Energy Outlook - India

January 2019
 Contents

1. India’s Energy Scenario

2. Power Generation Mix
3. RE – Policy Support
4. Opportunities for Future Collaboration in RE sector
5. ReNew Ongoing Collaboration with Norwegian entities

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India’s Energy Scenario
 India’s Energy Sector
• India is world’s third largest consumer of energy (753 MTOE in 2017), after China (3053 MTOE) and USA
3rd Largest Energy (2272 MTOE).
Consumer • Energy consumption in the country has almost doubled since 2000 and the potential for further rapid
growth is enormous

• India’s energy consumption set to grow by 165% the fastest among all major economies by 2040.
+165% Growth in
Energy • India’s share of global demand rises to 11% in 2040 from 5% in 2017.
Consumption by
• India’s urbanisation is a key driver for energy consumption, as it is expected an additional 300
2040 million people are expected to live in India’s cities by 2040

• Coal is by far the largest contributor in the energy mix, but India’s recent climate pledge
RE share increase underlined country’s commitment to growing role for renewable energy sources.
in Energy Mix
• The share of coal in the energy mix will fall from 56% in 2017 to 50% by 2040, while the share of
renewables rises from 2% to 13%.

India’s Energy Consumption in MTOE

Hydro, 4% Renewables, Renewables
Nuclear 3% 13% Oil
Energy, 1% Hydro 25%
Oil, 29%
3%
Nuclear
Energy
2%
753 MToE 1921 MToE
Mar 2018 Mar 2040 Natural Gas
7%
Natural Gas,
Coal, 56% 6%
Coal
50%
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Source: BP Energy Outlook
 India’s Energy Sector
• India’s energy consumption nearly doubled between 2000-2015 period, however its per capita energy
Low Per Capita demand remains low, which is around one – third of world’s average.
Energy • Moreover, close to 240 million people do not have access to access to electricity.
Consumption
• Thus, the potential for India’s economy to grow in years to come is huge.

• Environmental Sustainability:
• Absence of stringent policies to mitigate energy related emissions leads Air Pollution.
Growing demand
has few concerns • Dependence on conventional sources of energy like coal, oil has posed threat to
environmental sustainability.
• Energy Security:
• India imports substantial portion of its energy – 80% oil, 18% gas, 23% coal.
• This raises concern for India’s energy security and socio-economic health of the economy.

• It will be important for India to adopt policies that enhance indigenous energy production as well as
encourage the use of alternative, sustainable, and decentralized sources of energy, such as solar &wind.

• The Government of India has an ambitious goal to achieve 175 GW of renewable energy by 2022.

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Source: IEA Energy Outlook
Power Generation Mix
 India’s Path to Power
Power sector is pivotal to India’s energy economy over the years coal power projects are biggest contributor, however this trend is
likely to shift toward renewables in future.

Capacity Additions in India over the years (GW) Power Generation Mix
344 10% 11% 12% 12% 14% 14% 15%
319 18% 21%
298
267 23% 22% 20% 18% 16% 15% 14% 14%
252 13%
223 9% 9% 8% 8% 8%
203 11% 10% 9% 7%
169 183

53% 54% 56% 58% 58% 60% 61% 58% 57%

FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18

Coal Gas Nuclear Hyrdo RE

Power Generation Mix as of March 2018

Nuclear
Large Hydro 7 GW
45 GW 2%
13%
Solar
Thermal 24 GW
Renewables
221 GW 7%
58 GW, 17%
64% Wind
34 GW
10%
Other Renewables
13 GW, 4%
Total Installed Capacity: 344GW Total Wind + Solar Capacity: 58 GW
Source: CEA
 Transition from Coal to Renewables
India’s NDC commitments for 2030
• Reduce emissions intensity of its GDP by 33 – 35% by 2030 from the 2005 level.
• 40% installed capacity from non-fossil fuel based energy resources (renewable energy).
• GoI has set target of achieving 175 GW of RE capacity by 2022 (100 GW from Solar; 60 GW from Wind).

175 GW
Wind Solar Other Renewables 15

69 GW 100 Govt.
57 GW Target

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13 22
12 60
32 34
0
FY2017 FY2018 FY2022

Wind and Solar Energy tariffs achieved grid parity

• Introduction of competitive bidding has helped renewable energy tariffs to achieve grid parity.
• Wind and Solar competitive advantage over conventional power will drive demand for energy consumption from renewable energy.

9.00 7.90 Solar Wind Thermal

8.00
7.00 6.50
6.00 5.00 4.90 5.00 5.20 5.25
INR/kWh

5.00 4.10 4.15 4.27 4.40

4.00 3.25 3.46
3.00 2.44 2.43
2.00
1.00
0.00
FY 14 FY 15 FY 16 FY 17 FY 18
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Source: MNRE, Deloitte Report
 Penetration of RE in Power Generation Mix
The share of Renewables in country’s incremental capacity addition in FY 18 is ~65%, going forward it is expected to reach >70%

Incremental Capacity Addition

FY12–17 FY18 FY18–22

26.0% 35.6% 29.4%

74.0% 64.4% 70.6%

Renewable Energy Thermal + Other Sources

Renewables Penetration in Country’s Cumulative Installation

FY 18 FY 22 FY 27 FY 40

21.0%
37.0% 44.0% 49.0%
56.0% 51.0%
63.0%
79.0%

Renewable Energy Thermal + Other Sources

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Source: MNRE, Niti Aayog Report, CEA, CRISIL Research
 India lacks behind on Per Capita Electricity Consumption

WE ARE 4-TIMES BEHIND CHINA ON PER CAPITA …AND NEARLY 5-TIMES BEHIND CHINA ON CUMULATIVE
ELECTRICITY CONSUMPTION INSTALLED CAPACITY

~5x

~4x

India is, where China was in 2001.

