop@mp.nic.in Tel : 020-26683633,
26683634
Fax : 020-26683631
Email : meda@vsnl.com
9) Orissa 10) Rajasthan

Chairman & Chief Executive, Managing Director
Orissa Renewable Energy Rajasthan Renewable
Dev. Agency(OREDA), Energy Corporation Ltd
S-3/59, Macheshwar Industrial (RRECL)
Estate, (Formerly REDA & RSPCL)
Bhubaneshwar - 751010 E-166, Yudhisthir Marg, C-
Tel : 0674-2580660, 2480258 Scheme,
Jaipur – 302 004
Fax : 0674-2580368 Tel : 0141 – 2384055,
2384077
Fax : 0141 - 2381528
11) Tamil Nadu 12) Uttar Pradesh

Chairman & Managing Director, Non-Conventional
Director, Energy Development
Tamil Nadu Energy Dev. Agency(NEDA),
Agency(TEDA), Vibhuti Khand, Gomati
E.V.K. Sampath Maaligai, Nagar, Lucknow-226010,
5th Floor, College Road, Tel : 0522-2392942-
Chennai - 600006, 3,2392872-4

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Tel : 044-28224830, Fax : 0522-2393952,

28236592 2392072
Fax : 044-28222971
Email : teda@md4.vsnl.net.in
Chariman, Tamil Nadu

Electricity Board(TNEB),
5th Floor (east), NPKRR,
Maaligai,
500 Anna Salai, Chennai -
600002,
Tel : 044-28530167
Fax : 044-28521944
Email : cences@tnebnet.org
13) West Bengal

Director, West Bengal
Renewable Energy
Development Agency
(WBREDA),
Bikalpa Shakti Bhavn,
Plot No. J-1/10, EP&GP Block
Salt Lake Electronics
Complex, Sector-V,
Kolkata-700 091
Tel : (033) 23575038,
23575348
Fax : (033) 23575037,
23575347
Email: wbreda@cal.vsnl.net.in

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CONCLUSIONS
The nature of wind energy deals is changing. Although many

small, privately-owned projects remain, there has been a
substantial shift towards bigger, utility-owned projects. This
change brings new money to the industry, reduces
dependence on banks for initial funding and brings strong
sponsors.
Projects are growing and large-scale offshore activity is

increasing. Since banks favor larger projects, this is a very
positive change. If the general economic picture
deteriorates, this may give rise to certain misgivings
concerning project finance, in comparison to the last few
years, but political and environmental support for renewable
energy means that the funding of wind energy remains a
very attractive proposition. Obtaining financing for the large-
scale expansion of the industry will not be a problem.

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ANNEXURE-I

captive use of wind power
Installed capacity: 1.00
MW
Annexure-
Detailed Project Cost I (a)
(Rs. Lakh)
S.No Description Rate/unit Qty. or Amount
. (Rs.in Lakh) no. of
units
1 Purchase of land, land Lump sum 4.00 4
development and fencing amount acres
charges
2 Supply of WEG of 250 kW 100 4 400
capacity each
3 Packaging , handling, 1 4 4
loading , transportation,
unloading and insurance
cover till erection of
WEGs
4 Foundation and other 3 4 12
civil structures
5 Electrical and 4.5 4 18
Transformers 33 KV
6 Erection and 3 4 12

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Commissioning
7 Other project cost 25 1 25
including charges for
infrastructure
development @ Rs.25.00
Lakh per MW for 1.00
MW
8 Cost of 33 KV OHT Line ( External and 0.98
internal) 0.15 KM assumed approx. @ Rs. 6.50
lakh per KM or as actual
9 Total 475.98
Annexure-I (b) Detailed Project Cost
Installed capacity: 1.00 MW
(Rs. Lakh)
Qty. or
Rate/unit
S.No. Description no. of Amount
(Rs.Lakh)
units
Purchase of land,
Lump sum 4.00
1 land development 4.00
amount acres
and fencing charges
Supply of WEG of
2 250 kW capacity 100.00 4 400.00
each
Packaging ,
handling, loading ,
transportation,
3 1.00 4 4.00
unloading and
insurance cover till
erection of WEGs
Foundation and
4 3.00 4 12.00
other civil structures
5 Electrical and 4.50 4 18.00

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Transformers 33 KV
Erection and
6 3.00 4 12.00
Commissioning
Other project cost
including charges for
infrastructure
7 25.00 1 25.00
development @ Rs.
25.00 Lakh per MW
for 1.00 MW
Cost of 33 KV OHT
Line ( External and
internal) 0.15 KM
8 0.98
assumed approx. @
Rs. 6.50 lakh per KM
or as actual
9 Total 475.98
ANNEXURE-II

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ANNEXURE-III

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WIND POWER SECTOR IN INDIA 2010

By Vijay Chander Keesara

WIND BY VIJAY CHANDER KEESARA

National Electricity Policy

WIND BY VIJAY CHANDER KEESARA

6. Nuclear Power Generation

WIND BY VIJAY CHANDER KEESARA

19. Investment components of project for installation

WIND BY VIJAY CHANDER KEESARA

Windiness of the Site

WIND BY VIJAY CHANDER KEESARA

Power is an essential requirement for all facets of our life

WIND BY VIJAY CHANDER KEESARA

availability of reliable and quality power at competitive

India is endowed with a wealth of rich natural resources and

As per the Indian Constitution, the power sector is a

• More than 64% of India’s total installed capacity is

WIND BY VIJAY CHANDER KEESARA

size and steam parameters will result in higher

• Western region accounts for largest share (30.09%) of

• Unbalanced growth remains the cause of concern for

• Southern region remains the dominant region in

Indian Power Industry

Growth of Power Sector infrastructure in India since its

WIND BY VIJAY CHANDER KEESARA

been 141 GW. This India’s 141GW of total power is

WIND BY VIJAY CHANDER KEESARA

companies or with State Electricity Boards (SEBs). National

STATISTICS OF THE SCENARIO IN INDIA

Requirem Availabil % Deman Met %Shorta

WIND BY VIJAY CHANDER KEESARA

WIND BY VIJAY CHANDER KEESARA

PLAYERS IN TNE INDUSTRY

MAJOR CAPACITY GEN. TRANS. DIST.

WIND BY VIJAY CHANDER KEESARA

GOVERNMENT REGULATIONS AND POLICIES

Electricity Act 2003

The Electricity Act enacted in year 2003 has created a new

The Act has made structural change in the market

Open Access in Transmission is allowed right from the date

The Electricity Act 2003 addresses concerns of all the

WIND BY VIJAY CHANDER KEESARA

development of a competitive, efficient, economically viable

IMAPCT ON THE INDUSTRY

• No restriction on captive generation

• National Electricity Policy

The National Electricity Policy has been notified by the

• Full development of hydro potential in India

WIND BY VIJAY CHANDER KEESARA

Tariff Policy has been notified by the Central Government

FEATURES OF THE POLICY

• Tariff of all generation and transmission projects in

The Central Electricity Regulatory Committee (CERC) has

WIND BY VIJAY CHANDER KEESARA

• Return on equity (RoE) raised from 14 to 15.5 per

ROLE OF INSTITUTIONAL PLAYERS

WIND BY VIJAY CHANDER KEESARA

• Assist Central Govt. in formulating National

• Central Electricity Authority

• Central Electricity Regulatory Commission

WIND BY VIJAY CHANDER KEESARA

• State Electricity Regulatory Commission