Hydro Energy | Green World Investor

China with World’s Largest Hydro Power Capacity aims to Double it by 2020

29 Nov, 2010

China has the world’s largest hydro power capacity at 200 GW and it plans to double the capacity by 2020.China is mostly dependent on Coal Power and Hydro Power to meet the electricity demand from its fast growing economy.China has the world’s second largest electricity capacity at 850-900 GW second only to USA at ~1000 GW.This will be soon be overtaken as China continues to grow at 8-10% and its electricity per capita is still much below developed world standards.China is already the world’s biggest consumer of Energy and emitter of Greenhouse Gases.Despite rapidly investing in Nuclear and Renewable Energy,China’s voracious demand has failed to stop the alarming growth of Fossil Fuel Energy.It already consumes 3 Billion Tons of Coal per year and is already importing around 180 million tons per year.

Both from the viewpoint of Global Warming and containing the usage of limited Fossil Fuel resources,China has to redouble its efforts in the Clean Energy area.China had recently stopped giving permit for huge hydel projects after the gargantuan 3 Gorges Dam had led to protests over its environmental impacts and threat of earthquakes.However with China failing to meet targets of reducing the Energy Intensity of its GDP by 40-45% by 2020,the government has started giving permits for large hydro once again.China’s leading governing council NDRC has approved 2.4-GW Guan’di hydropower station and the 600-megawatt Tongzilin hydropower project.Note Large Hydro Projects have a long gestation period of 5-6 years and to meet its target of 380 GW by 2020,China has to approve and initiate the projects soon.

China approves more hydropower amid clean energy push – Reuters

The country’s total hydropower capacity reached 200 GW in August and top energy official Zhang Guobao said capacity had to reach 380 GW by 2020 if the country was to meet its clean energy and emissions targets.

He said China needed to start building 120 GW of hydropower projects in the six years through 2015 given the longer construction time needed compared with coal-fired plants

The National Development and Reform Commission (NDRC) said on Monday in reports on its website (www.ndrc.gov.cn) that it had approved the construction of the 2.6-gigwatt (GW) Changheba hydropower project in Sichuan province this month.

The approvals come after the NDRC agreed in late October for China Three Gorges Power Corp (CTGPC) to proceed with early-stage studies for the 8.7-GW Wudongde and 14-GW Baihetan hydropower projects.

Renewable Energy in India – Past,Present and Future

26 Nov, 2010

Renewable Energy in India is growing at a rapid pace increasing its share of the total capacity from 2% in 2003 to around 10% in 2010.However the share of electricity generation is still quite low at 3% due to the lower capacity load factors of Green Energy Sources compared to Fossil Fuel Sources.The Total Installed Capacity of Renewable Energy in India is around 16 GW with Wind Energy taking the Lion’s share at almost 70% followed by Small Hydro at 15% and Biomass Energy at 12%.Solar Energy in India till now has a capacity of just 6 MW which is estimated to grow to 22 GW by 2022 making Solar Energy one of the Biggest Growth Opportunities in the Field of Indian Energy.

Renewable Energy Capacity in India

1) Wind power has seen a phenomenal growth of around 33% CAGR in the last 5 years and the total capacity at end of 2009 was 10,892 MW with most of the capacity installed in the state of Tamil Nadu which is the largest state in terms of Alternative Energy Capacity in India
2) Small hydro power Plants of less than 25 MW size are the second largest Green Energy Source in India though with a slow growth rate of around 9% CAGR and has around 2520 MW of Capacity
3) Biomass Energy has been showing a sharp growth of 27% CAGR in recent years and almost 2.1 GW of Biomass Energy Capacity has been installed.

Supply Demand Picture of Electricity - Huge Deficit with Areas of Prolonged Blackouts

India is a Electricity Deficient Country with an estimated 15% deficient in supply during peak demand.According to CEA,India had a peak demand of around 116 MW in Apri-Dec 2009 with 101 GW of Supply resulting in a 12.5% Demand Deficit.The Fast Growing Economy has resulted in even higher demand for power which has not been met by increased demand

Total Installed Capacity By Energy Source

India’s Electricity comes mostly from Coal and Hydro Based Energy.Almost 50% of Energy Requirements and 53% of the Electricity is generated from Coal.Despite Coal being the the Dirtiest Form of Energy,India has got little choice in the matter.Most of India’s upcoming Electricity Plants are based on Coal.Hydro Energy is generated mostly from India’s Northern Himalayan States.State Run Companies NHPC and SJVN are responsible for most of the Hydro Capacity.Some private players like the JP Group are also entering the picture.India’s Nuclear Energy Capacity is quite low,however the recent India USA Nuclear Deal should improve that with India planning around 2 GW of Nuclear Capacity addition per year.Renewable Energy forms only 7.7% of the Capacity with around 11 GW of the 16 GW from Wind Energy.

