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1
Renewable Energy in India
Report Prepared by
Western Australia Trade Office India
Mumbai
93, Jolly Maker Chambers 2
Nariman Point
Mumbai - 400 021
Phone: 91-22- 6630 3973 76 Fax: 91-22- 6630 3977 January 2012
2
Index
Sr.
No.
Description Page
No.
1. Overview 3
2. Types of Renewable Energy 4
3. Biomass Energy 5
Overview
Biomass Gasifier Manufacturers in India - (Key Players)
Biomass Research Centers
Current Projects - Biomass Power Plants in India
4. Wind Energy 9
Overview
Current projects - State-level wind power
Current Projects in India
Barriers for Wind Energy in India
Opportunities
5. Geothermal Energy 15
Overview
Technology
Potential
Current Projects
Challenges (Cost and Price)
Barriers to Geothermal Energy in India
Geothermal Companies in India
Apex Bodies
6. Hydro Energy 20
Overview
Technology
Potential in India
Current Projects
Barriers
Hydro Research Centers
Apex Bodies
7. Solar Energy 26
Overview
Annual Insolation
Installed Capacity
Applications of Solar Energy
Challenges and Constraints
Latent Potential
Government Support
8. Opportunities in Renewable Energy in India 30
9. Risks 31
10. Regulatory Environment 32
11. Financing the Renewable Energy Sector in India 33
12. Conclusion 34
13. Sources of Information 35
3
Overview Emission of greenhouse gases leading to climate changes is a major concern globally. India
is among the top six contributors to green house gas emission, though per capita emission
is substantially low compared with other developed countries. Under the Kyoto Protocols terms, industrial country parties will be obligated to limit their greenhouse gas emissions by
2008-12. India has also signed the treaty and under the protocol India focuses now to drive
a clean development mechanism aimed at protecting the environment by reducing carbon
emissions. Indias energy demand is increasing with the robust growth in economy. A steady forecasted growth for manufacturing sector would need more power generation in
future. However, power generation through fossil fuels raises serious concern over the
depleting resources and environmental pollution. In light of this concern, renewable energy
is a major option in India.
Looking at the Indian economic scenario, the Indian economy continues to sustain high
growth momentum as the real GDP picked up in the year 2010-11. As per the latest
estimates released by the CSO, the real economy expanded by 8.9% during the second
quarter (July to September) of 2010-11, compared to 8.7 percent during the same period of
2009-10. Robust economic fundamentals and stringent financial measures allowed the
Indian economy to regain growth momentum quickly after the global economic meltdown.
This growth was mainly driven by the manufacturing sector with a growth rate of 16.3% in
Q4 of 2009-10 where as mining output grew by 14.0% in March, 2010 while manufacturing
grew by 10.8 % in the fiscal year 2009-10. Basically, these sectors are the major energy
consumers in any economy. The Indian economy is likely to grow at an average rate of 8
percent in the next decade led by manufacturing and service sectors, which are the major
consumers of energy. The industrial sector alone accounts for 52% of India's commercial
energy consumption.
The current status of renewable energy in India is highlighted below.
There is a lot of scope for investments in solar energy sector and Government of India is taking all the necessary measures to promote the solar energy generation in the country.
Wind energy, the fastest growing renewable energy source, accounts for over 70% of the total installed renewable energy generation capacity. A cumulative capacity of 10,891 MW
has been set up so far (as on October 31, 2009). This makes India as the fifth largest
producer of wind energy in the world.
50,000 MW Hydro Initiative was launched by the government in 2003 as a part of the energy security program. Out of the proposed 162 projects, 77 projects totaling a capacity
of about 37,000 MW were undertaken. All these projects are likely to be operational by the
end of 12th plan (2012-17).
India has been able to utilize only around 35% of the potential of biomass energy and has a future potential for almost 12 million biomass plants.
Globally, India ranks 5th, in terms of exploitable hydro-potential and 4th in wind power generation. Hence, there is a huge potential capacity ready to be explored in this sector by
entities like manufacturers and project consultants.
4
Types of Renewable Energy
1. Biomass Energy
2. Wind Energy
3. Geothermal Energy
4. Hydro Energy
5. Solar Energy
5
Biomass Energy
Overview
Being an agrarian country there is easy availability of agricultural based mass which can
be used to generate energy burning this biomass is the easiest and oldest method of
generating energy and also the least efficient.
Over 70% of the population of India is in villages but it is these villages which receive
neither electricity nor a steady supply of water-crucial to survival and economic and
social development and growth. No educational facilities for higher studies exist in these
villages and neither can we find sophisticated hospitals or industries, all because of lack
of electricity and water.
Biomass exists in these villages and needs to be tapped intelligently to provide not only
electricity but also water to irrigate and cultivate fields to further increase production of
biomass (either as a main product or as a by-product), ensuring steady generation
of electricity. An added bonus is the availability of waste biomass from the biomass gasifier plant to be used as fertilizer.
Most common source of biomass is wood waste and agricultural wastes. In India
development of biomass gasification has received serious attention with establishment
of biomass research centers and gasifier action research centers at various locations
spread all over the country. These institutions have played a key role in upgradation and
adaption of suitable technologies, testing, monitoring and development of biomass
gasification systems. Studies reveal that the low grade of land suitable only for
scrub vegetation can be turned to advantage and form an excellent source of biomass fast growing trees and shrubs.
In India more than 2000 gasifiers are estimated to have been established with a
capacity in excess of 22 MW and a number of villages have been electrified with biomass
6
gasifier based generators. MNES has actively promoted research and development programs for efficient utilization of biomass and agro wastes and further efforts are on.
Biomass gasification offers immense scope and potential for:
Water pumping
Electricity generation : 3 to 1 MW power plants
Heat generation : for cooking gas smokeless environment Rural electrification means better healthcare, better education and improved
quality of life.
Biomass Gasifier Manufacturers in India - (Key Players) Ankur Scientific Energy Technologies Private Limited
Near Old Sama Jakat Naka
Baroda 390009
http://www.ankurscientific.com/
M.M. Fabricators & Engineers
248, 3rd Phase, III Cross
Peenya Industrial Area
Bangalore 560058
Associated Engineering Works
P B 17 Chivatam Road
Tanuku 534211
http://www.aewgasifiers.com/
Orissa Renewable Energy Development Agency
S 559 Mancheshwar Industrial Estate
Bhubaneswar 751010
http://www.oredaorissa.com/
Power Waves Industries
E 17 Industrial Area
Phase VII
Mohalli 160066
Electrotech
E 61, Industrial Area, Phase VIII
SAS Nagar
Mohalli 160066
Universal Electricals
D 156 Industrial Area
Phase VII
Mohalli 160066
Biofuel Techniques
1974 gali No 14
7
Dasmesh Nagar, Gill Road
Ludhiana 141003
Cosmo Products
Ashoka Complex, Pachpedi Naka
Dhamtari Road
Raipur 492001
Grain Processing India Pvt. Ltd.
29 Strand Road
Kolkata 700001
Confabs Thermos Systems Pvt. Ltd.
14 Cambridge Road
Ulsoor
Bangalore 560008
Girnar Chemicals & Gas India Pvt. Ltd.
