V Subramanian, Secretary, Ministry of New and Renewable Energy,

Government of India

India's need to increase energy provision for its population and fast-growing
economy coincides with increased concerns regarding climate change globally.
This poses a formidable challenge but is perceived to be a great opportunity for
the country to increase the share of renewables 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 given here, along with the role of renewable energy in
contributing to national energy security.

Introduction

India is a developing and fast-growing large economy

and faces a great challenge to meet its energy needs in
a responsible and sustainable manner. India's task is to
provide energy to over 600,000 human settlements,
spread over 300,000 square km of territory, with a
population of over one billion which is still growing, but
expected to stabilise at around 1.6 billion during the
next 40 years. The total primary energy supply in India
has grown at a compound rate of around 3.4 per cent
since independence to reach 537.7Mtoe (million tonnes
of oil equivalent) in the year 2005 (IEA 2007). While
commercial primary energy grew at 5.3 per cent over
the period, non-commercial energy grew at only 1.6 per
cent, which is a reflection of industrialisation. As a result, the share of commercial
energy grew from 28 per cent in 1950 to around 70 per cent in 2004 with an
associated decline of non-commercial energy.

In 2005, India accounted for 4.7 per cent of the world's primary energy supply. Per
capita energy consumption was just 27 per cent of the world average at slightly
over 500kg oil equivalent.

Electric power

India accounted for 3.1 per cent of the world's electricity consumption in 2005
with an installed capacity of 135,780 MW as of September 2007. Of this, 87,200
MW is accounted for by thermal power plants, 34,200 MW by large hydro plants,
4,100 MW by nuclear, and the balance from renewable sources. The consumption
of electricity in India rose from 4,157 GWh in 1950 to 38,6134 GWh in 2004/05.
The per capita consumption was 612 kWh in 2004/05 as against 329 kWh in 1990
(CEA). Despite the significant growth in electricity generation, shortage of power
continues to exist primarily due to the growth in power demand outstripping the
growth in generation and generating capacity addition. In May 2007, the country
experienced an estimated eight per cent energy shortage and 12.3 per cent
shortage of peaking power. Even so, the 2001 census recorded
12 .5 per cent of urban households and 56.5 per cent of rural households as still
unelectrified.

Modern energy provision

One of India's major challenges is to provide a large proportion of the country's

population with access to modern energy sources. Around 86 per cent of rural
households and more than 20 per cent of urban households still rely primarily on
traditional fuels, such as firewood, wood chips or dung cakes, to meet their
cooking needs. The use of traditional fuels can cause health problems arising from
indoor air pollution. Only five per cent and 2.7 per cent of rural households use
LPG and kerosene respectively as a primary cooking fuel whereas 44 per cent and
22 per cent of urban households uses LPG and kerosene respectively. With low
standards of living, ie below the per-person-a-day International Poverty Line of
US$2, at Purchasing Power Parity (PPP) rates of about 75 per cent population, the
task of providing modern energy services becomes severely compounded. This
has resulted in low levels of per capita energy and electricity consumption on
account of low levels of purchasing power.

Projections made by the Integrated Energy Policy Committee of the Planning

Commission have estimated that in order to meet the projected GDP growth of
eight per cent per annum by 2031-2032, the demand for primary energy will
increase to 1,836Mtoe representing almost a four fold increase since 2003-04.
Commercial energy requirements would also be around 1,651Mtoe, which is an
approximate five fold increase since the year 2003-04.

Renewable energy

India intends to provide a reliable energy supply through a diverse and

sustainable fuel mix that addresses major national drivers. These include security
concerns, commercial exploitation of renewable power potential, eradication of
energy poverty, ensuring availability and affordability of energy supply and
preparing the nation for imminent energy transition.
 The country has an estimated renewable
energy potential of around 85,000 MW from
commercially exploitable sources: Wind,
45,000 MW; small hydro, 15,000 MW and
biomass/bioenergy, 25,000 MW. In addition,
India has the potential to generate 35 MW
per square km using solar photovoltaic and
solar thermal energy.