In 15 years, Chinese capacity grew 5 times, on back on thermal sources. Since RE is at par or cheaper
than thermal now, Indian growth story will be written with renewables over next decade
 As our economy expands, so will our demand for electricity

If India’s per capita electricity consumption increases 2x by 2030, to 2,200 kWh/year, then even 350 GW of solar
and wind will be an underachievement

Today 2030

Electricity consumption
1,100 kWh 2,000 kWh 2,500 kWh
per capita

Electricity Generation
340 GW 800 GW 1,000 GW
Capacity

Percentage solar and wind

15% 45% 45%
in the system

Renewables capacity 70 GW 360 GW 450 GW

 RE – Policy Support
• Electricity Act 2003 notified the State Electricity Regulatory Commissions (SERCs) to promote renewable
Renewable energy by setting yearly RPO targets for obligated entities.
Purchase
Obligation
• GoI has set an indicative target for respective states based on their electricity demand to achieve 175 GW
by 2022.
• Based on these targets, SERCs have set yearly RPO for the obligated entities.

• Wind and Solar power projects have been accorded MUST RUN status under Indian Electricity Grid
MUST RUN Status Code, thus they are not subject to merit order dispatch.

Financial Support • Renewable energy projects are included in priority sector lending, which is relatively cheaper than
other sources of credit.

• Renewable energy generators are allowed to sell power to third party and captive consumers.
Open Access
Regulation • SERCs provide concessions on open access charges like transmission and wheeling charges and
cross subsidy surcharge for sale of renewable energy to third party.

• The potential for renewable energy technologies vary across states, thereby, restricting uniform
RPO across states.
ISTS Charges
Waiver • In order to overcome this bottleneck, the policy waived off the inter-state transmission charges and
losses for solar and wind energy procured through competitive bidding.

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Opportunities for Future Collaboration in RE
 Huge Untapped Renewables Potential
India has excellent natural solar resource – with a realistic,
attainable potential of 750 GW of solar PV and 300 GW onshore wind

750 GW of solar PV 300 GW of wind at 100m hub height

Would require ~6,000 square miles of land Would require ~3,000 square miles of land
Or ~0.5% of all of India’s land* Or ~0.25% of all of India’s land

Source: NIWE, NISE

 ~25 GW Annual RE addition required to meet NDC targets
India would require an annual addition of ~25GW of renewable
capacity till 2030 to reach the target of 40% RE share of overall capacity

2.4 Trillion
600 300GW RE units of
Renewable
s
Bn Units capacity electricity
estimated
PM Modi’s Vision:
75GW
Conventional 600 Conventional
Bn Units capacity 40%
1.2 Trillion
units of Renewables share of
electricity Total Installed Capacity in
consumed 2030

2018 12 years 2030

If we account for replacement of existing coal based generation, another 10GW of RE capacity would have to
be added year-on-year
 New Renewable Opportunities

• MNRE has notified National Wind-Solar hybrid policy to promote hybrid projects as it offers flowing benefits

Wind Solar Hybrid • Minimizing the variability of power output as Wind and Solar compliment each other.
• Hybrid projects enable in optimal and efficient utilization of transmission infrastructure and land.
• Govt. aims to achieve hybrid wind solar capacity of 10 GW by 2022

• India has numerous large reservoirs spread across geographies, with potential of 40,000 MW
covering just 0.5% of water bodies.
• Floating Solar can solve the perennial problem of land availability/ acquisition.
Floating Solar
• GOI plans to achieve 10,000 MW of Floating Solar Capacity in India.
• India’s current operating floating solar capacity is ~7 MW, however basis aforesaid we expect
floating solar market to pick up pace and deliver 420% CAGR till 2020

• India’s long coastline offers significant Offshore wind potential.

• Based on various studies govt. of India identified Guj & TN as potential states to kick-off Offshore
Offshore Wind Wind in India with an overall potential of 70 GW
• GoI already notified Offshore Wind targets: 5GW by 2022 and 30 GW by 2030.
• 1 GW offshore tender announced in Gujarat in May 2018; expected allocation in March-May 2019.

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ReNew Ongoing Collaboration with Norwegian
entities
 ReNew-Equinor Partnership for first Offshore project in India

Indian Market experience Global Offshore market experience

Onshore Wind farm development, Offshore Wind farm development,
engineering, construction and O&M engineering and O&M experience
experience
Global supply chain relationship
Local liaising
Multi-contracting construction
Local supply chain relationship mgmt.
Financing capabilities Financing capabilities

In addition to this, both companies are also exploring opportunities to

partner in the larger renewable energy spectrum

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Ongoing Engagements with Other Norwegian Companies

• Scheduling and Forecasting for 300 – 400 MW of renewable assets.

• Worked with Carbon Trading desk for selling iREC for the first non hydro
renewable energy project.

• Engagement on Wind Resource Studies, Turbine technology due diligence

and Proof of Concept for scheduling and forecasting.

• Using Bazefield services for SCADA based analytics platform for ReNew’s
existing wind project

• Proof of Concept for SCADA based analytics platform for ReNew’s existing
wind project

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Thank You

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