8 Pushpak, New Girdhar Park Society
Ambawadi
Ahmedabad 380006
Biomass Research Centers National Botanical Research Institute
Rana Pratap Marg
Lucknow 226001
http://www.nbrienvis.nic.in/
High Altitude Plant Physiology Research Centre
Garhwal University
Srinagar 246174
School Of Biological Sciences
Madurai Kamaraj University
Madurai 625021
http://www.genomicsmku.org/
College Of Technology & Agricultural Engineering
Rajasthan Agriculture University Campus
Udaipur 313001
http://www.ctae.ac.in/
Regional Plant Resource Centre
Nayapalli
Bhubaneswar 711012
http://www.rprcbbsr.com/
Tata Energy Research Centre
7 Jorbaugh
Lodhi Road
New Delhi 110003
8
http://www.teriin.org/index.php
Department of Botany
University of Calicut
Calicut University PO
Kerala 673635
http://www.universityofcalicut.info/index.php?option=com_content&task=view&id=49&Item
id=129
School Of Life Science
Ravishankar University
Rakpur 492010
Department Of Botany
Vishwa Bharti
Ratnapalli
Santiniketan 731235
Current Projects - Biomass Power Plants in India
Power Plant Producer Location State Total Capacity
(MW)
Akaltara Power
Ltd.
KVK Energy &
Infrastructure
Ltd.
Janjgir Champa
District Chhattisgarh 1 X 20 MW
Malavalli Power
Plant
Ambience
Management
Services Pvt.
Ltd. and the
Karnataka
Renewable
Energy
Department.
Malavalli Karnataka 1 X 4.5 MW
Samalkot Mill
Nava Bharat
Ventures Ltd. Samalkota Andhra Pradesh 1 X 9 MW
Satya Maharshi
Power
Corporation Ltd.
Velcan Energy
India Ltd. Hyderabad Andhra Pradesh 1 X 7.5 MW
Thoothukkudi
Ind-Barath
Energies Ltd. Thoothukkudi Tamil Nadu 1 X 20 MW
9
Wind Energy
Overview
The Indian wind energy sector has an installed capacity of 11807.00 MW (as on March 31,
2010). In terms of wind power installed capacity, India is ranked 5th in the World. Today
India is a major player in the global wind energy market.
The potential is far from exhausted. Indian Wind Energy Association has estimated that with
the current level of technology, the on-shore potential for utilization of wind energy for electricity generation is of the order of 65,000 MW. The unexploited resource availability has
the potential to sustain the growth of wind energy sector in India in the years to come.
The worldwide installed capacity of wind power reached 157,899 MW by the end of 2009.
USA (35,159 MW), Germany (25,777 MW), Spain (19,149 MW) and China (25,104 MW) are
ahead of India in fifth position. The short gestation periods for installing wind turbines, and
the increasing reliability and performance of wind energy machines has made wind power a
favored choice for capacity addition in India.
Suzlon, as Indian-owned company, emerged on the global scene in the past decade, and by
2006 had captured almost 7.7 percent of market share in global wind turbine sales. Suzlon
is currently the leading manufacturer of wind turbines for the Indian market, holding some
52 percent of market share in India. Suzlons success has made India the developing country leader in advanced wind turbine technology.
10
Current projects - State-level wind power
There is a growing wind energy installations in a number of states across India.
Tamil Nadu (4906.74 MW)
India is keen to decrease its reliance on fossil fuels to meet its energy demand. Shown here
is a wind farm in Muppandal, Tamil Nadu.
Tamil Nadu is the state with the most wind generating capacity: 4906.74 MW at the end of
the March 2010. Not far from Aralvaimozhi, the Muppandal wind farm, the largest in the
subcontinent, is located near the once impoverished village of Muppandal, supplying the
villagers with electricity for work.[13][14] The village had been selected as the showcase for
India's $2 billion clean energy program which provides foreign companies with tax breaks
for establishing fields of wind turbines in the area. In february 2009, Shriram EPC bagged
INR 700 million contract for setting up of 60 units of 250 KW (totaling 15 MW) wind turbines
in Tirunelveli district by Cape Energy.
Enercon is also playing a major role in development of wind energy in India. In Tamil Nadu,
Coimbatore and Tiruppur Districts having more wind Mills from 2002 onwards,specially,
Chittipalayam, Kethanoor, Gudimangalam, Poolavadi,Murungappatti (MGV
Place),Sunkaramudaku,KongalNagaram,Gomangalam, Anthiur are the high wind power
production places in the both districts.
Maharashtra (2077.70 MW)
Maharashtra is second only to Tamil Nadu in terms of generating capacity. Suzlon has been
heavily involved. Suzlon operates what was once Asia's largest wind farm, the Vankusawade
Wind Park (201 MW), near the Koyna reservoir in Satara district of Maharashtra.
Gujarat (1863.64 MW)
Samana & Sadodar in Jamanagar district is set to host energy companies like China Light
Power (CLP) and Tata Power have pledged to invest up to $189.5 million in different
projects in the area. CLP, through its India subsidiary CLP India, is investing close to $111
million for installing 126 wind turbines in Samana that will generate 100.8 MW power. Tata
Power has installed wind turbines in the same area for generating 50 MW power at a cost of
$70 million. Both projects are expected to become operational by early next year, according
to government sources. The Gujarat government, which is banking heavily on wind power,
has identified Samana as an ideal location for installation of 450 turbines that can generate
a total of 360 MW. To encourage investment in wind energy development in the state, the
government has introduced a raft of incentives including a higher wind energy tariff.
Samana has a high tension transmission grid and electricity generated by wind turbines can
be fed into it. For this purpose, a substation at Sadodar has been installed. Both projects
are being executed by Enercon Ltd, a joint venture between Enercon of Germany and
Mumbai-based Mehra group.
ONGC Ltd has commissioned its first wind power project. The 51 MW project is located at
Motisindholi in Kutch district of Gujarat. ONGC had placed the EPC order on Suzlon Energy
in January 2008, for setting up the wind farm comprising 34 turbines of 1.5 MW each. Work
on the project had begun in February 2008, and it is learnt that the first three turbines had
begun production within 43 days of starting construction work. Power from this $68.5
11
million captive wind farm will be wheeled to the Gujarat state grid for onward use by ONGC
at its Ankleshwar, Ahmedabad, Mehsana and Vadodara centres. ONGC has targeted to
develop a captive wind power capacity of around 200 MW in the next two years.
Karnataka (1472.75 MW)
There are many small wind farms in Karnataka, making it one of the states in India which
has a high number of wind mill farms. Chitradurga, Gadag are some of the districts where
there are a large number of Windmills. Chitradurga alone has over 20000 wind turbines.
The 13.2 MW Arasinagundi (ARA) and 16.5 MW Anaburu (ANA) wind farms are ACCIONAS first in India. Located in the Davangere district (Karnataka State), they have a total installed
capacity of 29.7 MW and comprise a total 18 Vestas 1.65MW wind turbines supplied by
Vestas Wind Technology India Pvt. Ltd.[
The ARA wind farm was commissioned in June 2008 and the ANA wind farm, in September
2008. Each facility has signed a 20-year Power Purchase Agreement (PPA) with Bangalore
Electricity Supply Company (BESCOM) for off-take of 100% of the output. ARA and ANA are
Accionas first wind farms eligible for CER credits under the Clean Development Mechanism (CDM).
ACCIONA is in talks with the World Bank for The Spanish Carbon Fund which is assessing
participation in the project as buyer for CERs likely to arise between 2010 and 2012. An
environmental and social assessment has been conducted as part of the procedure and
related documents have been provided. These are included below, consistent with the
requirement of the World Bank's disclosure policy.
Rajasthan (1088.37 MW)
Gurgaon-headquartered Gujarat Fluorochemicals Ltd is in an advanced stage of
commissioning a large wind farm in Jodhpur district of Rajasthan. A senior official told
Projectmonitor that out of the total 31.5 mw capacity, 12 mw had been completed so far.
