potential of offshore energy in india
TRANSCRIPT
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Offshore wind energy- Lessons India can learn from Europe
Presentation on xx/xx/xxxx by:Parth BhatiaJunior member,Energy Network ShARE IITB
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Executive Summary
India needs to develop renewable energy to meet its energy consumption growing at 4.9% per year
Wind energy contributes 70% of India’s renewable installed capacity and has great future potential
India is exploring offshore wind energy as a potential source of energy Offshore wind energy has many advantages over onshore like better wind
resources and reduced land conflicts It also has disadvantages like environmental impact and lack of infrastructure
but high cost is the biggest challenge Offshore is still a distant vision because of high cost, no policy incentives, lack
of industrial will and poor wind resources Europe is the world leader in offshore wind power producing 2914 MW with
Germany and UK leading the way The development of offshore wind power in Europe is driven by government
policies and financial incentives India can learn from Europe the lessons of providing financial incentives,
regulating growth to make offshore a reality
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India needs to develop renewable energy to meet its energy consumption growing at 4.9% per year
India needs to nearly double its current installed capacity by 2017
In order to maintain its current growth rate of 8%, India needs an installed capacity of 300 GW by 2017 as against 159 GW in 2008
20002002
20042006
2008
295 308 344 379 433
Energy Consumption in India (MTOE)
4.9%
Fossil fuels contribute nearly 96.4% of the commercial energy consumption in India
• Peaking oil and coal prices make this mix unsustainable over next 50 years
Renewable energy offers a hedge against fossil fuel hikes and volatility and provides a buffer against energy security concerns
Renewable energy can support India’s attainment of climate goals
• India has committed to reduce the emission intensity of GDP to 75% of 2005 levels by 2020 by having15% renewable energy by 2020
Renewable energy is a better option than conventional energy to meet this demand
Sources: NREL: India renewable energy status report
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Wind energy contributes 70% of India’s renewable installed capacity and has great future potential
Wind energy has great benefits like nearly negligible emissions and wide availability
Wind energy is growing at a rate of 14% and is estimated to quadruple in next 10 years
Wind energy could account for 12% of global CO2 emissions reduction by 2050
It is widely available, renewable and could help to reduce the dependence on fossil fuels and provide energy security
As compared to thermal power plants , it consumes almost no water which makes it suitable to water stressed areas
Wind energy industry can provide jobs to 84,000 people in India by 2020
Growth of installed wind power capacity in India
Sources: GWEC:IWO 2010,IEA
2006 2008 2009 2010 2015 20200
10
20
30
40
50 GWEC Predictions
5.3 8.7 10.2
46.1
12.6
Inst
alle
d w
ind
capa
city
(GW
)
24.7
Source Capacity(MW) Generation (GWh)
Wind 100,000 219,000
Biomass 16,881 89,000
Solar PV 200,000 350,000
Total 662,881 2,050,000
14% growth
Grid connected renewable energy potential
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xx
Wind energy has great benefits like nearly
negligible emissions and wide availability
Wind energy contributes 70% of India’s renewable installed capacity and has great future potential
Wind energy is growing at a rate of 14% and
is estimated to quadruple in next 10 years
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India is exploring offshore wind energy as a potential source of energy
India has a coastline of 76,000km with moderate potential on west coast but most of the areas have low potential except Gujarat & TN
A study was undertaken to estimate the offshore potential at Dhanushkodi in Tamil Nadu
• It was found that the average wind speed at 120 m is 19.3m/s which is very high
The CWET has undertaken a study to estimate the offshore potential in India, which is expected to be completed by 2013
Industry giants such as Siemens, Areva, ONGC and GE are exploring offshore possibilities in India
Tata power has already submitted a formal request to Gujarat government to approve its bid to build an offshore plant
Sources: MNRE: IWEO 2011
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Offshore wind energy has many advantages over onshore like better wind resources and reduced land conflicts
The relative competitive of technologies in 2008 and 2018
Onshore wind farms face conflicts over land use and good sites unavailable in many countries
• Large offshore wind farms can be placed since a large area is available at a given site
Power generation from offshore wind turbines benefits from stronger and steadier wind speeds and less air turbulence.
• Offshore turbines thus produce more electricity per installed generation capacity than onshore
Larger wind turbines can be installed at lower heights due to favorable wind and lower transportation bottlenecks as in the case of onshore
The visual, noise and environmental impact of offshore turbines is lower as compared to onshore
The wind resources are better for offshore turbines and technological maturity is increasing
Sources:Markard et al, Esteban et al.
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It also has disadvantages like environmental impact and lack of infrastructure but high cost is the biggest challenge
Turbin
e
Found
ation
Electri
cal in
stall
ation
Projec
t man
agem
ent
Enviro
nmen
tal a
nalys
is
Misc
ellan
eous
Land
rent
815
350 335
10050
10 0
928
80
157
300 15
48Inve
stm
ent
(100
0 eu
ro/
MW
)
The primary cost in onshore is tur-bine whereas offshore is costlier in almost everything else
Land given free in
offshore
Investment distribution in offshore and onshore
Onshore- 1227
Offshore- 1680
The net cost of power produced by an offshore wind farm is 1.5-2 times that of onshore wind
farm
High O&M expenses add to investment to take the net cost of offshore to nearly 2.1M euro/MWSources: EWEA:Economics of wind, Markard et al.
