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TABLE OF CONTENTS
GREEN
Chapter ENERGY: A POLICY PERSPECTIVE
No.
1.
CONTENTS
Acknowledgment
List of Abbreviations/Acronyms
Executive Summary
Green Energy: An Introduction
1.1 Background
Introduction
Submitted 1.2
in total
fulfillment of the requirement for
1.3 The Problem Statement
Programme
2.
Green Energy: Indian Scenario
rd
2.1 The present
scenario
and potential
(23
March
3rd May, 2015)
2.2 Types of green energy
2.3 Indias Energy Response
2.4 Indias Push for Renewable Energy
Submitted
By Group-II:
2.5 Aggressive goals
for renewables
2.6 Still committed to coal
Ajit Kumar
3.
Existing Institutional/ Policy Framework
F.D.Initha
3.1 Institutional Mechanisms
3.2 Regulatory Framework
M.S.Nayar
4.
Alternate Policy for Green Energy
K.K.Jha
4.1 Alternate Policy
4.2 Enhancement in targetG.S.Arora
for RPO
4.3 Implementation of HPO
Alka Ahuja
4.4 Massive Solar Mission
5.
Additional Recommendations/ Aspirations
5.1 Decentralized solar energy system
5.2 Rural Electrification
5.3 Green Buildings
5.4 Renewable Energy based cooking system
Page Nos.
3
4
5
8-13
Level E Training
14-22
23-28
29-38
39-42
6.
7.
43
44
ACKNOWLEDGEMENT
We, the members of Group-II, undertaking the 29th batch of Level E Training
Programme for deputy/Under Secretaries of the CSS at ISTM, New Delhi from
23rd March to 3rd May, 2015 express our gratitude to the Department of Personnel
& Training (CS Division), Government of India for having us nominated to attend
this prestigious Training Programme which enabled us to broaden our outlook and
also exposed us to a better decision making and analytical techniques.
We are also grateful to the faculty of ISTM Shri Satyajit Mishra (Course
Director), Joint Director and Shri Vadali Ram Babu (Course Coordinator), Deputy
Director and for having provided us with insights and guiding us during the course
of the preparation of this policy paper. We are also thankful to Shri Umesh Kumar,
Director, ISTM and Shri. Chandan Mukherjee, Deputy Director (ISTM) and also to
all academic and administrative officials, especially Shri Sethuraman for his
support and valuable guidance and interactions at regular intervals.
The Group also expresses its gratitude to the Ministry Of Power, Ministry of
New & Renewable Energy, Ministry of Coal and Central Electricity Authority
(CEA) without active assistance and cooperation of whom, this paper would not
have been prepared.
A set of thanks to all the participants for providing moral support and
intellectual inputs for completing this paper.
Ajit Kumar
F.D.Initha
M.S.Nayar
K.K.Jha
Alka Ahuja
2
G.S.Arora
S.No.
Acronym
Definition
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
HPO
HEPs
RPO
IC
MW
REC
EC Act
CEA
SERC
CERC
IPP
MNRE
BEE
CSP
IEPR
IREDA
PPA
RPS
PMD
RFD
MoP
MoEF
JNNSM
LIST OF ABBREVIATIONS
EXECUTIVE SUMMARY
Energy plays a central role for the development and growth of a nations
economy and it is a key indicator to its prosperity. For more than a century, Fossil
fuels have been one of the cheapest and most prevalent source of energy. On one
hand, the sources for fossil fuels are depleting fast and on the other hand, they have
been held responsible for causing irreparable loss /degradation to the global
environment and ecological climate, and also causing heavy burden on the
exchequer of the world economies as the prices of fossil fuels have soared very
high. Simultaneously, energy deficit has been most challenging factor for India.
4
Therefore, GREEN ENERGY has rightly been advocated as a panacea to all these
problems
The Govt. has initiated efforts to achieve 24x7 power for all. However, it is
to mention that the Real-time Demand and Supply vary constantly. For long,
conventional sources of Coal, Gas, Nuclear and hydro power stations apart from
some Diesel stations formed the backbone of our power system. Of late, nonconventional sources like the Solar, Wind etc. power system in the country are also
contributing significant infirm power to the system. The Govt. have initiated
efforts to give further push to the development of these renewable resources other
than hydro power like Solar and Wind in big way. However, the power from these
renewable resources is intermittent in nature and also not very dispatchable
friendly i.e. these generating plants cannot be turned on or off, or cannot adjust
their power output on demand. Therefore, power systems have to follow both
varying electricity demand as well as to adjust to an increasingly variable power
intake. As such, back-up power and flexible generation from other sources would
be required to balance the demand and supply or the load-shedding has to be
resorted. Therefore, ensuring system stability and a continuous flow of electricity
by balancing fluctuations in frequency and voltage in future is also a challenge
since with increasing share of wind and solar power, the electricity system will
face ever more generation-driven fluctuations.