Source	Capacity (in MW)	Percentage
Total Thermal	106517	64.6%
Coal	87,943	53.3%
Gas	17,374	10.5%
Oil	1,199	0.9%
Hydro	37,328	24.7%
Nuclear	4,560	2.9%
RES	16,429	7.7%
Total	1,64,835

Source – Indian Ministry of Power

Renewable Energy Incentives,Subsidies and Regulations

India like other countries has enacted a number of measures to promote Renewable Energy in India.There are a number of ministries which are involved in the process of regulation and providing subsidies to the Green Energy Sector in India.Here is a list of various Incentives provided to the Alternative Energy in India.

Tax incentives - Indian renewable energy companies are entitled to take 80.0% accelerated depreciation on assets employed in renewable energy power generation and benefit from a 10-year tax holiday.
Generation Based Incentives (GBI) - The Federal Government gives an incentive of 50 paisa per unit of wind power supplied to the grid by independent wind power producers. The incentive is limited to wind farms with a maximum aggregate installed capacity of 4,000 MW.This is over and above the state fixed electricity tariffs for Wind Energy Generation.
Preferential Tariffs - State electricity regulatory commissions (SERCS) are encouraged to set preferential tariffs for power produced from renewable energy.

Tariffs for FY2010 for certain key locations and technologies:

Biomass Energy

State                            Technology               Tariff (Rs./kWh)

Andhra Pradesh       Biomass                                        4.15

Gujarat                      Cogeneration               5.17

Madhya Pradesh        Biomass                                      3.93

Wind Energy

Wind Zone                                                                 Tariff (Rs./kWh)

Wind Zone 1 (200-250 W/m2) Wind             5.63

Wind Zone 2 (250-300 W/m2) Wind              4.90

Wind Zone 3 (300-400 W/m2) Wind              4.17

Wind Zone 4 (above 400 W/m2) Wind            3.75

Small Hydro Energy

All states except HP, Uttarakhand and NE States Hydroelectric (5-25 MW) get a Tariff of Rs 4.62

Renewable Purchase Obligations - This is the Indian name for RPS which means the obligation to purchase a fixed amount of electricity generation from renewable energy sources.Each state in India has coordinated with the Central Regulator (CERC) to fix a RPO level.
Renewable Energy Certificates (REC) - On January 14, 2010, CERC issued the Central Electricity Regulatory Commission Terms for recognition and issuance of Renewable Energy certificate for Renewable Energy Generation.You can read more about REC.
CDM/Kyoto Protocol - Indian Renewable Energy Plant Operators can also benefit from the CERs issued under the Kyoto Protocol’s Clean Development Mechanism (CDM).This improves the project returns and is a form of developed country funds transfer to developing countries in reducing carbon emissions.

Renewable Energy Potential

1) Wind Energy has a potential of around 49 GW in the country with around 12 GW of its having been already been utilized.Note this does not include offshore wind energy or future advances in wind energy leading to additional capacity.

2) Solar Energy has enough potential to meet India’s current and future energy needs by multiple times

3) Mini Hydro Plants are supposed to have a 15 GW potential out of which 2.5 GW has been realized

4) Biomass Energy has 25 GW of potential out of which around 2.1 GW has been realized.

Renewable Energy Target

India has set up ambitious targets of meeting 15% of its Energy Needs from Renewable Sources up from around 5.5-6% in 2010.WIth India’s Electricity Capacity expected to rise to 450 GW from around 165 GW,this would imply that around 67.5 GW of Electricity Capacity would be needed up from around 16 GW.This would mean around 5 GW of Capacity addition every year in the next decade which is a very tall order.20 GW could be met by Solar Energy according to the Jawaharlal Nehru Solar Mission (JNNSM).Most of the rest would have to met by Wind Energy.Biomass Energy has high costs and reliability problems which mini hydro potential is only 1 GW.Note this is just the capacity I am talking about,for meeting the electricity generation,capacity additions would have to be greater as Solar Energy and Wind Energy have only 20-30% Load Factor compared to 60-80% for Fossil Fuel Energy Sources.Nuclear Energy can contribute another 20 GW.