Offshore wind farms could harm or potentially destroy the habitat of fish and marine mammals
• They could also cause bird fatalities but studies show this rate is very low
There is no existing infrastructure to facilitate installation and grid connection
• Windmills need specialized equipment and expertise for installation and operation
_ Ex. Special cranes and carrier ships• Existing grid connectivity is scarce in coastal
areas
Strong storms and salt water require more robust and reliable turbines and cables leading to high maintenance and installation cost
Available sites are restricted due to nature preservation, water depth, distance from coast, nautical routes
Apart from cost, environmental impact and lack ofInfrastructure could prove to be great challenges
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Offshore is still a distant vision due to high cost, no policy incentives and lack of industrial will
Cost of offshore an wind turbine is $ 1.7-2.8million/MW ($1.2 for onshore) which cannot be competitive without government subsidies, financial incentives and policy provisions
Onshore wind energy sites are available, less costly and risky which causes most energy companies to prefer onshore
There is no data regarding wind speeds, density, seismic activity, bathymetric data, maritime activity, water depth etc. for wind resources at offshore locations
There is no government agency or framework to guide and promote offshore wind projects in India• There is a need for a framework to integrate offshore wind energy with power infrastructure, oil and
natural gas industry, and maritime industry• There is no govt. sponsored R & D to adapt offshore to Indian climate and economy • There is a need for state involvement and government-industry partnerships to increase investor
confidence
There is no established supply chain to sustain the industry • There are no companies in India like A2SEA in Europe specializing in installation of offshore turbines
or other companies with skills to perform grid connection and transportation of turbine parts
Tackling each issue systematically forms the roadmap for offshore wind here on
Sources: CWET, EWEA :Economics of Wind
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Europe is the world leader in offshore wind power producing 2914 MW with Germany and UK leading the way
UK
Denam
ark
Netherla
nds
Sweden
Ger
many
0
2000
4000
6000
8000
10000
12000
590.8 409.2 246.8 133.3 12
8755.8
1276
2833.83312
10927.5
Installed by 2008 end Consented
Operating and planned offshore wind farms in 2008 (in MW) Total installed(2010) : 2914 MW
Total consented : 37,441 MW
Total planned : >100GW
Capacity added-2009 : 582MW
Growth rate in 2009: 56% Capacity added-2010 : 883MW
Growth rate in 2010: 51%
EWEA target by 2020 : 40 GW
Europe’s share of world market : 96%
Sources: EWEA, WWEA
There is enough offshore wind energy in Europe to meet its demands 7 times over
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The development of offshore wind power in Europe is driven by government policies and financial incentives
Financial incentives
Govt. Regulations for leasing
land
Denmark Germany UKFactor
Feed-in price
Tax Exemptions
Renewable Energy credits
Other subsidies
Fee
Term
Competition
Selection of site by regulators
13.2c/kWh 9.1 eurocents/kWh N/A
20 euro/ton carbon
tax exemption N/A 4.3 p/kWh
N/A
N/A N/A
N/A
5 p/kWh
Construction grants
One time fee up to 500,000 pounds
NoneNone
25 years 25 years Up to 50 years
First come first serve
Quality of proposalLowest feed-in
YesNoYes
Sources: Snyder et al
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India can learn from Europe the lessons of providing financial incentives, regulating growth to make offshore a reality
Lesson Analysis of the lesson and its success in Europe
Government policies and financial incentives should be
implemented in India
India should encourage
large energy firms to
take the lead
India should aim for maturity of
the technology by regulating growth rate
Feed in tariffs: The developer submits a bid to build an offshore wind farm at a certain feed-in price, ensuring that the operation is, according to their plans, profitable
Tax exemptions: Renewable energy developers don’t pay mandatory carbon tax that other developers pay
Renewable energy credits: Companies get renewable energy credits which they can trade with utilities producing CO2
The total energy subsidies in UK amount to around 18c/kWh which makes production from offshore profitable
Large corporations will have more available capital and will be able to raise additional capital at lower interest rates
A large company can use experience gained to better construct subsequent projects but small companies are too indebted to do more than one large project
European wind farms have been developed by some of the largest energy companies including Vattenfall (Sweden), Shell (Netherlands), DONG (Denmark) and Centrica (UK).
The development rate in Europe was intentionally kept slow by the policy makers in the first 10-12 years
The advantage of this rate of development was that it allowed for the development and maturity of infrastructure, institutional capacity and experience
Since 2001 annual installations in Europe have grown exponentially with 883 MW of offshore wind energy installed in 2010 alone
Sources: Snyder et al., EWEA Annual Statistics 2010, Esteban et al