Further, Indias substantial and sustained economic growth, increasing
prosperity and urbanization, rise in per capita consumption, and spread of energy
access is placing enormous demand and supply imbalance in energy sources
requiring serious efforts by State / Central Government to augment energy supplies
with an ambitious plan of capacity addition in Renewable Energy Sector.
On one hand, there is a threat of increase in energy deficit, creating serious
problems for Indias future energy security. It is apparent that there is a significant
risk of lesser thermal capacity being installed on account of lack of indigenous coal
in the coming years because of both production and logistic constraints, and
increased dependence on imported coal. Significant accretion of gas reserves and
production in recent years is likely to mitigate power needs only to a limited
extent. Difficulties of large hydro are increasing and nuclear power is also beset
with problems. Already, in the electricity sector, current official all-India peak
deficits are around 13% (CEA website) which may increase further. Therefore,
Renewable energy is no longer alternate energy, but will increasingly become a
5
key part of the solution to the nations energy needs making a substantial
contribution.
Moreover, India has signed various International Agreements to adhere to
the norms of Green Energy and climate change, and, therefore, India has
international compulsions as well to shift significantly to Renewable sources of
energy.
In this context, our study has sincerely made an endeavor to examine the
existing Green Energy Scenario in India and have recommended policy initiative
for Green energy Clean energy as an alternative to fossil fuels and to meet the
energy deficit and also as a panacea for the environmental degradation and climate
change. During the 12th Five Year Plan (2012-17), a capacity of 30,000 MW of
Renewable Energy has been targeted which is around 34% of the total targeted
capacity of 88537 MW for all the resources during the period. (NITI AYOG Plan
Paper). Union Minister of Power has targeted a capacity of 1 lakh MW from Solar
Power alone by end of 2020 ( MOP Document). In order to understand the present
scenario, Fuel-wise installed capacity break-up (in MW) AS ON 1.3.2015 is given
below Technology
Hydro
Thermal
Installed
Capacity
40,798
1,77,741
Renewables
(RES)
*31,692
Nuclear
Total
4,780
2,55,012
*R.E.S. includes Small Hydro, Biomass, Urban & Industrial waste power, solar
power, Wind power etc.
In this study, efforts have been made to suggest alternate policy initiative to
address the issues. The main premise of our study is that the State is the primary
player in promoting green energy through its laws, legislations, policies and
programs. Hence we would like to analyze the extant laws /Acts/Rules/Guidelines
etc on green energy. A scrutiny is be made in respect of existing Central Govt.
policies for promotion of Green energy in all forms be it solar, wind, small Hydropower, bio gas, geo-thermal, tidal etc. The study would also broadly go in to the
green energy as a technology- alternative and suggest measures to maximize the
use of green energy for all sorts of viable energy needs. Since the ambit of Green
6
Energy is very vast, therefore, the Group had to restrict the scope of the policy
initiative to power generation mainly. Hence, the prime focus will be on power
generation. We would also be exploring the external linkages and the role of stake
holders like the Centre, State, NGOs, Independent Power Producers (IPPs) etc.
The study would also deal with proposed new policy initiatives in the arena
of GREEN ENERGY like
promotion of grid-interactive renewable power
generation projects, promotion of renewable energy initiatives for meeting energy,
lighting needs in rural areas, supplementing energy needs in urban areas,
supplementing energy needs in industry and commercial establishments, and
research, design and development activities at premier national institutions and
industries on advancement in Green energy technology and finally encourage
development of a robust manufacturing industry in Renewable Energy Sector.
The study would try to find out the effectiveness and feasibility of the use of
GREEN ENERGY and role of non-state sectors like NGOs, Households etc., apart
from policy initiatives and new legislations in use and promotion of Green Energy
for the positive impact it has on the environment, economy and the climate change.
We would also suggest that India needs to shift from fossil fuels to other nonconventional energy options, such as solar energy, wind energy, biomass and small
hydro power-projects for a sustainable energy development in India. It seems that
India will definitely achieve the objective of Green Energy as both Honble Prime
Minister Shri Narendra Modiji and Energy Minister Shri Piyush Goyalji are two
whole hearted committed Leaders we have in present set up.