India’s Renewable Energy Policy and Laws

Indian Renewable Energy Companies

Renewable Energy in Different Indian States

Hydro Power in India causing Environmental,Wildlife and Tribal Rights Concerns

20 Sep, 2010

Energy,Hydro Energy,PSU

Hydro Power is being aggressively promoted in India due to its cheapness,reliability and cleanliness.Hydro Power in India accounts for around 20-25% of Installed Electricity Capacity and is expected to increase at the same rate.India is massively power deficient with around 10-15% Peak Hour Deficit.This combined with the rapid growth of the Indian Economy has made electricity demand shoot up.The government is trying to heavily support the usage of Green Sources of Energy like Small-scale Hydro,Wind,Solar and Biomass Energy.Large scale Hydro Plants are also being built by India’s large utilities like SJVN,NHPC,NTPC and others.However Hydro Plants are not without their environmental impact on the surrounding habitat and wildlife.Am improper and hurried environmental clearance can lead to huge losses and pain later as can be seen from the recent cancellation of NTPC’s 600-mw Loharinag Pala project in Uttarakhand

Govt scraps NTPC’s Uttarakhand project – Mint

India on Friday scrapped NTPC Ltd’s 600MW hydropower project in Uttarakhand. The project at Loharinag Pala has been hanging fire since early this year, when work on two other projects—the 381MW Bhaironghati project and the 480MW Pala Maneri project—were stopped as well.

The decision was taken at a meeting attended by finance minister Pranab Mukherjee, power minister Sushilkumar Shinde and environment minister Jairam Ramesh.

NTPC to review hydropower capacity addition programme – FE

State-owned power generator NTPC seems to be cautious about capacity addition through hydropower projects after the government recently scrapped its 600-mw Loharinag Pala project in Uttarakhand on resistance by some environmental groups.

NTPC has envisaged increasing its installed generation capacity to 75,000 mw from the current 32,000 mw level by 2017 and targeted 17.5% share for hydro generation capacity in its energy mix.

What is the Environmental and Human Rights Impact of Big Hydro Power Plants

Tribal Rights – Large Dam construction especially in populated areas leads to massive Tribal Displacement,Loss of Livelihood and Religious Infringement as potentially sacred Land is occupied by the Government.There has been a massive people’s movement against the Bhakra Nangal Dam Project led by Narmada Bachao Andolan.This protest which was organized by tribal people was against the large scale displacement and inadequate compensation given to the tribals inhabiting the submerged catchment area of the massive dam.The net effect on Hydro Plants is huge cost and time overruns and potential cancellation.

Wildlife Effect – The Fishes are the most affected species from Dam Construction as the normal flow of the river is completely changed form its river character to a lake one.Submergence of land also leads to ecological destruction of the habitat of land based wildlife.

Earthquake Vulnerability – Large Dam Construction has been linked to increased propensity of Earthquakes.Massive Earthquakes in China and Uttarakhand in India were linked to the building of Massive Dams in these countries.Building of Massive Man Made Structures along geologically sensitive areas has not been properly studied and understood till now

Summary

While Hydro Power is a necessity for an energy starved and growing economy like India,its effect have to be properly assessed and understood before going on a hydro binge.NTPC lost almost $300 million after its 600 MW project was cancelled 5 years after getting permission.This was done in the face of large scale protest by local groups and NGOs.2 other projects in Uttarkhand have also been rejected leading to more losses.

Papua New Guinea supply of Hydro Power via Undersea Cable to Australia seems Extremely Costly

15 Sep, 2010

Australia,Hydro Energy

Australia’s Province of Queensland and Papua New Guinea (PNG) have agreed to set up a 1800 MW Hydro Plant in PNG which would supply 1200 MW of Electricity to Queensland through an Undersea Cable.The Project.Origin Energy which is Australia’s 2nd Biggest Energy Producer will submit a feasibility document by 2012.This Electricity Project is one of the most ambitious International Cooperation Agreement in Energy as it will involve the laying down of a 250 KM Undersea Cable.PNG is a very poor isolated country with 40% of the population living below Poverty Line.Cheap Electricity might spur prosperity in this poor nation as 600 MW of the plant would be used locally.Origin Energy has some Renewable Assets with Wind Farms in South Australia and is building a large Geothermal Plant in Indonesia in partnership with India’s Tata Power.