The remaining capacity would come on line shortly, he added. For the INOX Group
Company, this would be the largest wind farm. In 2006-07, GFL commissioned a 23.1-mw
wind power project at Gudhe village near Panchgani in Satara district of Maharashtra. Both
the wind farms will be grid-connected and will earn carbon credits for the company, the
official noted. In an independent development, cement major ACC Ltd has proposed to set
up a new wind power project in Rajasthan with a capacity of around 11 mw. Expected to
cost around $13.3 million, the wind farm will meet the power requirements of the
company's Lakheri cement unit where capacity was raised from 0.9 million tpa to 1.5 million
tpa through a modernisation plan. For ACC, this would be the second wind power project
after the 9-mw farm at Udayathoor in Tirunelvelli district of Tamil Nadu. Rajasthan is
emerging as an important destination for new wind farms, although it is currently not
amongst the top five states in terms of installed capacity. As of 2007 end, this northern
state had a total of 496 mw, accounting for a 6.3 per cent share in India's total capacity.
Madhya Pradesh (229.39 MW)
In consideration of unique concept, Govt. of Madhya Pradesh has sanctioned another 15 MW
project to MPWL at Nagda Hills near Dewas. All the 25 WEGs have been commissioned on
31.03.2008 and under successful operation.
12
Kerala (27.75 MW)
The first wind farm of the state was set up at Kanjikode in Palakkad district. It has a
generating capacity of 23.00 MW. A new wind farm project was launched with private
participation at Ramakkalmedu in Idukki district. The project, which was inaugurated by
chief minister V. S. Achuthanandan in April 2008, aims at generating 10.5 MW of electricity.
The Agency for Non-Conventional Energy and Rural Technology (ANERT), an autonomous
body under the Department of Power, Government of Kerala, is setting up wind farms on
private land in various parts of the state to generate a total of 600 mw of power. The
agency has identified 16 sites for setting up wind farms through private developers. To start
with, ANERT will establish a demonstration project to generate 2 mw of power at
Ramakkalmedu in Idukki district in association with the Kerala State Electricity Board. The
project is slated to cost $4.7 million. Other wind farm sites include Palakkad and
Thiruvananthapuram districts. The contribution of non-conventional energy in the total
6,095 mw power potential is just 5.5 per cent, a share the Kerala government wants to
increase by 30 per cent. ANERT is engaged in the field of development and promotion of
renewable sources of energy in Kerala. It is also the nodal agency for implementing
renewable energy programmes of the Union ministry of non-conventional energy sources.
West Bengal (1.10MW)
The total installation in West Bengal is just 1.10 MW as there were only 0.5 MW additions in
2006-2007 and none between 20072008 and 20082009
Suzlon Energy Ltd plans to set up a large wind-power project in West Bengal Suzlon Energy
Ltd is planning to set up a large wind-power project in West Bengal, for which it is looking at
coastal Midnapore and South 24-Parganas districts. According to SP Gon Chaudhuri,
chairman of the West Bengal Renewable Energy Development Agency, the 50 MW project
would supply grid-quality power. Gon Chaudhuri, who is also the principal secretary in the
power department, said the project would be the biggest in West Bengal using wind energy.
At present, Suzlon experts are looking for the best site. Suzlon aims to generate the power
solely for commercial purpose and sell it to local power distribution outfits like the West
Bengal State Electricity Board (WBSEB).
Suzlon will invest around $55.5 million initially, without taking recourse to the funding
available from the Indian Renewable Energy Development Agency (Ireda), said Gon
Chaudhuri. He said there are five wind-power units in West Bengal, at Frazerganj,
generating a total of around 1 MW. At Sagar Island, there is a composite wind-diesel plant
generating 1 MW. In West Bengal, power companies are being encouraged to buy power
generated by units based on renewable energy. The generating units are being offered
special rates. S Banerjee, private secretary to the power minister, said this had encouraged
the private sector companies to invest in this field.
13
Current Projects in India
India's Largest Wind power production facilities (10MW and greater)
Power Plant Producer Location State
Total
Capacity
(MWe)
Vankusawade
Wind Park Suzlon Energy Ltd. Satara Dist. Maharashtra 259
Cape Comorin Aban Loyd Chiles
Offshore Ltd. Kanyakumari Tamil Nadu 33
Kayathar Subhash Subhash Ltd. Kayathar Tamil Nadu 30
Ramakkalmedu Subhash Ltd. Ramakkalmedu Kerala 25
Muppandal Wind Muppandal Wind Farm Muppandal Tamil Nadu 513
Gudimangalam Gudimangalam Wind
Farm Gudimangalam Tamil Nadu 21
Puthlur RCI Wescare (India) Ltd. Puthlur Andhra
Pradesh 20
Lamda Danida Danida India Ltd. Lamda Gujarat 15
Chennai Mohan Mohan Breweries &
Distilleries Ltd. Chennai Tamil Nadu 15
Jamgudrani MP MP Windfarms Ltd. Dewas Madhya
Pradesh 14
Jogmatti BSES BSES Ltd. Chitradurga
Dist Karnataka 14
Perungudi Newam Newam Power Company
Ltd. Perungudi Tamil Nadu 12
Kethanur Wind
Farm Kethanur Wind Farm Kethanur Tamil Nadu 11
Hyderabad
APSRTC
Andhra Pradesh State
Road Transport Corp. Hyderabad
Andhra
Pradesh 10
Muppandal Madras Madras Cements Ltd. Muppandal Tamil Nadu 10
Poolavadi
Chettinad
Chettinad Cement Corp.
Ltd. Poolavadi Tamil Nadu 10
14
Barriers for Wind Energy in India
Initial cost for wind turbines is greater than that of conventional fossil fuel generators per
MW installed. Noise is produced by the rotor blades. This is not normally an issue in the
locations chosen for most wind farms and research by Salford University shows that noise
complaints for wind farms in the UK are almost non-existent.
Despite the high installed capacity, the actual utilization of wind power in India is low
because policy incentives are geared towards installation rather than operation of the
plants. This is why only 1.6% of actual power production in India comes from wind although
the installed capacity is 6%. The government is considering the addition of incentives for
ongoing operation of installed wind power plants.
Opportunities
The Ministry of New and Renewable Energy (MNRE) has fixed a target of 10,500 MW
between 200712, but an additional generation capacity of only about 6,000 MW might be available for commercial use by 2012.
15
Geothermal Energy
Overview
Geothermal energy is the earths natural heat available inside the earth. This thermal energy contained in the rock and fluid that filled up fractures and pores in the earths crust can profitably be used for various purposes.[i]Heat from the Earth, or geothermal Geo (Earth) + thermal (heat) energy can be and is accessed by drilling water or steam wells in a process similar to drilling for oil. Geothermal energy is an enormous, underused heat
and power resource that is clean (emits little or no greenhouse gases), reliable (average
system availability of 95%), and homegrown (making us less dependent on foreign oil).
Geothermal resources range from shallow ground to hot water and rock several miles below
the Earth's surface, and even farther down to the extremely hot molten rock called magma.
Mile-or-more-deep wells can be drilled into underground reservoirs to tap steam and very
hot water that can be brought to the surface for use in a variety of applications.
India has reasonably good potential for geothermal; the potential geothermal provinces can
produce 10,600 MW of power. But yet geothermal power projects has not been exploited at
all, owing to a variety of reasons, the chief being the availability of plentiful coal at cheap
costs. However, with increasing environmental problems with coal based projects, India will
need to start depending on clean and eco-friendly energy sources in future; one of which
could be geothermal.
