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India Country Report

India Country Report

Potential of Renewable Energy Technologies and their Future Demand/Supply in India

Virendra Kumar Vijay1* , Meena Krishania2, Amita Gill3

1 Faculty, Centre for Rural Development and Technology, Indian Institute of Technology Delhi, India

2 Research Scholar, Rural Development and Technology, Indian Institute of Technology Delhi, India

3 Director, Dept of Science and Technology, Jaipur,Govt of Rajasthan, India

* Corresponding Author. Tel: (011) 26596351, Fax: (011) 26591121,

E-mail: vkvijay*rdat.iitd.ac.in (replace * with @)

Abstract

India has great potential to accelerate the use of its endowed renewable resources to power its growing economy with a secure and affordable energy supply. The Government of India recognizes that development of local, renewable resources is critical to ensure that it is able to meet both its economic and environmental objectives, and it has promoted this development through policy action. This poses a formidable challenge but is perceived to be a great opportunity for the country to increase the share of renewable in the overall energy mix. India's approach to the global problem is to meet its energy needs in a responsible, sustainable and eco-friendly manner. A brief outline of government policies and issues related to renewable energy financing, large scale dissemination, research and development are focused, along with the role of renewable energy in contributing to national energy security and mitigating climate change.

Keywords: Renewable Resources, Energy, Policy, Environment.

1. COUNTRY ENERGY OUTLOOK

Oil demand in India is set to grow in the next five years and beyond, driven by demand for its exports and a fast growing domestic market. India is endowed with the world’s fifth-largest coal reserves, which, together with gas and combustible renewable fuels (mainly wood used in the residential sector) cover about 70% of its total energy requirements. Economy and replace traditional fuels, primarily wood, in the residential sector. But India’s biggest success is expected to come from renewable, where solar and wind power predominates. The share of these two renewable energy systems is expected to register a fivefold increase by 2016. Nuclear energy will be more intensely used since six new nuclear power plants are already on- stream.

As in China’s case however, coal remains the most easily accessible source of energy and that is why India is already the world’s third-largest producer (after China and the US). India is expected to remain a highly coal-dependent economy for decades to come as coal-demand projections are driven by an ever increasing need for electrification in large parts of the country. India’s significant indigenous oil supplies have been declining for the last 15 years. An apparent slight increase in oil production in the last two years indicates that about 26% of total domestic oil requirements can be satisfied by domestic sources.

However, India’s incremental oil demand in the coming years is expected to outpace domestic production so that by 2016 the share covered by indigenous sources is projected to drop to 22% [1].

India’s per capita energy use in the year 2008 was 0.54 tons of oil equivalents (toe) which was far below that of industrialized countries. In 2008-2009 fossil fuels (coal, gas & diesel) provided around 80% of India’s electricity. In India, electricity generation alone contributed to 42% of the carbon emissions. As per the Ministry of petroleum & natural gas, Government of India, ,India has 125 Million metric tonne of proven oil reserves and about 1,437 billion cubic metres (50.7×1012 cu ft) of confirmed natural gas reserves as April 2010. Fig. 1-4 was showing the previous year’s energy status by indicating the electricity, natural gas, oil and coal production and consumption scenario in India. During the year 2010-11, the energy requirement registered a growth of 3.7% during the year against the projected growth of 5.6% and Peak demand registered a growth of 2.6% against the projected growth of 6.5%., though the total ex-bus energy availability increased by 5.6% over the previous year and the peak met increased by 6.0%, the shortage conditions prevailed in the Country both in terms of energy and peaking availability. Rapid economic growth has created a growing need for dependable and reliable supplies of electricity, gas and petroleum products. Due to the fast-paced growth of India's economy, the country's energy demand has grown an average of 3.6% per annum over the past 30 years.

The current focus in the renewable energy sector is to reduce the costs and to accelerate commercialization of various technologies. The Ministry of New and Renewable Energy (MNRE) initiated this shift in 1992, when it announced a new strategy and action plan to replace subsidy-driven programmes with commercialization. Financial incentives were trimmed and fiscal incentives, such as concessional tax and duties, along with soft loans, were introduced to encourage enterprises. Several renewable energy technologies (RETs) such as wind, solar thermal, solar photovoltaic, and small hydro are now promoted on a commercial scale. Today, India has the largest decentralized solar energy programme, the second largest biogas and improved cook stove programme, and the fifth largest wind power programme in the world. A substantial manufacturing base has been created in a variety of RETs, placing India in a position not only to export technologies but also offer technical expertise to other countries. The Prime Minister of India has announced a goal of 10% share for RE or 10,000 MW in the power generation capacity to be added during the period up to 2012. As of June 2010, India was one of the world leaders in installed renewable energy capacity, with a total capacity of 17,594 MW (utility and non-utility), which represents approximately 10% of India’s total installed electric generating capacity. Of that total, 17,174 MW were grid- connected projects, and the remaining 2.4% of installed renewable capacity consisted of off- grid systems the wind industry has achieved the greatest success in India with an installed capacity of 12,009 MW at the end of June 2010. India has also installed 2,767 MW of small hydro plants (with sizes of less than 25 MW each), 1,412 MW of grid-connected cogeneration from bagasse, and 901 MW of biomass-based power from agro residues. Waste-to-energy projects have an installed capacity of 72 MW. India has off-grid renewable power capacities of 238 MW from biomass cogeneration, 125 MW from biogas, 53 MW from waste-to-energy, 3 MW from solar PV plants, and 1 MW from hybrid systems [2].