The Project seems Extremely Costly and would need Massive Subsidies

Note this Hydro Plant will cost around $31 Billion which is quite costly at $15/watt if the the $31 Billion is used for the 1800 MW capacity.This is is almost 15x the cost of a typical Hydro Capacity and would need massive subsidies.Papua New Guinea is a poor country and might receive aid from Australia but the $31 Billion would make even the richest country balk at this price.Australia is not exactly energy deficient with massive resources of coal,wind and solar energy.In Renewable Energy the country has been quite slow with provinces like NSW and South Australia promoting renewable energy through regional subsidies.Hydro Power is the main source of Clean Power accounting for 90% of the Clean Energy Mix.The Project will take 10 years to build and their remains an outside chance that Oil Prices become so high that 24 hr Hydro Power at that time might make sense at $15/watt.

Origin Studies PNG Hydro Project to Supply Queensland – Bloomberg

Origin Energy Ltd., Australia’s second-biggest electricity and gas retailer, agreed to study the development of a hydro project in Papua New Guinea that would supply power to northern Queensland.

The venture at Wabo, 350 kilometers (217 miles) north-west of the capital Port Moresby, would have continuous-power generation capacity of about 1,800 megawatts, Origin said in a statement today. An engineering and environmental study is expected to be completed by 2012, the Sydney-based company said.

Talks about supplying power to resource projects in far north Queensland will start “very soon,” Origin spokesman Tim Scott said by telephone today. While it’s premature to project the development costs or the timing of construction, the hydropower project would be Origin’s second-biggest investment after the proposed Australia Pacific LNG venture with ConocoPhillips at Gladstone in Queensland, he said. Analysts have estimated that project may cost $31 billion.

The Papua New Guinea project would also supply power to local villages and rural communities in a country where about 40 percent of the population lives on less that $1 a day, according to estimates from AusAID, the Australian government agency responsible for managing overseas aid. The venture may help “open up significant industrial development” in the Pacific nation, Queensland Premier Anna Bligh said in the statement.

Is Blackstone Gambling $300 million on Moser Baer or India’s Growth Story

18 Aug, 2010

Coal,Energy,Hydro Energy,Solar Energy

Moser Baer Does not have a Great Track Record

Blackstone Group has made a $300 million investment in Moser Baer Projects which is a private unlisted subsidiary of Moser Baer.Note Moser Baer is one of the biggest optical disk players in the world and has been constantly churning out losses in the last 2-3 years.It made a huge bet on Solar Energy in 2008 investing haphazardly into all sorts of technology and different parts of the Supply China.Can’t say the venture proved to much of a success as it continues to bleed red ink.Its was one of the earliest customers of Applied Materials SunFab Amorphous Silicon Thin Film Equipment.That Division has been closed and Moser Baer’s investment has been written off as well.It also invested in a small polysilicon producer which also closed down.With the Chinese module makers giving even the top US and European companies a run of the money,Moser Baer has found it difficult to compete on the world stage.It has been given a new lease of life by India’s ambitious Solar Energy Mission.The domestic content requirement will give some breathing space to Moser Baer’s Solar Division.

A Rising Tide Lifts All Boats

Moser Baer started a new Electricity Power Development company with ambitious plans.It is investing in setting up 4000 MW of coal plants and 1000 MW of assorted Hydro and Solar Plants.This company also does consultancy and coal mining according to its website.Now Blackstone has decided to gamble on India’s Power Deficit Story by investing $300 million for an undisclosed stake in the company.With investment plans of $6.5 billion and parent company sinking under loads of debt,Moser Baer Projects desperately needed equity which has been provided by Blackstone.Its previous track record in Solar and Optical Media does not inspire a lot of confidence.But India’s 8-9% Growth Rate is like a Rising Tide which will lift all sorts of Boats.Blackstone is perhaps gambling more on that rather than on Moser Baer.

Blackstone to invest $300 mn in Moser Baer Projects – LiveMint

US private equity firm Blackstone Group has agreed to invest $300 million, or Rs1,350 crore, in unlisted energy firm Moser Baer Projects Pvt Ltd, the two companies said on Wednesday. Blackstone will pick up a “significant minority stake” in Moser Baer Projects, Blackstone India chief Akhil Gupta told a news conference.

Last month, Blackstone had agreed to invest $59 million for a 12.5% stake in power producer Monnet Power Company Ltd, a wholly owned unit of India’s Monnet Ispat & Energy.

Moser Baer Projects needs to spend Rs30,000 crore to build 5000 mw power plants, comprising 4000 mw of thermal, 500 mw of hydel and 500 mw of solar, by 2016, chief financial officer Sushil Bhagat said.

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