Grid-interactive renewable power

By March 2007, renewable electricity, excluding hydro above 25 MW installed

capacity, has contributed 10,243 MW representing 7.7 per cent of total electricity
installed capacity. There has been phenomenal progress in wind power and, with
an installed capacity of over 7,100 MW, India occupies the fourth position globally.

Decentralised and stand alone renewable electricity systems

Over 3,000 remote and inaccessible villages and hamlets have been provided with
basic electricity services through distributed renewable power systems. In
addition, over 75 MW biomass based gasification systems in the capacity range of
10-100 kW are in use for small scale industrial applications and electrification
purposes. Finally, over 1.3 million solar home lighting systems, including lanterns
and street lights have been set up in different parts of the country.

Heat energy for cooking purposes

Since the 1970s, around 3.9 million family-type biogas plants have been set up to
provide clean cooking energy options in rural areas. Biogas based cooking in rural
areas has made cooking a pleasure with associated social and environmental
benefits including zero indoor pollution.

Process heat for domestic, industrial and commerical purposes

Use of solar thermal systems has started gaining momentum, with a solar
collector area of 1.9 million sq metres already installed to meet these needs.

Liquid biofuels for transport applications

The large scale development of biofuels, including straight vegetable oil (SVO),
biodiesel and bioethanol is still in its infancy. In 2004 around 0.1Mtoe ethanol was
used for blending with petrol. Biodiesel use is still negligible. However, a policy
framework for blending five per cent ethanol with petrol and the development of a
biodiesel programme, based on non-edible oil, has been developed.
Renewable outlook

The Integrated Energy Policy Report of the Planning Commission of India has
observed that the contribution of modern renewables to India's energy mix by
2031-32, excluding large hydro, would be around five-six per cent. However, our
estimates indicate that by 2032, renewable power capacity, excluding large hydro
could contribute up to 10 per cent of the total electricity generation in the country.
About 25,000 remote villages could be provided with basic electricity services
through renewable and seven per cent of the rural population would meet its
cooking energy needs through biogas and other modern renewable energy
systems. With focused biofuel programme, around seven to 10 per cent of oil
needs could be met through biofuels. While this figure appears small, the
distributed nature of renewables can provide many socioeconomic benefits.
Further, its impact in abating greenhouse gas emissions would be significant.
Widespread deployment of renewable systems would also create significant
employment potential for unskilled and semi-skilled workers.

Regulatory framework

India has been pursuing a three-fold strategy for the promotion of renewables:

• Providing budgetary support for research, development and demonstration

of technologies.
• Facilitating institutional finance from various financial institutions.
• Promoting private investment through fiscal incentives, tax holidays,
depreciation allowance and remunerative returns for power fed into the grid.

India's renewable energy programme is primarily private sector driven and offers
significant investment and business opportunities. A large domestic
manufacturing base has been established in the country for renewable energy
systems and products. The annual turnover of the renewable energy industry,
including the power generating technologies for wind and other sources, has
reached a level of over US$10 billion. Companies investing in these technologies
are eligible for fiscal incentives, tax holidays, depreciation allowance and
remunerative returns for power fed into the grid. Further, the Government is
encouraging foreign investors to set up renewable power projects on a ‘build, own
and operate' basis with 100 per cent foreign direct investment.

The most important legislative development which has stimulated the recent
growth in renewable power is the Electricity Act of 2003. The Act recognises the
role of renewable energy technologies for supplying power to the utility grid as
well as in stand alone systems. The Act also has several provisions favourable for
renewable power, including rural electrification. Its most important feature,
however, is its empowerment of the State Electricity Regulatory Commissions
(SERCs) to promote renewable energy and to specify a percentage of the total
consumption of electricity in the area of a distribution licence that will be
purchased from renewable energy sources. This is considered a major boost for
renewable energy promotion in India.