2. COUNTRY ENERGY AND BEYOND

There is abundant solar radiation in India, with insolation levels of about 2,000 kilowatt-hours per square metre per year, which is among the highest in the world. The estimated potential is more than 50,000 megawatts of solar power. The resource potential for wind power is 45,000 megawatts. An estimated 420 million tons of biomass is produced every year, but most of it is being used inefficiently. The power generation potential from biomass is estimated to be 61,000 megawatts. Along with others such as small hydro and waste-to-energy, the gross potential for power generation from renewables is 183,000 megawatts [3].

2.1. Wind Energy

The development of wind power in India began in the 1990’s, and has progressed steadily in the last few years. The short gestation periods for installing wind turbines, and the increasing reliability and performance of wind energy machines have made wind power a favoured choice for capacity addition in India. The country’s total wind energy potential has been estimated at 45,000 MW. The wind energy sector has seen significant investments spurred by the development potential, availability of wind farm equipment at competitive prices, and conducive government policies. Currently, wind power accounts for around 70 percent of the installed generation capacity from renewable sources. Presently, India (15,700 MW) is in fifth position, following China (44,733 MW), the US (40,180 MW), Germany (27,215 MW) and Spain (20,676 MW). Wind power accounts for nearly 8 percent of India’s total installed power capacity [4].

2.2. Small-Hydro Energy

In India, hydro power projects with station capacity of up to 25 MW fall under the category of small hydro power (SHP). The total installed capacity of small hydro power projects as on March 31, 2012, was 3200 MW. However, the estimated potential for power generation from such plants is over 15,000 MW [3]. Most of the latent potential is in the Himalayan states - as river-based projects - and in the other states as irrigation canal-based projects. The SHP programme is largely private investment driven. Since the projects are economically viable, the private sector is keen on investing in SHP projects. The viability of these projects improves with increase in the project capacity.

2.3. Biomass & Waste Energy

India’s climatic conditions offer an ideal environment for biomass production. Biomass gasification is emerging as a method of power production that holds significant social and business benefits. In fact, bio-energy has remained critical to India’s energy mix, with a total installed capacity of 3000 MW. The total biomass & waste energy potential in India has been estimated at over 30,000 MW [2].

Biomass gasification based power production is able to generate power on small scales and offers a solution for producing off-grid green power Owing to its virtues, biomass gasification in India could play a key role in the electrification of rural and remote communities Indian industries could start using biomass gasification for power generation, replacing more costly heating options such as furnace oil

India has an estimated potential of over 30,000 MW of power from biomass, but around 3000 MW has been exploited. Thus, over 90 percent of potential capacity lies untapped

2.4. Solar Energy

Solar power has so far played an almost non-existent role in the Indian energy mix. The grid-connected capacity in the country now stands at 481.48 MW, while the total solar energy potential has been estimated at 50,000 MW. On the upside, the market is set to grow significantly in the next ten years, driven mainly by rising power demand, escalating fossil fuel prices, the ambitious National Solar Mission (NSM), various state level initiatives, renewable energy quotas (including solar energy quotas for utilities), as well as by falling international technology costs. India has great potential to generate electricity from solar energy and is on course to emerge as a solar energy hub. The techno-commercial potential of photovoltaics (PV) in India is enormous. With GDP growing in excess of 8 percent, the energy gap between supply and demand will only widen. Solar PV is a renewable energy resource capable of bridging this gap.

Most parts of India have 300 – 330 sunny days in a year, which is equivalent to over 5000 trillion kWh per year. This is more than India’s total energy consumption per year Average solar incidence stands at a robust 4 – 7 kWh/sq mtr/day [5].

