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Gujarat Power Project

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Wind energy potential in the state of Gujarat
Gujarat is one of the richest and second most industrialised states in India. The rapid economic growth has fuelled a strong demand for power in the state. Despite a healthy growth in capacity additions, the state constantly reels under severe peak power deficits (25% to 30%). In order to meet the energy requirements in the state the Government of Gujarat (GoG) has recognised the high potential for wind energy (as illustrated in exhibit 10 of section 3.1) and has adopted favourable policy measures to boost the investment in the sector.

Gujarat - Economic profile
Situated on the west coast of India, Gujarat is one of the leading industrial states of the country. It covers a geographical area of 1,96,024 sq km and accounts for 5.96% of the total area of India and has a population of over 50 million accounting for about 5% of the total population of India. It is also one of the richest states in India and is also the fastest growing with the Gross state domestic product (GDSP) growing at a CAGR of 10.2% between FY06 to FY09. Gujarat is also the second most industrialized state (next only to Maharashtra) in India accounting for 16% of the total industrial production in India. The manufacturing sector has been the backbone of Gujarat’s growth and development. The state’s recognition as a manufacturing hub is supported by the presence of more than 800 large industries, 2,200 medium enterprises and 312,000 small enterprises. Contributing to more than 30 per cent of total manufacturing and exports of Gujarat, the small and medium enterprise (SME) sector has played a key role in shaping the manufacturing industry.

Power sector in Gujarat
The per capita consumption of power in Gujarat is 1,354 units which is nearly double of the national average of 705 units. However, given the strong industrial growth in Gujarat, the demand for power is still growing at a fast pace. The demand for power grew from 8,074 MW in FY02 and FY07 at a CAGR of 7%. The strong growth momentum is expected to continue leading to a demand of 14,031 MW by FY12 and 18,478 MW by FY17.
The capacity in the power sector in Gujarat is also increasing at a fast pace due to the proactive and investor-friendly policy of the Gujarat government. Gujarat added power generation capacity of about 2,200 MW between FY07 and FY09 which is the highest for any state. The installed power capacity in the state leapfrogged from 8,079 MW in February 2007 to 10,290 MW in June 2009, implying an increase of 27%. However, even with strong expansion of capacity, the state still reels under acute power shortage. Gujarat had the highest peak power deficit among all the states in India. The peak power deficit in Gujarat was 30.2% in FY07 and 26.7% in FY08.

Wind energy in Gujarat
Gujarat is one of the highest potential states for wind energy in India with an estimated potential of 10,645 MW based on data collected by Center for Wind Energy Technology. However, the development of wind energy in Gujarat was slow in the beginning with only 636 MW capacity installed till March 2007. To encourage wind energy, the Gujarat Government issued the Wind Energy Policy in May 2007 to provide incentives to Private investors.

The Wind Power Policy - 2007 of Gujarat includes:

Incentives for Wind Turbine Generators for a period of 20 years
Provision for wheeling electricity at 4 per cent charge
Provision to sell power to any entity at higher prices i.e. third party sale
Exemption from electricity duty and demand cut to the extent of 30 per cent and
Raising the rate of sale of power to Gujarat Urja Vikas Nigam Limited (GUVNL) to Rs 3.37 per unit.

As a result of these Government initiatives, the growth has picked up in the recent years with 616 mw new capacity during the financial year 2007-08, the highest by any state in that year. In fact, Gujarat accounted for 38 per cent of India's total wind power capacity addition of 1,636 mw in that year. Gujarat was conferred with the ‘Best Wind Power Developer State in India’ award by the World Institute of Sustainable Energy (WISE) for registering maximum increase in installed Wind Energy Power generation during 2007-08. The high potential for wind energy in Gujarat was further reinforced during the “Vibrant Gujarat Investors conference” in 2009.

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