Renewable energy and climate change

India's first National Communication (2004) reveals that the energy sector
accounts for around 61 per cent of total national emissions. For fossil fuels, coal
combustion had a dominant share of emissions, amounting to around 64 per cent
of all energy emissions. With regard to India's emissions trajectory, the Integrated
Energy Policy Report of the Planning Commission has observed that "Since GHG
emissions are directly linked to economic activity, India's economic growth will
necessarily involve increases in GHG emissions from the current extremely low
levels. Any constraints on the emissions of GHG by India, whether direct, by way
of emissions targets, or indirect, will reduce growth rates, and impair pollution
abatement efforts."

Due to its vast market potential for renewable energy projects, and a relatively
well developed industrial, financing and business infrastructure, India is perceived
as an excellent country for developing Clean Development Mechanism (CDM)
projects. As such, India has emerged as one of the most favoured destinations for
CDM projects globally, with renewable energy projects having the major share.
National renewable energy plans offer ample opportunity for CDM projects and
technological innovations, such as biogas for transport application, offer new
areas for project development.

Technology concerns

The feasibility of a larger application of renewable energy, to that of the present

assessments, would depend on how rapidly costs decline and efficiencies
increase. As a result, research and technology development have been accorded
high priority in the national renewable energy programme and mission mode
research has been planned for developing solar, bioenergy and hydrogen
technologies. India encourages international cooperation in renewable energy
R&D, through well defined projects with proper division of labour and
responsibilities for specific tasks with equitable financial burden and credit sharing
arrangements. Bilateral, as well as multilateral, scientific and technological
cooperation agreements could provide a framework for such R&D activities.

Technology plays a central role in addressing climate change issues. In this

context there is a need to treat renewable energy technologies as a ‘global
common' in the medium term. To begin with these technologies could be placed in
the public domain and joint research and development projects could be taken up
between the institutions of developed and developing countries. Technology
transfer costs could be fixed at no-profit level and the expenditure to be incurred
in these acquisitions could be made from a global funds under climate change
mechanisms.
Conclusion

Indian efforts for promoting renewable energy are in harmony with global
concerns. India's strategies focus on:

• Working towards lowering the relative price of new and renewable power
technologies through a continuous and focused research and development
effort.
• Improving access to reliable, affordable, economically viable, socially
acceptable and environmentally sound energy services and resources.

The approach in India matches the global aim of ushering in a carbon free
economy; an economy based on a fuel mix mainly provided by the green or
renewable energy technologies.

For India, new and renewable energy development and deployment is of great
importance from the point of view of long term energy supply security,
decentralisation of energy supply particularly for the benefit of the rural
population, environmental benefits and sustainability. In this context, the Indian
renewable energy programme is a goal-oriented effort to meet the country's
energy requirement in an environmentally sound way.

Author

Presently, Secretary to the Government of India since February 2006, Shri

Subramanian was a commerce graduate of the University of Madras and a
qualified banker who started his career as the Sub-Divisional Magistrate at Kalna
and Barrackpore in the State of West Bengal. He moved to the Government of
India in 1983 as Deputy Secretary, Department of Expenditure and was a Director
in the Department of Economic Affairs during 1985-89. In 1990 he went on a
Commonwealth assignment as Adviser on Loan and Grant Management to the
Government of Mozambique. On his return to West Bengal, he was Power
Secretary and Labour Secretary in the State Government.

Organisation

The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry of the
Government of India at the Federal level for all matters relating to new and
renewable energy. The Ministry has been facilitating the implementation of broad
spectrum programmes including harnessing renewable power, renewable energy
to rural areas for lighting, cooking and motive power, use of renewable energy in
urban, industrial and commercial applications and development of alternate fuels
and applications. In addition, it supports research, design and development of
new and renewable energy technologies, products and services.
Enquiries

Ministry of New and Renewable Energy

Block-14, CGO Complex
Lodhi Road, New Delhi-110 003
India

Picture credits: wind farm at sunset - Terrance Emerson/Fotolia; children's

windmills with wind farm in background - K Shinde/UNEP, Still Pictures