Transcript Suzlon Energy Limited Welcomes You

Wind Energy in India : Realisable Option
for Power Generation
Harish Mehta
Director
SUZLON Group of Companies
Disclaimer
Except for the historical information contained herein, statements in this presentation, which contain words or phrases
such as "will", "would", "expect", "believe", and similar expressions or variations of such expressions may constitute
"forward-looking statements". These forward-looking statements involve a number of risks, uncertainties and other
factors that could cause Suzlon Energy Limited's (the "Company's") actual results to differ materially from those
suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the
performance of the Indian economy and of the economies of various international markets, the performance of the wind
power industry in India and world-wide, competition, the Company's ability to successfully implement its strategy, the
Company's future levels of growth and expansion, technological implementation, changes and advancements, changes
in revenue, income or cash flows, the Company's market preferences and its exposure to market risks, as well as other
risks. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances
after the date thereof.
This presentation and any information presented herein are not, and are not intended to be, offers to sell nor solicitations
of offers to buy the Company's equity shares or any of its other securities and shall not constitute an offer, solicitation or
sale in any jurisdiction in which such offer, solicitation or sale is unlawful
The Company's equity shares have not been and will not be registered under the U.S. Securities Act 1933, as amended
(the “Securities Act”), or any state securities laws in the United States and, as such, may not be offered or sold in the
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Any offering of the equity shares to be made in the United States (or to U.S. persons) was made by means of a
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placement memorandum will contain detailed information about the Company and its management, as well as financial
statements.
Sustainable Development : Energy
and Environment convergence
 Energy
• World is running out of fossil fuel
• The last two years has seen highest
• Demand for energy is outstripping the growth in generation
capacity
 Environmental problems
• Air – Emissions (SOx, NOx, CO, SPM), ozone depletion, global
warming
• Water-Acid precipitation, degradation, loss of bio-diversity
 Sustainable
Economy”
development
of
“Energy
 Harnessing renewable energy holds the key
+
Ecology
+
Renewable Energy:
Global Scenario
3,850,000 MW worldwide
 190,000 MW is grid
connected RE (5%)
5000
Ch
in
a
J
a
Ne
t h pan
er
lan
ds
Ro
W
0
UK
• 11,407 MW in 2005
10000
In
De dia
nm
ar
k
It a
ly
 About 48 % through wind
energy alone
15000
US
25,000 MW added last
calender year
Wind Installations world over – Dec’05
m
an
y
Sp
ai
n