16
Technology
Mile-or-more-deep wells can be drilled into underground reservoirs to tap steam and very
hot water that drive turbines that drive electricity generators
Four types of power plants are operating today:
Flashed steam plant: The extremely hot water from drill holes when released from the
deep reservoirs high pressure steam (termed as flashed steam) is released. This force of
steam is used to rotate turbines. The steam gets condensed and is converted into water
again, which is returned to the reservoir. Flashed steam plants are widely distributed
throughout the world.
Dry steam plant: Usually geysers are the main source of dry steam. Those geothermal
reservoirs which mostly produce steam and little water are used in electricity production
systems. As steam from the reservoir shoots out, it is used to rotate a turbine, after sending
the steam through a rock-catcher. The rock-catcher protects the turbine from rocks which
come along with the steam.
Binary power plant: In this type of power plant, the geothermal water is passed through a
heat exchanger where its heat is transferred to a secondary liquid, namely isobutene,
isopentane or ammoniawater mixture6 present in an adjacent, separate pipe. Due to this double-liquid heat exchanger system, it is called a binary power plant. The secondary liquid
which is also called as working fluid should have lower boiling point than water. It turns into
vapour on getting required heat from the hot water. The vapour from the working fluid is
used to rotate turbines. The binary system is therefore useful in geothermal reservoirs
which are relatively low in temperature gradient. Since the system is a completely closed
one, there is minimum chance of heat loss. Hot water is immediately recycled back into the
reservoir. The working fluid is also condensed back to the liquid and used over and over
again.
Hybrid power plant: Some geothermal fields produce boiling water as well as steam,
which are also used in power generation. In this system of power generation, the flashed
and binary systems are combined to make use of both steam and hot water. Efficiency of
hybrid power plants is however less than that of the dry steam plants.
Enhanced geothermal system: The term enhanced geothermal systems (EGS), also
known as engineered geothermal systems (formerly hot dry rock geothermal), refers to a
variety of engineering techniques used to artificially create hydrothermal resources
(underground steam and hot water) that can be used to generate electricity. Traditional
geothermal plants exploit naturally occurring hydrothermal reservoirs and are limited by the
size and location of such natural reservoirs. EGS reduces these constraints by allowing for
the creation of hydrothermal reservoirs in deep, hot but naturally dry geological
formations.EGS techniques can also extend the lifespan of naturally occurring hydrothermal
resources. Given the costs and limited full-scale system research to date, EGS remains in its
infancy, with only a few research and pilot projects existing around the world and no
commercial-scale EGS plants to date. The technology is so promising, however, that a
number of studies have found that EGS could quickly become widespread.
17
Potential
It has been estimated from geological, geochemical, shallow geophysical and shallow drilling
data it is estimated that India has about 10000 MWe of geothermal power potential that can
be harnessed for various purposes.
Rocks covered on the surface of India ranging in age from more than 4500 million years to
the present day and distributed in different geographical units. The rocks comprise of
Archean, Proterozoic, the marine and continental Palaeozoic, Mesozoic, Teritary, Quaternary
etc., More than 300 hot spring locations have been identified by Geological survey of India
(Thussu, 2000). The surface temperature of the hot springs ranges from 35 C to as much as
98 C. These hot springs have been grouped together and termed as different geothermal
provinces based on their occurrence in specific geotectonic regions, geological and strutural
regions such as occurrence in orogenic belt regions, structural grabens, deep fault zones,
active volcanic regions etc., Different orogenic regions are Himalayan geothermal province, Naga-Lushai geothermal province, Andaman-Nicobar Islands geothermal province
and non-orogenic regions are Cambay graben, Son-Narmada-Tapi graben, west coast, Damodar valley, Mahanadi valley, Godavari valley etc.
Potential Sites:
Puga Valley (J&K) Tatapani (Chhattisgarh) Godavari Basin Manikaran (Himachal Pradesh) Bakreshwar (West Bengal) Tuwa (Gujarat) Unai (Maharashtra) Jalgaon (Maharashtra)
Current Projects
There are no operational geothermal plants in India.
Challenges (Cost and Price) Unlike traditional power plants that run on fuel that must be purchased over the life of the
plant, geothermal power plants use a renewable resource that is not susceptible to price
fluctuations.
New geothermal plants currently are generating electricity from 0.05$ to 0.08$ per kilowatt
hour (kwh).Once capital costs .Once the capital costs have been recovered price of power
can decrease below 0.05$ per kwh. The price of geothermal is within range of other
electricity choices available today when the costs of the lifetime of the plant are considered.
Most of the costs related to geothermal power plants are related to resource exploration and
plant construction. Like oil and gas exploration, it is expensive and because only one in five
wells yield a reservoir suitable for development .Geothermal developers must prove that
they have reliable resource before they can secure millions of dollar required to develop
geothermal resources.
18
Drilling
Although the cost of generating geothermal has decreased by 25 percent during the last two
decades, exploration and drilling remain expensive and risky. Drilling Costs alone account
for as much as one-third to one-half to the total cost of a geothermal project. Locating the
best resources can be difficult; and developers may drill many dry wells before they
discover a viable resource. Because rocks in geothermal areas are usually extremely hard
and hot, developers must frequently replace drilling equipment. Individual productive
geothermal wells generally yield between 2MW and 5MW of electricity; each may cost from
$1 million to $5 million to drill. A few highly productive wells are capable of producing 25
MW or more of electricity.
Transmission
Geothermal power plants must be located near specific areas near a reservoir because it is
not practical to transport steam or hot water over distances greater than two miles. Since
many of the best geothermal resources are located in rural areas, developers may be
limited by their ability to supply electricity to the grid. New power lines are expensive to
construct and difficult to site. Many existing transmission lines are operating near capacity
and may not be able to transmit electricity without significant upgrades. Consequently, any
significant increase in the number of geothermal power plants will be limited by those plants
ability to connect, upgrade or build new lines to access to the power grid and whether the
grid is able to deliver additional power to the market.
Barriers to Geothermal Energy in India
Finding a suitable build location.
Energy source such as wind, solar and hydro are more popular and better
established; these factors could make developers decided against geothermal.
Main disadvantages of building a geothermal energy plant mainly lie in the
exploration stage, which can be extremely capital intensive and high-risk; many
companies who commission surveys are often disappointed, as quite often, the land
they were interested in, cannot support a geothermal energy plant.
Some areas of land may have the sufficient hot rocks to supply hot water to a power
station, but many of these areas are located in harsh areas of the world (near the
poles), or high up in mountains.
Harmful gases can escape from deep within the earth, through the holes drilled by
the constructors. The plant must be able to contain any leaked gases, but disposing
of the gas can be very tricky to do safely.
Geothermal Companies in India
Panx Geothermal
LNJ Bhilwara - http://www.lnjbhilwara.com/
Tata Power - http://www.tatapower.com/
NTPC - http://www.ntpc.co.in/
Avin Energy Systems - http://www.avinsolar.com/Geothermal.htm
GeoSyndicate Power Private Limited - http://www.geosyndicate.com/
19
Apex Bodies
1. Geological Survey of India
Postal address
27, Jawaharlal Nehru Road,
Kolkata 700016
Telephone 91-33-22861641/65/73/72
Fax 91-33-22861656
http://www.gsi.gov.in
2. National Geophysical Research Institute, Hyderabad
Council of Scientific & Industrial Research
Uppal Road
Uppal, Hyderabad 500007,
India
Tel: +91 40 23434600
http://www.ngri.org.in/
20
Hydro Energy
Overview
Hydropower is a renewable energy resource because it uses the Earth's water cycle to
generate electricity. Water evaporates from the Earth's surface, forms clouds, precipitates
back to earth, and flows toward the ocean. The movement of water as it flows downstream
creates kinetic energy that can be converted into electricity. 2700 TWH is generated every
year. Hydropower supplies at least 50% of electricity production in 66 countries and at
least 90% in 24 countries. Hydropower is by far the single largest renewable energy source
in India, accounting for over 10% of total electricity generation. . While most of this energy
is from large hydro-electric plants, small hydro plants (up to 25 MW capacities) have also
started making a dent in India.
