No economic reason for environment-friendly technologies, such as wind power, to be expensive
India's wind power potential is an estimated 45,000 megawatt (mw). Out of this, sites identified with techno-commercial feasibility and ready and available for implementation is 13,000 mw. The energy is clean; a wind power unit requires a gestation period of just 6-12 months. Also, the cost is about the same as thermal power units -- Rs 4 crore per mw generated. That is not all: wind power units require far less infrastructure and the operation and maintenance costs of the plants are much lower. They can be run by the private sector -- a far better option than already-stressed public sector units.
In spite of so many advantages, it is quite puzzling that wind energy costs Rs 4 per kilowatt hour (kwh) while thermal power costs Rs 2.50 per kwh. This huge disparity in pricing is the main factor in deterring the development of this renewable energy. The disparity is largely because the Capacity Utilisation Factor (cuf) of wind electricity generation units in India is 20-30 per cent, while that of thermal power plants is 70-80 per cent. This means that yearly sales by wind energy units range between 1.7-2.7 million kwh/mw -- depending on cuf -- while that of thermal power stations vary between 6-7 million kwh/mw. Suitable windy sites backed by technical support can generate more energy at higher cuf and reduce energy prices. Germany, with total installed capacity of 33,000 mw, has recorded a cuf higher than 40 per cent and wind energy costs here match that of conventional power. It is no different in usa, Denmark, and Spain.
Raising the cuf above the existing limits in India requires increasing the heights of towers beyond the current 25-30 meters. This is a technological challenge. Another necessity is to devise a better financial package to overcome the impact of capital investment in fixed charges, in-built in energy pricing. These two have to go hand-in-hand to boost the country's wind energy program.
To raise the cuf to 30 per cent from the present 20 per cent will take time. But once cuf settles at 25 per cent, the energy price per unit would go down from the current from Rs 3.92 to Rs 2.94. This is because 25 per cent more energy can be sold now. There is further scope of scaling down: if interest charged on loans for setting up wind power installations go down from the current rate of 12 per cent, per unit cost of energy will lower further. The government should also come forward to provide an interest subsidy of about 3 per cent. All this would result in the overall pricing of wind energy at Rs 2.54 per unit.
To expedite exploitation of wind potential, there is need for concerted efforts from all concerned including financial institutions, manufacturers, promoters and government. Today, the 77,000 mw of thermal power installations in the country generate around 500 billion units annually, so is it not rational to charge Rs 0.05 per unit as contribution towards developing wind and other renewable energy resources? This will lead to a mobilisation of Rs 2,500 crore annually. Levies have been introduced on automobiles fuels to build roads. Similarly, there is good reason to impose extra charges on fossil fuel users to help non-fossil fuel energy grow. Many developed countries have adopted similar measures. The Clean Development Mechanism mooted by the Kyoto Protocol is based on a similar philosophy.
India should not hesitate to act, and decide the quantum of levy at the earliest. This should be accompanied by suitable financial packages to attract entrepreneurs to invest in renewable energy sources.
C R Bhattacharjee is a retired chief engineer associated with the power supply industry. He is currently a consultant on the economics of energy generation from renewable sources
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