Chennai: The mood in the renewable energy sector alternates between hope and despair. Every time there is a development that augurs well for the sector, players get upbeat and then wax eloquent about the potential that the country offers for the entire range of renewable energy sources. This joy is, unfortunately, often short-lived. One step forward, two steps back, is how an industry player described the green energy sector's progress. But, then, the players add that in India things happen, albeit slowly. They turn green with envy when they look at the developments in China, especially with the wind power sector. At the end of calendar 2008, China overtook India to occupy the fourth slot in terms of total wind installed capacity and jumped far ahead with regard to annual capacity addition. China added 6,300 MW of wind power capacity in 2008, taking its total installed capacity to 12,210 MW. In comparison, India added 1,800 MW, taking its installed capacity to 9,645 MW. China also boasts of a much larger manufacturing base for wind energy equipment when compared to India. Mr Ditlev Engel, President and CEO, Vestas Wind Systems, a leading wind turbine manufacturer, told this correspondent in Denmark last year that things in India have been disappointing as far as the wind energy sector is concerned, especially because the country was so much ahead some years ago. "I think India has a wonderful potential if the country wants to go ahead," was his observation. But, some like Mr G. M. Pillai, Director-General of the Pune-based World Institute of Sustainable Energy (WISE), an eternal optimist as far as the renewable energy sector is concerned and a vocal proponent of its advantages, in a recent interaction, listed some of the positive developments for the sector. The 50 paise a unit generation-based incentive offered by the Government of India is one such. The other is the response to an initiative taken by him – that of getting a renewable energy law enacted in the country. He said that at the political level, almost all parties were aware of the need for such a piece of legislation and was confident that this legislative impetus would give the sector the much-needed boost.A look at the ground reality is in order. Of the total 148,265 MW of installed power capacity at the end of April 2009 in the country, the renewable energy sector at 13,242 MW accounts for just about 9 per cent. Of this, the wind power capacity totals 10,134 MW, with the balance being accounted for by other renewable energy sources such as biomass, cogen, small hydro, solar and waste-to-energy projects.More advanced economies, particularly in Europe, have set ambitious targets for increasing the electricity they get from Green power sources and are following that up with major fiscal incentives and regulatory measures. In India too, there has been some movement at least as far as the regulatory measures are concerned. A number of State electricity regulatory commissions have specified that distribution utilities, in cases where the electricity utility has been unbundled, or the State electricity board itself should source a specified percentage of the power they sell to consumers from renewable energy sources. Moreover, the States are also offering attractive tariffs for power from renewable sources. All this, the industry believes, will lead to increased private sector investment in the sector. As it is, a number of multinationals and some domestic power utilities and petroleum companies are investing in the renewable energy sector.For the sector to really take off, the powers that be have to realise that incentives are needed and that these to be sector specific and properly monitored. Emerging technologies in the renewable energy sector are capital intensive, which calls for higher levels of State support through higher tariffs and funds at cheaper rates of interest.The US and Europe look at Green Power from an entirely different perspective. It is not just one that will help add generation capacity, but will also provide rural jobs. That is an approach that India too will have to adopt. If that is done, a majority of the problems will be sorted out. Wind turbines, for instance, can come up only in rural areas, where the infrastructure is poor. The developers not only have to provide this infrastructure themselves, they also have to contend with numerous "local issues," as they put it.Green Power will also help in distributed generation — having small generation capacities in places where there is not heavy demand for electricity. A number of small-size biomass power projects have been put up and more are in the pipeline. For them to come on line quickly, attractive tariffs are a must. Rather than look at different sources of electricity generation in isolation, it is necessary for all States to work out an integrated energy plan that will cover a 25-year period. This should not be confined to just how the State is going to meet its electricity needs, but also look at the transportation sector. Some States such as Karnataka, Rajasthan and Maharashtra have embarked on such an exercise. Mr Pillai of WISE believes that this is a must, as otherwise, the States will not be prepared for the sudden energy demand growth. One area that Mr Pillai wants the States to look at seriously for power generation is solar. It may be an expensive proposition now, but large-scale projects tend to bring down costs. Also, newer technologies are emerging that will help lower cost and enable larger quantity of electricity to be generated. His confident assertion was that solar power can power the entire northern region. Only policy and regulatory push can determine whether that is indeed feasible.
Business line, 5th June, 2009
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