Technology
A hydroelectric power plant consists of a high dam that is built across a large river to create
a reservoir, and a station where the process of energy conversion to electricity takes place.
The first step in the generation of energy in a hydropower plant is the collection of run-off of
seasonal rain and snow in lakes, streams and rivers, during the hydrological cycle. The run-
off flows to dams downstream. The water falls through a dam, into the hydropower plant
and turns a large wheel called a turbine. The turbine converts the energy of falling water
into mechanical energy to drive the generator After this process has taken place electricity
is transferred to the communities through transmission lines and the water is released back
into the lakes, streams or rivers. This is entirely not harmful, because no pollutants are
added to the water while it flows through the hydropower plant.
21
Potential in India
India is blessed with immense amount of hydro-electric potential and ranks 5th in terms of
exploitable hydro-potential on global scenario. As per assessment made by CEA, India is
endowed with economically exploitable hydro-power potential to the tune of 1 48 700 MW of
installed capacity. The basin wise assessed potential is as under:-
Basin/Rivers Probable Installed Capacity (MW)
Indus Basin 33,832
Ganga Basin 20,711
Central Indian River system 4,152
Western Flowing Rivers of southern India 9,430
Eastern Flowing Rivers of southern India 14,511
Brahmaputra Basin 66,065
Total 1,48,701
In addition, 56 number of pumped storage projects have also been identified with probable
installed capacity of 94 000 MW. In addition to this, hydro-potential from small, mini &
micro schemes has been estimated as 6 782 MW from 1 512 sites. Thus, in totality India is
endowed with hydro-potential of about 2 50 000 MW.
Current Projects
Major Hydropower generating units
NAME STATE CAPACITY (MW)
BHAKRA PUNJAB 1100
NAGARJUNA ANDHRA PRADESH 960
KOYNA MAHARASHTRA 920
DEHAR HIMACHAL PRADESH 990
SHARAVATHY KARNATAKA 891
KALINADI KARNATAKA 810
SRISAILAM ANDHRA PRADESH 770
Small Hydro
In India, hydro power projects with a station capacity of up to 25 megawatt (MW) each fall
under the category of small hydro power (SHP).
Potential
India has an estimated SHP potential of about 15 000 MW.
Installed Capacity
The total installed capacity of small hydro power projects (upto 25 MW) as on 31.03.2009 is
2429.77 MW from 674 projects and 188 projects with aggregate capacity of 483.23 MW are
under construction.
22
Existing SHP Projects in India
State Wise Numbers And Aggregate Capacity Of Shp Projects (Upto 25 Mw)
Installed & Under Implementation (AS ON 31.3.2009)
Sl.
No.
State Projects Installed Projects under Implementation
Nos. Capacity
(MW)
Nos. Capacity (MW)
1 Andhra Pradesh 59 180.83 12 21.50
2 Arunachal Pradesh 81 61.32 43 25.94
3 Assam 4 27.1 4 15.00
4 Bihar 12 54.60 4 3.40
5 Chattisgarh 5 18.050 1 1.00
6 Goa 1 0.050 - -
7 Gujarat 2 7.000 2 5.60
8 Haryana 5 62.700 1 6.00
9 Himachal Pradesh 79 230.915 9 26.75
10 J&K 32 111.830 5 5.91
11 Jharkhand 6 4.050 8 34.85
12 Karnataka 83 563.45 14 85.25
13 Kerala 19 133.87 2 3.2
14 Madhya Pradesh 10 71.16 4 19.90
15 Maharashtra 29 211.325 5 31.20
16 Manipur 8 5.450 3 2.75
17 Meghalaya 4 31.030 3 1.70
18 Mizoram 18 24.470 1 8.50
19 Nagaland 10 28.670 4 4.20
20 Orissa 8 44.300 6 23.93
21 Punjab 29 123.900 2 18.75
22 Rajasthan 10 23.850 - -
23 Sikkim 16 47.110 2 5.20
24 Tamil Nadu 15 90.050 4 13.00
25 Tripura 3 16.010 - -
26 Uttar Pradesh 9 25.100 - -
27 Uttarakhand 93 127.92 33 40.35
28 West Bengal 23 98.400 16 79.25
29 A&N Islands 1 5.250 - -
Total 674 2429.77 188 483.23
23
SHP Projects Installed in the Private Sector
Sl. No. State Total
Number
Total capacity
(MW)
1 Andhra Pradesh 41 96.93
2 Assam 1 0.10
3 Himachal Pradesh 33 134.45
4 Karnataka 66 520.80
5 Kerala 2 33.00
6 Madhya Pradesh 1 2.20
7 Maharashtra 4 21.00
8. Orissa 1 12.00
8 Punjab 10 16.65
9 Tamil Nadu 1 0.35
9 Uttaranchal 9 43.30
10 West Bengal 5 6.45
Total 174 887.23
Barriers
The energy of running water has been exploited for very many years. However, traditional
approaches have suffered disadvantages due to environmental factors. For example:
Building a dam across a river floods the land that would otherwise be available for
use, alters the landscape, affects the local community that would have lived and
worked on the flooded land, alters the character of the river, and prevents the free
movement of fish;
Diverting a river affects the nature of the countryside and does not lend itself to use
on a large scale.
Permanent complete or partial blockage of a river for energy conversion is adversely
affected by variations in flow.
Building large-scale hydro power plants can be polluting and damaging to
surrounding ecosystems. Changing the course of waterways can also have a
detrimental effect on human communities, agriculture and ecosystems further
downstream.
Hydro projects can also be unreliable during prolonged droughts and dry seasons
when rivers dry up or reduce in volume.
24
Hydro Research Centers
Alps Power Technologies (P) Limited
The company is manufacturing small turbines and genset up to 1000 KW, complete with
microprocessor based static excitor system, microprocessor based digital governor, remote
operation and telemetry and telecontrol system, chartless recorder for data etc. The
company has its own manufacturing and testing facilities at its works, in Ghunna industrial
area, Saharanpur, India.
Flovel Mecamidi
Flovel Mecamidi Energy Private Limited (FMEPL) is a joint venture between Flovel MG
Holdings Private Limited, India and Mecamidi S.A., France. Promoters of Flovel MG Holdings
Private Limited along with its core team have decades of experience in marketing, design,
manufacture, supply, erection, commissioning & servicing of hydro power projects of all
types both for local as well as export markets
Karshni Intertech Pvt.Ltd.
Karshni Intertech Pvt. Ltd. is a manufacturer, wholesale supplier, exporter of hydro energy
products. Their range of products include hydro energy system components (small),
hydroelectric turbines (small), solar charge controllers, water pumping windmills, wind
energy system components (large), backup power systems, 100% renewable energy
farming , fully integrated systems.
Multitek Consortium
Multitek Consortium is a hydro energy based company located in Delhi, India. Their range of
products hydro energy system components (small), water pumps, turbine machines, gates
and hoists, penstock etc.
Nagalaxmi Industries
Nagalaxmi Industries are manufacturers of industrial structures for thermal, hydel, nuclear
power station, food industries, pharmaceutical, chemical, cement etc.
SBA Hydro Systems Pvt. Ltd
SBA Hydro Systems Pvt. Ltd is a manufacturer, wholesale supplier, exporter of hydro energy
products. Their range of products include hydro energy system components (small), hydro
energy system components (large), hydro energy systems (large), hydro energy systems
(small), hydroelectric turbines (small), hydroelectric turbines (large).