CHAPTER 1
"Affordable, adequate and high-quality 24x7 power to every
home in the country for every industry - small scale, medium scale, for
every shops (small or big) how we can make India diesel-generator free
1.1
was the theme of the second conference that we have had after the new
BACKGROUND
government came in the country. After this two-day conference, I am
doubly convinced that Prime Minister Narendra Modi's vision and his
mission to provide 24x7 power to every Indian will be fulfilled by
2019.
7
programmes consume vast amounts of energy. Since the oil crisis of the
8
INTRODUCTION
In the history of mankind, renewal energies have for a long time been the
primary possibility of generating energy. Industrial Revolution changed the
energy trend all over the world. (U.S. Environmental Protection Agency).
Green Energy is energy that can be extracted, generated, and/or consumed
without any significant negative impact to the environment. The planet has a
natural capability to recover which means pollution that does not go beyond
that capability can still be termed green.
Green power is a subset of renewable energy and represents those renewable
energy resources and technologies that provide the highest environmental
benefit. The U.S. Environmental Protection Agency defines green power as
electricity produced from solar, wind, geothermal, biogas, biomass and lowimpact small hydroelectric sources.
"Effectively, the provision of energy such that it meets the needs
of the present without compromising the ability of future generations to
meet their own needs. ...Sustainable Energy has two key components:
renewable energy and energy efficiency." Renewable Energy and
Efficiency Partnership (British Journal, 2013
Firstly, Energy is the most important problem of the world, because of two
reasons: First; the sources are limited. Considering the relationship between
the standard of living and the energy usage, the situation is being worse year
by year. Secondly; the processes to convert the fossil fuels are deeply
hazardous for the environment.
Fortunately, the energy flows that occur naturally and repeatedly in the
environment can be harnessed for human benefit. The ultimate sources of
most of this energy are the sun, gravity and earths rotation. In renewable
energy literature, the words alternative and sustainable are being used to
emphasize the possibility of using sources other than the fossil ones which
will finish never. Whatever they are called, renewable, alternative and
sustainable, these energy systems are planned as the parts of the solution
to the energy problem by substituting the fossil sources with the replenished
ones. Renewable energy is the energy obtained from the continuous or
repetitive currents of energy recurring in the natural environment. To assume
any energy flow as renewable it should be replenished at least at the same
rate as it is used. A renewable energy system is an alternative one, if it is
10
able to provide some or entire part of the energy needs which is met by the
fossil fuels. Such a system is also sustainable because the energy supply will
sustain continuously, as the sun continues to shine, gravity continue to apply
on the objects and the earth continues to rotate. Fossil fuels, on the other
hand, like coal, petroleum and gas are the conventional ones having no
sustainability.
1.3
rapid rate and overtaken the supply, leading to power shortages in spite of
manifold growth in power generation over the years.
Focused efforts will bridge this demand-supply gap by way of policy
reforms, participation from private sector and development of the Ultra
Mega Power Projects (UMPP).
Therefore, the government has to take a tough stance between balancing
economic development and environmental sustainability. One of the primary
challenges for India would be to alter its existing unstainable sources of
energy.
13
CHAPTER -2
GREEN ENERGY: INDIAN SCENARIO
2. 1
rapid rate and overtaken the supply, leading to power shortages in spite of
manifold growth in power generation over the years.
Focused efforts will bridge this demand-supply gap by way of policy
reforms, participation from private sector and development of the Ultra
Mega Power Projects (UMPP).
"The power sector offers tremendous opportunities for investing
companies due to the huge size of the market, growth potential and
returns available on capital. Industrialisation, urbanisation, population
growth, economic growth, improvement in per capita consumption of
electricity, depletion of coal reserve, increasing import of coal, crude oil
and other energy sources and the rising concern over climate change
have put India in a critical position - Renewable Energy Status Report
2014.
Therefore, the government has to take a tough stance between balancing
economic development and environmental sustainability. One of the primary
challenges for India would be to alter its existing energy mix, which is
dominated by coal, to a larger share of cleaner and sustainable sources of
energy.
2.2
Wind Energy: Wind energy is produced when the wind rotates blades
around a hub, which is connected to the main shaft. The main shaft spins a
generator. The size of turbines is determined by how much energy is
needed. Small wind turbines are usually used for homes, farms and
ranches. Other ways to use wind energy include grinding grain and
pumping water.
The disadvantages of wind energy are that again, the technology is very
expensive, the machinery is known to be noisy, birds have been killed by
running into the turbines, and the wind might not be present at certain
17
18
2. 3
2. 4
19
carbon emissions in the next 25 years, will play a critical role in any effort to
address climate change.