MW (cumm)....
• 59,000 MW of wind energy
installations
20000
Ge
r

Year
RE no longer a fringe player
 Global RE market was valued more than US $25 billion in
the 2005 calendar year
 Approximately 45% attributed to wind energy alone
 Several estimates put the Global RE market to grow to
US$100 billion by the year 2010
 Growth in the last 5 years was about 30%, the same is
likely to continue in the coming years
 Generation from renewable energy surpassed 17,000
million units in FY 2005-06, which is more than generation
from nuclear energy in India
Global Wind Energy: On a Strong Growth
Path
 Global wind energy sector
expected to grow to 117,412
MW between 2004 and 2009E
 Region-wise capacity growth
expected at
 38% for Australia
 25% for Asia
Key Markets Wind Power Status 2004 vs. 2009E
: Cumulative Installed Capacity (MW)
CAGR (2004 – 2009E)
23%
23%
18850
8300
8000
6000
 17% for Europe
4000
6750
3000
3119
2121
2000
769
421
00
India
2004
Source : BTM Consult ApS Report 2005
38%
10000
20000
 23% for America
 India, China, Australia and US
are expected to be key growth
markets
32%
China
Australia
2009E
US
Key Growth Drivers for Wind Energy
•
Cost Competitiveness
•
•
Environmental
Awareness/
Government Initiatives
Energy Security
Increased Electricity
Demand
Source :
(1)
American Wind Energy Association
(2)
World Energy Outlook 2004, IEA
(3)
World Energy Outlook 2004, IEA
•
Cost per Kwh of wind generation decreased from US$ 0.38 in
early 80s to present US$ 0.03-0.06, at excellent wind sites (1)
Rising Oil &Gas prices makes Wind Energy cost competitive
Kyoto Protocol Implementation - Carbon-dioxide emission to
reduce by 5.2% of 1990s levels, by 2012
Implementation of Renewable Portfolio Standard requires
minimum percentage of power generation from Renewable
Energy
•
Price volatility of Oil &Gas have increased focus on Renewable
Energy
•
Global Electricity Consumption expected to double between
2002 & 2030(2)
– higher growth in India and China
Wind Energy’s contribution expected to increase from 0.2% in
2002 to 3% in 2030 (3)
•
Renewable targets & policies
 Renewables require support
 Many governments through public policy have fixed
targets/goals
 EU – 20% by 2020
 India – 10% by 2012
 China – 10% by 2020
 Various governments have implemented incentive
schemes to stimulate the market to achieve these targets
 Feed-in tariffs
Simplistic, transparent, popular & most successful
 Fiscal incentives
 Investment subsidies
 Tendering & procurement
 Market based mechanisms
Comparision of regulatory & policy
frameworks
Country
Feed-in tariffs
Investment
subsidy
Quota/
Certificates
Fiscal
measures
Germany
√
√
Spain
√
√
Denmark
√
√
Italy
√
√
√
√
√
√
√
√
√
?
√
√
√
UK
US
√
India
√
Australia
China
√
√
√
√
Indian Energy Environment
Potential for Growth in Energy Consumption
 India has been characterized by energy shortages
 Installed capacity of 115,544 MW, as of March 2005
 Demand exceeded supply by 7.3% with peak shortage at 11.7%
(1)
 Strong growth potential for electricity consumption in India
 One of the lowest electricity consumption levels globally
 Per capita electricity consumption of 355 kWh compared to 827 kWh in China,
1,878 kWh in Brazil and 12,331 kWh in the United States (2)
 “Power for All by 2012” vision by Indian Government to increase
installed capacity to 200,000 MW
 Electricity Act 2003 stipulates minimum percentage of power generation from
renewable energy
 Government of India expects alternative energy sources such as wind energy to
play an important role in bridging electricity deficit
Source
(1)
CEA
(2)
United Nations
EA 2003 & grid connected RE

Section 61(h) : The Appropriate Commission shall, subject to the provisions
of this Act, specify the terms and conditions for the determination of tariff,
and in doing so, shall be guided by the following, namely:(h) the promotion of co-generation and generation of electricity from
renewable sources of energy;

Section 86(i)e: The State Commission shall discharge the following functions,
namely:

(e) promote cogeneration and generation of electricity from
renewable sources of energy by providing suitable measures for
connectivity with the grid and sale of electricity to any person,
and also specify, for purchase of electricity from such sources, a
percentage of the total consumption of electricity in the area of a
distribution licensee;
Various State Commissions have put significant emphasis on the last part
of this important clause while developing regulations for Distribution Licensees
under their jurisdiction
Status of section 86(i)e in
India
State
Status of RPS Regulation
Minimum Quantum
MP
Final Regulation
0.5% Wind
Karnataka
Final Regulation
5-10%
Orissa
Final Regulation
3% (Wind+Hydro)
Gujarat
Final Regulation
2%
Rajasthan
Order issued
6%
UP
Order issued
7.5%
AP
Final Regulation
5%
Tamil Nadu
Order issued
10%
Kerala
Final Regulation
5%
Maharashtra
Draft Regulation
6%
Wind energy in India :
Perspective

Initiated by Government of
India in mid-80’s
 Private sector investments
started in early ’90s
1800
1600
1400
 Resource potential of 65,000 1200
MW +
1000
800

Installation >5,200 MW by
March, 2006
 Fourth in the world
 1700 MW + in the FY 2006
 High growth in the past 5
years
MW
per
year
600
400
200
0
1992
1994
1996
1998
2000
Year
2002
2004
2006
Impact of fiscal benefits
There is a gradual move from “tax driven” market to “energy
driven” market in India
65.0
55.0
Fiscal Incentive(%)
1800.0
Plant Load Factor
1600.0
Installations (MW)
1400.0
%
45.0
1200.0
1000.0
35.0
800.0
25.0
600.0
400.0
15.0
200.0
5.0
0.0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Years
MW

Sum-up

Wind energy can go a long way to establish the energy security in
India
 More than 1,700 MW added in the last financial year – 98% by private
sector

Wind energy can easily meet 5% of total energy generation in
India on the shorter run
 Countries like Germany & Denmark have increased this share to as
high as 20%

Instruments like production tax credit would commercialise this
source of energy in the near future
Thank you