25
Apex bodies
International Association for Small Hydro (IASH)
CBIP Building Malcha Marg,
Chanakyapuri, New Delhi - 110021
Tel: 91-11-26115984 / 26882866
Fax: 91-11-26116347
http://www.iash.org/
Indian National Hydropower Association
NHPC Office Complex,
Sector 33, Faridabad-121003
Haryana, India
Phone: +91-9312009243
Fax: +91-129-2271913
http://www.nhpcindia.com/
Alternate Hydro Energy Centre
Indian Institute of Technology
Roorkee - 247 667
Uttarakhand, India
Contact Numbers:
Fax: + 91 1332-273517, 237560
Phone: + 91 1332-274254, 285213
http://ahec.org.in/
26
Solar Energy
Overview
India is densely populated and has high solar insolation, an ideal combination for using solar
power in India. India is already a leader in wind power generation (Wind power in India).
Suzlon Energy, based in India is one of the pioneering industries in the world generate non-
conventional energy, in this case, wind energy. In the solar energy sector, some large
projects have been proposed, and a 35,000 km2 area of the Thar Desert has been set aside
for solar power projects, sufficient to generate 700 GW to 2,100 GW (gigawatt).
In July 2009, India unveiled a US$19 billion plan, to produce 20 GW of solar power by 2020.
Under the plan, the use of solar-powered equipment and applications would be made
compulsory in all government buildings including hospitals and hotels. On November 18,
2009, it was reported that India was ready to launch its National Solar Mission under the
National Action Plan on Climate Change, with plans to generate 1,000 MW of power by
2013.
Annual Insolation
With about 300 clear, sunny days in a year, India's theoretical solar power reception, on
only its land area, is about 5 Peta Watt-hour per year or PWh/year (i.e. 5 trillion kWh/yr ~
600 TW). The daily average solar energy incident over India varies from 4 to 7 kWh/m2 with
about 15002000 sunshine hours per year, depending upon location. This is far more than current total energy consumption. For example, even assuming 10% conversion efficiency
for PV modules, it will still be thousand times greater than the likely electricity demand in
India by the year 2015.
27
Installed Capacity
The amount of solar energy produced in India is merely 0.4% compared to other energy
resources. The Grid-interactive solar power as of December 2010 was merely 10 MW.
Government-funded solar energy in India only accounted for approximately 6.4 megawatt-
years of power as of 2005. However, as of October 2009, India is currently ranked number
one along with the United States in terms of installed Solar Power generation capacity.
Number of solar street lighting systems: 55,795
Number of home lighting systems: 342,607
Solar lanterns: 560,295
Solar photovoltaic power plants: 1566 kW
Solar water heating systems: 140 km2 of collector area
Box-type solar cookers: 575,000
Solar photovoltaic pumps: 6,818
Name of Plant DC
Peak Power (MW) Notes
Sivaganga Photovoltaic Plant 5 Completed December 2010
Azure Power - Photovoltaic Plant 2 2009
Jamuria Photovoltaic Plant 2 2009
NDPC Photovoltaic Plant 1 2010
Thyagaraj stadium Plant-Delhi 1 April, 2010
Gandhinagar Solar Plant 1 January 21, 2011
Still Unaffordable
Solar power is currently prohibitive due to high initial costs of deployment. To spawn a
thriving solar market, the technology needs to be competitively cheaper i.e. attaining cost parity with fossil or nuclear energy. India is heavily dependent on coal and foreign oil a phenomenon likely to continue until non-fossil / renewable energy technology becomes
economically viable in the country. The cost of production ranges from $0.33 to $0.67 per
unit compared to around $0.11 to $0.18 per unit for conventional thermal energy.
Solar engineering training
The Australian government has awarded UNSW A$5.2 million to train next-generation solar
energy engineers from Asia-Pacific nations, specifically India and China, as part of the Asia-
Pacific Partnership on Clean Development and Climate (APP). Certain programs are
designed to target for rural solar usage development.
Applications of Solar Energy
Rural electrification
Lack of electricity infrastructure is one of the main hurdles in the development of rural
India. India's grid system is considerably under-developed, with major sections of its
populace still surviving off-grid. As of 2004 there are about 80,000 unelectrified villages in
the country. Of these villages, 18,000 could not be electrified through extension of the
conventional grid. A target for electrifying 5,000 such villages was fixed for the Tenth
National Five Year Plan (20022007). As on 2004, more than 2,700 villages and hamlets had been electrified mainly using SPV systems. Developments on cheap solar technology
28
are considered as a potential alternative that allows an electricity infrastructure comprising
of a network of local-grid clusters with distributed electricity generation. That could allow
bypassing, or at least relieving the need of installing expensive, and lossy, long-distance
centralised power delivery systems and yet bring cheap electricity to the masses. 3000
villages of Odisha will be lighted with Solar power by 2014.
Agricultural support
Water pumping
Solar PV water pumping systems are used for irrigation and drinking water. The majority of
the pumps are fitted with a 2003,000 watt motor that are powered with 1,800 Wp PV arrays which can deliver about 140,000 liters of water/day from a total head of
10 meters. By 30 September, 2006, a total of 7,068 solar PV water pumping systems have
been installed and it can change over a period of time.
Harvest processing
Solar driers are used to dry harvests before storage.
Cooling
Another e.g. is the cost of energy expended on temperature control a factor squarely influencing regional energy intensity. With cooling load demands being roughly in phase
with the sun's intensity, cooling from intense solar radiation could be an attractive energy-
economic option in the subcontinent.
Solar water heaters
Bangalore has the largest deployment of rooftop solar water heaters in India that will
generate energy equivalent to 200 MW every day and will be the country's first grid
connected utility scale project soon.
Bangalore is also the first city in the country to put in place an incentive mechanism by
providing a rebate, which has just been increased to $1.1, on monthly electricity bills for
residents using roof-top thermal systems which are now mandatory for all new structures.
Pune, another city in the western part of India, has also recently made installation of solar
water heaters in new buildings mandatory.
Challenges and Constraints
Land scarcity
Per capita land availability is a scarce resource in India. Dedication of land area for exclusive
installation of solar cells might have to compete with other necessities that require land. The
amount of land required for utility-scale solar power plants currently approximately 1 km2 for every 2060 megawatts (MW) generated could pose a strain on India's available land resource. The architecture more suitable for most of India would be a highly distributed,
individual rooftop power generation systems, all connected via a local grid. However,
erecting such an infrastructure which does not enjoy the economies of scale possible in mass utility-scale solar panel deployment needs the market price of solar technology deployment to substantially decline so that it attracts the individual and average family size
29
household consumer. That might be possible in the future, since PV is projected to continue
its current cost reductions for the next decades and be able to compete with fossil fuel.
Slow progress
While the world has progressed substantially in production of basic silicon mono-crystalline
photovoltaic cells, India has fallen short to achieve the worldwide momentum. India is now
in 7th place worldwide in Solar Photovoltaic (PV) Cell production and 9th place in Solar
Thermal Systems with nations like Japan, China, and the US currently ranked far ahead.
Globally, solar is the fastest growing source of energy (though from a very small base) with
an annual average growth of 35%, as seen during the past few years.
Latent Potential
Some noted think-tanks recommend that India should adopt a policy of developing solar
power as a dominant component of the renewable energy mix, since being a densely
populated region in the sunny tropical belt, the subcontinent has the ideal combination of
both high solar insolation and a big potential consumer base density. In one of the analyzed
scenarios, while reining on its long-term carbon emissions without compromising its
economic growth potential, India can make renewable resources like solar the backbone of
its economy by 2050.