Shortly after Shri Modi took office in May, one of his party officials made a
sweeping promise: India would develop enough solar power to run at least
one light bulb every home by 2019. The goal is part of a larger push to boost
renewables in India, where energy demand is projected to double over the
next 20 years. But even with a drastic boost of renewable energy, India faces
a formidable challenge in weaning itself from coal, which accounts for 59
percent of its electric capacity. That dependence on fossil fuels is why India
ranks fourth behind China, the United States, and the European Union in
global greenhouse gas emissions.
2. 5
the world's largest solar power plant, a 4,000-megawatt project in the midst
of the Thar Desert in the west, have stalled over concerns about the risks to
flamingos and other migratory birds.
Modi's government formalized its support for renewables with the annual
budget it released in July, allotting funds for "green energy corridors" that
are meant to address chronic issues with transmitting energy from renewable
sources to market. The budget also funds the development of small solar
parks along canals and solar-powered pumps for farms, among other
sustainability initiatives.
But in some respects, the budget's scale was modest: It allotted funding for
large solar power projects in just 4 of India's 29 states. As per experts in the
field , it is presumed there is a need a ten-fold increase in investment in new
and renewable energy and a long-term plan if we want to put a dent in our
consumption of coal and oil.
Renewables other than hydroelectricwind, solar, geothermal, and biomass
currently account for 13 percent of India total electric-generation capacity,
more than twice as high a proportion as in the United States. But in practice
they contribute less to the power grid because of a lack of transmission
capacity and a lack of incentives for companies to purchase solar and wind
power.
21
2.6
22
CHAPTER- 3
EXISTING INSTITUTIONAL / POLICY FRAMEWORK FOR
GREEN ENERGY
3. 1
INSTITUTIONAL MECHANISM
23
legal / penal powers. It has also declared that it may start using its legal
authority and powers to mandate actions in future. The BEE website
suggests that the power distribution utilities should have demand-side
management (DSM) cells (to implement the DSM programs). The BEE also
offers training support for the DSM cells set up by the utilities. The BEE
seems to imply utility-sponsored efficiency programs as a energy efficiency
improvement across industry through improved capacity utilization, fine
tuning, and technology up gradation.
3.1.3 Indian Renewable Energy Development Agency Ltd (IREDA)
Indian Renewable Energy Development Agency Limited (IREDA) was
established on 11th March, 1987 as a Public limited Government Company
under the Companies Act, 1956 and it promotes, develops and extends
financial
assistance
for
Renewable
Energy
and
Energy
Efficiency/Conservation Projects.
IREDA has been notified as a Public Financial Institution under section 4
A of the Companies Act, 1956 and registered as Non-Banking Financial
Company (NFBC) with Reserve Bank of India (RBI).
IREDAs mission is Be a pioneering, participant friendly and competitive
institution for financing and promoting self-sustaining investment in energy
generation from Renewable Sources, Energy Efficiency and Environmental
Technologies for sustainable development.
IREDAs Motto is Energy for Ever.
The main objectives of IREDA are:
To give financial support to specific projects and schemes for
generating electricity and / or energy through new and renewable
sources and conserving energy through energy efficiency.
25
3.2
REGULATORY FRAMEWORK
3.2.1 Energy Conservation Act, 2001: A. The main features of the Energy Conservation Act, 2001 are as under With the background of high energy saving potential and its benefits,
bridging the gap between demand and supply, reducing environmental
emissions through energy saving, and to effectively overcome the
barrier, the Government of India has enacted the Energy Conservation
Act- 2001. The Act provides the much-needed legal framework and
institutional arrangement for embarking on an energy efficiency drive.
Under the provisions of the Act, Bureau of Energy Efficiency has
been established with effect from 1st March 2002 by merging
erstwhile Energy Management Centre of Ministry of Power. The
Bureau would be responsible for implementation of policy
programmes
and
coordination
of
implementation
of
energy
conservation activities.
Standards and Labeling ( S& L ): Standards and Labeling (S & L) has
been identified as a key activity for energy efficiency improvement.
The S & L program, when in place would ensure that only energy
26
28
CHAPTER 4
ALTERNATE POLICY A POLICY FRAMEWORK FOR ADAPTATION
OF GREEN ENERGY AND SUSTAINABLE DEVELOPMENT
4. 1
ALTERNATIVE POLICY
In the backdrop of the forerunning facts, it is apparently evident that in view
of the energy crisis, demand supply gap, global call for climate change,
inherent limitations of the existing policies, to achieve 8 lakh MW target of
capacity addition in the field of energy sector and to ensure that at least 50%
of the capacity comes from green energy, we are required to take various
policy initiatives on priority basis in India. Our Group has resolved to
recommend some major policy initiatives which have been explained in the
subsequent paragraphs.