About 66 MW of aggregate capacity is installed for various applications comprising one million industrial PV systems – 80 percent of which is solar lanterns, home/street lighting systems and solar water pumps, among others

The estimated potential envisaged by the ministry for the solar PV programme, i.e. solar street/home lighting systems, solar lanterns is 20 MW/sq km

The potential of the solar thermal sector in India also remains untapped. The ministry has proposed an additional 500 MW during the Phase-I of the Jawaharlal Nehru National Solar Mission (JNNSM)

Establishing manufacturing units at Export Oriented Units, SEZs or under the SIPS programme presents a good opportunity for firms. These can leverage India’s cost advantage to export solar modules at competitive prices to markets in Europe and the United States

2.5. Government Incentives

In the early 1980’s, the Ministry of New and Renewable Energy (MNRE) was established to encourage diversification of the country’s energy supply and to satisfy the increasing energy demand of a rapidly growing economy. The MNRE issued guidelines to all state governments to create an attractive environment for the export, purchase, wheeling and banking of electricity, generated by renewable power projects. Some of the other key incentives provided by the Government of India for the renewable energy industry are: Feed-in-tariffs for both wind and solar energy [6, 7]

Up to 80 percent accelerated depreciation for renewable energy investments

Preferential tax rate of 15 percent, instead of the standard 30 percent

Exemption from Central Sales Tax and customs duty concessions on soft loans for the import of material, components, and equipment used in renewable energy projects.

Establishment of the National Solar Mission (NSM), which aims to deploy 20 GW of solar energy by 2020

Soft loans for setting up renewable energy enterprises

Tax holiday for 10 years for Biomass power projects

3. CURRENT STATUS ON RESEARCH AND DEVELOPMENT

R&D Work related to bioenergy in our lab is highlighted here. Biogas is a product of anaerobic digestion of biodegradable waste products is a cheap way of getting energy and at the same time handling disposal of waste products hence helping in building a sustainable environment. Animal wastes, agricultural residues, algae, de oiled jatropha and pongamia cakes or other organic maters can also generate biogas easily. India is an agricultural country, so large quantities of agricultural residues are there, biogas lab of Indian Institute of Technology Delhi (IIT Delhi) has identified that after alkali pre treatment of agricultural residue can generate high quality as well as quantity of biogas. Biogas, can be used for heat, power, and after upgradation for vehicular applications. Hence raw biogas can upgraded to natural gas quality by various methods like water scrubbing, pressure swing absorption, chemical scrubbing etc. An upgrading and bottling system which is economically feasible for low cost and small scale applications has been developed at IIT Delhi. Biogas denotes a gaseous fuel consisting of > 90% methane is of biological origin that is fully compatible with existing compressed natural gas (CNG) vehicle system and also fulfils the quality demands for injection into the natural gas grid. Together upgraded biogas and natural gas are alternatives to petrol and diesel which may help us achieve a transport sector with cleaner and even renewable energy. These opportunities include injecting upgraded biogas into the natural gas grid, use of biogas as a vehicle fuel, A third opportunity for biogas or upgraded biogas is to compress the gas and transport in pressurized containers to be used on site or at remote locations.

5. CONCLUSION

Developing renewable energy can help India increase its energy security, reduce adverse impacts on the local environment, lower its carbon intensity, contribute to a more balanced regional development, and realize its aspirations for leadership in high-technology industries. According to a KPMG report 2011 India is the third most favoured destination globally, for investments in the renewable energy sector. The report also says that the country will be a major source of new entrants into the sector, after the US and China. The Indian renewable energy market has become increasingly dynamic in recent years as a result of strong natural resources, greater accommodation to international investments and a variety of government incentives. Biogas technology will be the major areas to witness overseas investments in the near future. With all the attractive characteristics and potential stated above, India presents a significant market opportunity for renewable energy firms worldwide. However, these firms will need external guidance and assistance on several strategic and operational aspects before they are in a position to effectively tap into this opportunity.

6. REFERENCES

[1] CGES Analysts, (2012), India's to 2016, http://www.cges.co.uk/resources/articles/2012/05/17/india-s-energy-outlook-to-2016.

[2] MNRE, (2011), Strategic plan for new and renewable energy sector for the period 2011-17, http://mnre.gov.in/file-manager/UserFiles/strategic_plan_mnre_2011_17.pdf

[3] MNRE, (2012), Annual Report 2011-2012, http://mnre.gov.in/file-manager/annual-report/2011-2012/EN/index.htm

[4] Indian Wind Power Association, (2012), http://www.windpowerindia.com.

[5] MNRE, (2012), Jawaharlal Nehru National Solar Mission: Towards Building SOLAR INDIA.” http://mnre.gov.in/pdf/mission-document-JNNSM.pdf.

[6] Government of India Planning Commission, (2012), Integrated Energy Policy—Report of the Expert Committee 2006.” August 2006; pp. 18-19. http://planningcommission.nic.in/

[7] Power and Energy, (2012), http://planningcommission.nic.in/sectors/index.php?sectors=energy.