Government Support
The government of India is promoting the use of solar energy through various strategies. In
the latest budget for 2010-11, the government has announced an allocation of US $217
million towards the Jawaharlal Nehru National Solar Mission and the establishment of a
Clean Energy Fund. It's an increase of US$82.5 million from the previous budget. Also
budget has also encouraged private solar companies by reducing customs duty on solar
panels by 5 percent and exempting excise duty on solar photovoltaic panels. This is
expected to reduce the roof-top solar panel installation by 15- 20 percent. The budget also
proposed a coal tax of USD 1 per metric ton on domestic and imported coal used for power
generation. Additionally, the government has also initiated Renewable Energy Certificate
(REC) scheme which is designed to drive investment in low-carbon energy projects.
30
Opportunities in Renewable Energy in India India is the fifth largest generator of power in the world (170 GW) however per capita
consumption is 30% of the world average - this will change following the growth trajectory
of the country and new capacity will be needed at unprecedented rates.
Renewable energy can supply a large part of this capacity, offering greater energy
security, access to those who currently lack it and create a vibrant new industrial
sector.
India is emerging as a world leader in this sector with a total installed capacity of 17
GW and has set a target to achieve 74 GW of grid-connected renewable energy
capacity by 2022.
The market in India for the renewable energy business is growing at an annual rate
of 15%. The scope for private investment in renewable energy is estimated to be
about USD 34 billion. Wind, solar and biomass all have huge potential.
Energy generation and transmission efficiency are also critical to India's long-term
energy security. There are opportunities all along the power sector value chain, as
only 25% of the primary energy used in coal-fired power plants reaches the end
user.
Lucintel's new market study, "Indian Energy Sector: Macro-Economic & Risk Analysis-Risk,
Potentialities and Opportunities", analyzes and identifies India's energy sector and outlines
its areas of opportunity in the coming decade.
India's coal production is expected to grow at a CAGR of 4% from 2009 to 2020. The
natural gas sector has gained increased importance in India, especially over the last decade.
The share of natural gas in the energy mix for India is expected to be approximately 25%
by 2025. The oil segment is also a major contributor of the primary energy mix. India
already imports over 75% of its crude oil requirements. Energy consumption from all
sources is expected to increase significantly in the coming years. According to Lucintel's
analysis, the Indian energy sector is likely to grow fourfold by 2020. The Working Group on
Power for the ninth Five Year Plan (2007-12) has estimated a total investment of $170
billion in the Indian electricity sector.
During the nineteenth and twentieth century economic growth was basically driven by
technology, though energy played a major role. Now, in the age of science and information
technology, the world is once again exploring alternative sources of energy and trying to
manipulate various energy sources to produce economic outputs. Availability of energy is
the key to sustaining economic development. The availability of commercial energy has a
direct impact on the quality of services in the fields of education, health and food security.
Macroeconomic health of a country requires long-term supplies of energy that are reliable,
sustainable and affordable.
Coal energy is the major contributor to the Indian energy mix. However, the relative
percentage of the consumption of coal and oil is likely to fall in energy mix, as the
consumption of natural gas, nuclear energy and renewable energy is likely to increase at a
more rapid rate by 2020. The total primary energy consumption is 514 Mtoe (Million Tonnes
Oil Equivalent) while it is likely to grow to about 1000 Mtoe by 2020.
If we look at the pattern of energy production, coal and oil account for 54% and 34%
respectively with natural gas, hydro and nuclear contributing to the balance. In power
generation, coal contributes nearly 62%, while 70% of the coal produced every year in India
is used for thermal generation. Looking at the past trend and future optimistic view on
31
economic growth, it is estimated that the consumption of primary energy is likely to grow
faster than expected. More specifically, the growth rate of electricity consumption is likely to
grow faster than the growth of GDP. If one considers the correlation between GDP growth
and electricity consumption in the country, it is less than one at present. However, this
correlation may not likely to hold true with a higher growth projection for GDP. When the
economy grows at a faster rate, the industrial sector is bound to increase at a faster pace
and thus, demand for electricity is likely to grow at a much faster rate than expected.
Approximately 400 million people are still living without electricity, which will boost
investment in this segment to fulfill the dream of providing electricity to all.
Risks The next ten years will see an economic transformation, with India's growth rate expected
to surpass that of China as soon as next year. Growing its economy at this rate under a
business-as-usual (BAU) scenario means India's demand for energy will continue to increase
exponentially, and by 2030 energy production could need to expand six-fold to keep pace.
Even today, India spends 45% of export earnings on energy imports. By 2020 over 35% of
the energy it consumes is expected to come from outside the country, making it vulnerable
to external price changes.
Climate security is a further hurdle with India being the most vulnerable of all the G20
nations to climate change, not to mention the rising levels of local pollution associated with
fossil fuel consumption. Climate change presents all countries with risks and opportunities.
But given India's size and current rate of growth, these are amplified enormously on both
the upside and the downside.
India is directly affected by climate change, which is increasingly posing a threat to
livelihoods that are already faced with the costs of adaptation. However, the risks of climate
change are far outweighed by the opportunities that arise. It is important for the country's
government and business leaders to seize the opportunities for clean growth. These
opportunities will improve local air quality, bolster energy security and save costs, while
contributing to global efforts to mitigate climate change. A clean industrial revolution will be
the only way to maintain growth while addressing these concerns.
By 2020 global markets for low carbon goods and services are expected to be worth USD 1
trillion with exponential growth thereafter. In the next decade, India's share of the global
low carbon market could balloon to USD 135 billion. Its compound annual growth rate of
17% is predicted to outstrip Europe, North America, China and the rest of the world. Only
China and the US are likely to attract more clean energy investment in the next ten years
but the rate of increase of India's private investment (763%) will be three times the rate of
either of these two competitors8. Such rapid increases in the rates of investment underline
India's current stage of industrial development but show the enormous potential of its
burgeoning economy.
However, given current levels of energy inefficiency in India the biggest opportunities are
likely to be in India's energy efficiency market which will treble to USD 77 billion in the next
10 years driven by demand in industry, buildings, energy storage and transport. The short
payback periods and negative net abatement costs for energy efficiency measures will
underpin economic growth. Investments in energy efficiencies are expected to provide
higher returns per unit of investment than any other part of India's low carbon economy.
With an investment of USD 10 billion in energy-efficiency improvements, India's economy
would benefit from its potentially vast annual energy savings of 183.5 billion kWh hours
32
equivalent to USD 25 billion at 5/kWh (-USa o.l/kWh) and 148.6 million tons of avoided
carbon dioxide (CO2) emissions per annum.
India is in a good position to reap the benefits of a possible 10.5 million green jobs. Large,
small and medium scale enterprises in India are also increasingly realizing the opportunities
presented by clean development. But there is potential for business to be much more
involved and for India to grow business leaders who will play an important global role in the
new low carbon economy.
By acting now, India can get ahead of the curve and provide technology solutions which will
benefit business and industry, support foreign investment, improve global competitiveness,
reduce reliance on dwindling and imported resources, save energy costs and reduce the
impact of capital spending on installations that will be around for a long time. Remarkable
progress has already been made and India has all the ingredients to benefit from the
opportunities offered by addressing climate change. The Government of India recognizes
these advantages and is taking a leading role in driving low carbon development in both
international and domestic arenas, with the 2008 National Action Plan on Climate Change
and its constituent Missions providing a range of key regulations and incentives for low
carbon growth.