4.2
solar RECs than for non-solar RECs are intended to increase the
attractiveness of the REC trading mechanism. On the other hand, the down
pricing may discourage investment in new renewable energy projects.
CERC estimates the impact of RPOs on consumer prices as insignificant.
SERCs are individually responsible for administering punishment in case of
non-compliance with the CERC mandated RPOs. Therefore, most of the
States have set the maximum REC price as penalty fee when their specific
RPO is not achieved. However, there is a little evidence compliance
mechanism is actually not enforced.
At present, the RPO varies between 0% to 4%. However, there is a need to
enhance this limit to 12%. The new Government laid by Shri Narendra
Modi has given a clear indication that the RPO level may be enhanced to
more than 10%. Therefore, it is recommended that the MNRE Ministry
should bring immediate policy amendment to introduce a mandatory
level of at least 10% for RPOs. This will definitely give a boost to the
green energy sector.
4.3
31
In order to improve hydro share in the energy mix, faster rate of capacity
addition needs to be endeavored. The measures required for facilitating
hydro development include:
19
47
60
51
50
46 44
Government is working separately for expediting
E&F clearances
and
for
42 42 3
41
40
37
37
30
33
providing better financial package for hydro 20
projects. The present
proposal
10
is for devising HPO.
0
As per the present assessment, the exploitable hydro potential of the country
is of 1, 45,000 MW. Out of this potential , only around 41000 MW ( above
25 MW IC )has been exploited so far, while around 15000 MW is under
construction (as on 1.3.2015- CEA Report) and balance 89,000 MW is yet to
be exploited. Thus, there is a lot of potential in Hydro power is yet to be
tapped up.
In view of the above it is proposed that each State may be mandated to have
a certain percentage of hydro energy in the total energy mix of that State.
This methodology will pave way for additional capacity addition at National
level whereby hydro energy could be procured by the States for achieving
the mandated hydro energy share by the end of 13th Plan.
32
33
%age addition in hydro energy share over the hydro energy share at
the end of 12th Plan based on the average cost of procurement of
Power w.r.t. average cost at all India level. Wherever the procurement
cost is lower the proposed incremental hydro energy is higher.
Different %age of increase in hydro energy share has been considered
for different ranges of %age peaking requirement of the state (which
is based on load factor). Wherever the peaking requirement is lower
the proposed incremental hydro energy is lower.
To factor in impact of variability in renewable, 20% of renewable
capacity is considered.
4.3.4 Calculation of Hydro Energy %age for HPO :
Based on the criterion mentioned above , State wise incremental % addition
in hydro energy (over and above the hydro energy at the end of 12 th Plan)
during 13th Plan has been arrived at as mentioned below ( source : MOP) :
0.2% to 1.0%
1.1% to 1.5%
- J&K, Assam
1.9% to 2.0%
2.2% to 2.5%
3.0% to 3.2%
4.9%
- Gujarat
5.6%
-Tamil Nadu
6.0%
- Rajasthan
bundle
MW
of
energy
from
coal
(NRDC
2012a).
The solar tariff was fixed by a pay-as-you-bid scheme where the developers
providing the highest discounts from the Central Electricity Regulatory
Commission (CERC) feed-in tariff benchmark were selected. The most
important contribution of the JNNSM has been providing an impetus to solar
energy in particular, solar PV in India, and in a cost-effective manner,
without which no deployment at scale can be justified.
Recently, the Union Minister of Power, Shri Piyush Goel has announced a
very ambitious target of one lakh MW for solar capacity addition. This will
definitely revolutionize the renewable energy sector.
39
CHAPTER-5
ADDITIONAL ASPIRATIONAL RECOMMENDATIONS/GOALS FOR
DECENTRALISED RENEWABLE ENERGY APPLICATIONS
5.1
40
5.2
5.2
GREEN BUILDINGS
Almost 40% of the total energy is utilized in the building sector. A green
building designed through solar passive concepts and including active
renewable energy systems can save substantial conventional energy apart
from generating energy for meeting various requirements in different
seasons. Keeping in view our climatic conditions, a National Rating System
- GRIHA has been developed which is suitable for all types of buildings in
different climatic zones of the country. It is expected that the Rating system
will promote the design and construction of green buildings in the country.
41
43
CHAPTER-6
ROLE OF CENTRAL AND STATE GOVERNMENTS
6.1
with
various
State
Governments
for
notification,
*****
44
BIBLIOGRAPHY
1.
2.
3.
4.
5.
45