India's Renewable Future: Challenges and Prospects
Feb 20, 2011 - Dr. Farooq Abdullah - RenewableEnergyWorld.com
New Delhi, India -- India is perceived as a developing country, but it is
developing at a pace that is not matched by many others. We have experienced
significant economic growth. Yet the fact remains that our growth is constrained
by energy supply and availability. Although we have seen an impressive increase
in installed capacity addition, from barely about 1,350 MW at the time of independence
(1947) to about 160,000 MW today, over 90,000 MW of new generation capacity
is required in the next seven years. A corresponding investment is required
in transmission and distribution.
The increasing appetite for energy that has developed in the recent past has
been further complicated by rapidly diminishing conventional sources, like
oil and coal. To further add to the problems of increased demand and constrained
supply, there are serious questions about pursuing a fossil fuel-led growth
strategy, especially in the context of environmental concerns. The challenge
facing a developing nation such as ours is to meet our increasing energy needs
while minimizing the damage to the environment.
This is why, while striving to bridge our energy deficit, we want to increase
the share of clean, sustainable, new and renewable energy sources. Whether
or not renewable energy completely replaces fossil fuel, we are determined
to develop renewable energy to its fullest potential.
Driving inclusive growth
India today stands among the top five countries in the world in terms of renewable
energy capacity. We have an installed base of over 15 GW, which is around 9%
of India’s total power generation capacity and contributes over 3% in
the electricity mix. While the significance of renewable energy from the twin
perspectives of energy security and environmental sustainability is usually
well appreciated, what is often overlooked, or less appreciated, is the capacity
to usher in energy access for all, including the most disadvantaged and the
remotest of our habitations.
In its decentralized or stand alone avatar, renewable energy is the most appropriate,
scalable, and optimal solution for providing power to thousands of remote and
hilly villages and hamlets. Even today, millions of decentralized energy systems,
solar lighting systems, irrigation pumps, aero-generators, biogas plants, solar
cookers, biomass gasifiers, and improved cook stoves, are being used in the
remotest, inaccessible corners of the country. Providing energy access to be
most disadvantaged and remote communities can become one the biggest drivers
of inclusive growth.
The National Solar Mission
The Sun is the ultimate source of energy. The National Action Plan on Climate
Change in June 2008 identified the development of solar energy technologies
in the country as a priority item to be pursued as a National Mission. In November
2009, the Government of India approved the Jawaharlal Nehru National Solar
Mission. This is a unique and ambitious transformational objective that aims
to establish India as a global leader in solar energy by creating the policy
conditions for its diffusion across the country, as quickly as possible.
The Mission aims to enable 20,000 MW of solar energy to be deployed in India
by 2022 by providing an enabling policy framework. By leveraging domestic and
foreign investments, this framework will facilitate and provide the foundation
for the private sector to participate whole-heartedly and to engage in research
and development (R&D), manufacturing and deployment, making this sector
globally competitive. This is the largest and the most ambitious programme
of its kind anywhere in the world. The Mission is technology-neutral, allowing
technological innovation and market conditions to determine technology winners.
The Mission is not merely an effort at generating grid-connected electricity.
Rather, two of its major objectives are to encourage R&D and encourage
innovation, thereby facilitating grid-parity in the cost of solar power, and
to establish India as the global hub for solar manufacturing. This is what
makes it a uniquely ambitious and game-changing programme.
In the very first year of its existence, the Mission has succeeded in catalyzing
investments in 200MW of grid-connected solar power plants, with another 500
MW expected to roll in shortly.
Wind, Biomass and Hydro Energy Generation
Though solar energy is the future, wind energy is where India competes globally
in manufacturing and deployment in the present scenario. India has an installed
capacity of over 11,000 MW of wind energy, and occupies the fifth position
in the world, after USA, Germany, China and Spain. Our policy framework in
wind energy generation is extremely investor-friendly, and an attractive tariff
and regulatory regime provide a strong foundation for the growth of the sector.
My ministry has recently taken the decision to introduce generation-based incentives,
a scheme whereby investors, as well as getting the tariff as determined by
the respective state regulatory commissions, will also receive a financial
incentive per unit of electricity generated over ten years. The decision to
incentivize the generation of power will create a level playing field between
foreign and domestic investors, and I hope this will catalyze more investments
in this field by large independent power producers and foreign investors.
Biomass, which is an eco-friendly source for production of electricity, also
holds considerable promise for India. Our estimates indicate that, with the
present utilization pattern of crop residues, the amount of surplus biomass
materials is about 150 million tones, which could generate about 16,000 MW
Hydro projects up to 25 MW capacities are termed as small hydro, and this
energy stream has a potential of over 15,000 MW. At present, a capacity addition
of about 300 MW per year is being achieved from small hydro projects – about
70% is coming through the private sector. So far, hydropower projects with
a capacity of over 2,700 MW have been set up in the country, and projects for
about 900 MW are in various stages of implementation. The aim is to double
the current growth rate, and take it to a capacity addition of 500 MW per year
in next two-three years.
The challenge before us in the renewable energy sector generally, and in India
particularly, is to reduce the per-unit cost of renewable energy. Hence, there
is a continuous need to innovate to increase efficiencies and bring down costs.
Innovations can be brought about in various ways – it is possible to
harness lower wind speeds; the energy of tides and waves can be channeled to
produce electricity; alternate transport fuels can make our journeys less carbon
intensive; hydrogen can be an ideal energy storage and carrier; and it is possible
to have a larger grid with lower losses of electricity.
Innovations need not always be technology-based. Insightful policy interventions
can also significantly increase the use of renewable energy. For instance,
in India we are working with the regulators to lay down the framework for tradable
renewable energy certificates. While this will enable us to achieve a larger
share of renewable energy in our electricity mix, the federal regulator’s
recent announcement of normative guidelines for provincial regulators to fix
tariffs for renewable energy will provide a mechanism for better returns for
renewable energy developers. We are confident that all these policy interventions
will further boost investments in the sector. We are also working towards closer
engagement with the banks and lending agencies to help developers gain access
to easy and cheaper sources of finance.
For centuries, the Indian tradition has worshipped the sun, the wind, the
earth, and water, as sources of life, energy and creation. Today’s technology
provides us with a real opportunity to transform the promise of boundless and
clean energy into reality. From rooftop solar power in urban agglomerations,
to decentralized and off-grid solutions in remote rural communities – the
opportunities in renewable power are immense. We believe that governments,
in their facilitative role, have to create enabling ecosystems, which will,
in turn, in facilitate the healthy unleashing of the entrepreneurial spirit
of the private sector and lead to the rapid development and deployment of renewable
My vision is to see that every citizen of the world has access to reliable
and affordable clean energy. It is for us to rise up together to take advantage
of these opportunities and translate the vision of a better world for all mankind
Dr. Farooq Abdullah is the Union Minister of New and Renewable Energy in the
Government of India. He is best-known for his energetic leadership of the groundbreaking
and transformational initiative in renewable energy — The Jawahar Lal
Nehru National Solar Mission. He is also known for a number of other initiatives
in the renewable energy space in India — notably the introduction of
generation-based incentives, and the move towards the introduction of renewable