Regulatory Environment The Government of India has introduced the Integrated Energy Policy, which aims to bridge
the prevailing gap in the demand and supply of energy for the short, medium and long term
perspectives. The Government has started promoting competition between private and
public players wherever possible in the energy market. The motivation behind this Energy
Policy is to meet the demand for energy services for all sectors at competitive prices, while
ensuring that all households are provided with electrical power. The demand should also be
met through safe, clean and convenient forms of energy at the least-cost in a technically
efficient, economically viable and environmentally sustainable manner.
With the Electricity Act 2003, the government of India is making it mandatory for the State
Electricity Regulatory Commissions (SERC) to set targets for distribution companies to
purchase a certain percentage of their total power requirement from renewable energy
sources called Renewable Purchase Obligation (RPO) However, this RPO is not clear about
the interstate transfer of renewable energy.
The RPO doesn't provide proper guidelines to the states to bridge the gap between surplus
and deficit energy as per required RPO targets.
To overcome this problem, the government of India devised a new policy in 2010 entitled
the Renewable Energy Certificate (REC) Mechanism. The REC Mechanism will enable and
recognize interstate renewable energy transactions which will further promote and develop
renewable energy sources.
The REC Mechanisms is a new policy in India which will address the mismatch between
availability of standard renewable energy resources in state and the requirement of the
obligated entities to buy renewable energy for meeting the renewable purchase obligation
(RPO). The policy is a market based instrument designed to promote renewables in India,
which will help renewable energy producers sell electricity to power distribution companies
other than those that are in their own state. The REC demonstrates that an electricity
generator has produced a certain quantity of power from a renewable energy source such as
wind, solar, biomass, waste to energy etc. Technically one REC is treated as equivalent to 1
MWh. Under this mechanism, the states with RPO targets requiring the purchase of
33
renewable energy can obtain an REC to satisfy its RPO target requirements. This mechanism
is also present in numerous other countries, including Italy and the USA, though these
policies are structured differently to meet the needs of their respective local economies. This
mechanism will clearly benefit India's renewable energy companies, such as Suzlon Energy,
Vestas, and TATA-BP Solar. This mechanism may also prove helpful in providing support in
meeting the 15% renewable energy target, established by the Central Electricity Regulatory
Commissions (CERC), by 2020.
Business and investment activities in the energy sector are likely to grow substantially in
India. International investors are looking for opportunities to invest in the Indian energy
sector. Considering the energy demand, the sector needs an investment of approximately
160 billion US dollar in the next five years. India has been trying to improve its efficiency in
all segments of the energy sector, regardless of whether it is conventional or renewable
energy. As a result, India's energy sector is witnessing a steady increase in foreign
investment and business arrangements for the import, licensing and use of energy-related
technologies from other parts of the world.
Financing the Renewable Energy Sector in India The global market for low carbon goods and services could be worth some USD 2.2 trillion
by 2020 with India's share rising to USD 135 billion.
India's Clean Revolution will attract billions of dollars of fresh investment, offering
opportunities for the country's public and private financial institutions to create new
products and services.
USD 60 billion will need to be invested to meet India's renewable energy targets with
banks acting as conduits for both domestic and international investors.
Unique models of funding have emerged: private-equity funds have already invested
more than USD 300 million in dedicated renewable-energy-based platform
companies. The challenge now is to scale them up with public-private partnerships
likely to be center-stage.
Financing of ESCOs to advance energy efficiency and conservation has faced
difficulties with scalability but increasing awareness and regulatory impetus is
expected to make the financing of energy efficiency a significant business
opportunity.
Success in achieving a Clean Revolution will depend on the availability of adequate financing
to mobilize investment in renewable technologies and energy efficiency. This challenge
running into the trillions of dollars presents a huge opportunity for banks, insurers, asset
managers and other investors in what is already a rapidly growing market. HSBC, for
example, estimates that the global market for low carbon goods and services could be worth
about USD 2.2 trillion by 2020.
Unique models for funding renewable energy and energy efficiency are emerging in pursuit
of the opportunities but considerable development of these will be needed for India to be
able to fund and capitalize on all the potential which the Clean Revolution has in store. With
its relatively mature financial markets, entrepreneurial spirit and access to both domestic
and global markets, India is particularly well positioned to take advantage of this growth. In
this chapter we see the potential opportunity which a clean industrial revolution offers to the
Indian financial-services industry and how some pioneers are already leading the way.
34
Conclusion The government and businesses leaders in India are moving increasingly quickly towards a
Clean Revolution in their country.
This is a revolution that will help achieve India's energy, economic, environmental and
developmental objectives in a way that is sustainable. This is not easy given the enormous
size of India's population and the scale at which its economy is currently developing.
But by focusing on energy efficiency and renewable energy India's climate leaders are
demonstrating that economic, social and environmental objectives are not mutually
exclusive.
India's size, stage of economic development and entrepreneurial business community mean
that it is well placed to leapfrog along the high growth, low carbon development pathway.
The reward for success includes energy savings for businesses and households, improved
international competitiveness, increased energy security, improved local air quality and the
possibility to provide off-grid electricity to its vast unconnected rural population. With its
eye on a Clean Revolution, the government of India hopes to reap these benefits, as
follows:
Ample renewable energy sources are available and can contribute to the long-term
energy security of the country - the country has a long-term renewable energy policy
in place which will ensure significant opportunities for the technology, business and
financing sectors of the country.
The developmental need of supplying power to remote areas overlaps with low-
carbon power generation, for example through off-grid renewable energy.
By promoting energy efficiency, India will be able to maximize the availability of
electricity and simultaneously reduce its carbon intensity.
The government's policy includes the goal of shifting away from importing
technology and know-how towards local production, further benefiting the economy.
India's world class ICT sector is particularly well placed to support energy efficiency
in other sectors through the application of 'smart' technologies.
Meeting India's target of adding approximately 40-55 GW of renewable energy capacity, as
set out in its 13th Five Year Plan; will result in a financing opportunity worth USD 60 billion
over the next decade. In addition, there is the potential for market-based approaches to
unlock energy efficiency opportunities amounting to around USD 16.5 billion.
This indicates the enormous advantages in being part of India's clean revolution - whether
on the financing side, in the development of renewable technologies, in the provision of
energy efficient measures or in the development of clean applications in transport,
buildings, appliances, lighting and the ICT sector.
What are needed now are not so much new technology options, but rather good business
models with functioning marketing and distribution channels, service and maintenance
networks as well as financing options. There remains a lack of awareness in India with
regard to various clean technologies and there is a perceived risk in the regulatory
environment, ranging from the continued provision of subsidies and incentives to the value
of COM in the post-2012 environment. Other challenges are the typically smaller project
sizes in energy-efficiency projects and the longer payback periods for renewable-energy
projects. Finally, constant technological evolution carries accompanying risks of
obsolescence. All these challenges are frequently cited as barriers to low carbon financing.
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But considerable progress has already been made thanks to government policies and
favorable subsidy and fiscal incentives. Significant steps are being taken by government and
the private sector. India is well-placed by virtue of the stage of its development to reap the
rewards of its high growth, low carbon goals. It increasingly has the infrastructure and
resources as well as the technological, financial and human capacity that are needed to
ensure success. Technological advances have resulted in competitive production costs,
innovative financing mechanisms are emerging and numerous examples of best practice
exist as this report has demonstrated.
With advances at all levels, particularly in resolving financing needs, the country's Clean
Revolution is set to take off in a way that will benefit the global community, both through
mitigating emissions and through developing clean solutions that are useful everywhere.
Sources of Information
1. Indias Clean Revolution The Climate Group 2. EQ International.
3. Reports by Ernst & Young and McKinsey.
4. Various sources from the internet.
http://www.ibef.org/
http://www.wikipedia.org/
http://www.indiasolar.com/index.htm
http://www.eai.in/ref/ae/geo/geo.html