The Time is Ripe for Focusing on Renewable Sources in India

India is a powerhouse and a power hungry nation. With about 260 GW of capacity installation, it is the fifth largest in the world. It is also the fifth largest producer and consumer of electricity in the world and is expected to overtake Japan and Russia in the next few years. For the world’s second largest population, that, however, is not sufficient. And with per-capita electricity consumption that is well behind world’s average and a fast growing economy, India’s power consumption is expected to grow rapidly over the next decade.

 The Indian power sector consistently fails to meet the demand for electricity. In the year 2012-13, there was a deficit of 8.7% in electricity generation for the country. Delay in procurement of coal is the primary reason for the deficit. Two-thirds of the electricity generated is from coal-based plants, and 80% of the additional generating capacity is coal-based meaning availability of coal is crucial to meet demand for electricity. Coal India Limited, the country’s only coal provider for public power generation has consistently fallen short of production targets and demand. Over 200 coal projects in the country are held up awaiting clearances from the environment ministry despite claims of reforms by the central government over approvals, hampering domestic coal production. Disagreements between Coal India Ltd and power generating entities like NTPC over pricing of imports has also delayed the process of importing coal from other countries like Australia and Indonesia. In the current scenario, removing the above mentioned road blocks in mining and importing coal is absolutely crucial for India.

 Reliance on coal excessively comes with long-term costs. Emissions from coal-based plants in India are 4-20 times more harmful than emissions from Chinese plants, which themselves have been subject to considerable flak for toxic emissions. It can be largely attributed to the poor quality lignite and coal reserves and slack emission norms in our country. Fly ash content of 35% found in lignite and sub-bituminous coal in India is significantly higher the better grade reserves in countries like Australia and the USA. As per IMF, coal causes about 70,000 deaths annually in India. Also, most of our coal resources are in ecologically sensitive areas, tampering with which leads to ecological concerns like loss of carbon sink, erosion etc. Chinese’s cities earlier in the year were blanketed by pollution from coal-based plants following which the Chinese government initiated ban of low quality coal. India, instead of learning from the Chinese events, is pursuing heading in the same path playing little heed to the environmental concerns.

Fortunately for India, prospects for nuclear and renewable energy are bright. For a nation, which has little reserves of cleaner fossil fuel in the form of oil and natural gas and low quality coal reserves, it is a saving grace. India ranks among the highest in uranium reserves. Despite that, nuclear energy contributes only 1.2% to generation of electricity. India is endowed with wind energy potential too. It is estimated that the exploitable potential of wind energy in India, on-shore and off-shore combined is over 300 GW, which is greater than India’s current total installed capacity. India’s solar power potential is equally high. With approximately 300 clear sunshine days each year on an average, solar power potentially can meet India’s power demand alone. India also ranks fifth in potential for hydel power generation. Out of the estimated potential of 148 GW, only about 40 GW of hydel capacity has been installed yet. In fact, share of hydel power in electricity generation has reduced has halved from 40% over the past four decades primarily due to environmental and forest clearance delays.

Traditionally renewable energy sector was inhibited by high initial costs and managing supply based on demand as electricity cannot be saved for future use. Rapid advancement of technologies over time have reduced these costs significantly. The availability of silicon photo-voltaic modules which was instrumental in fall in solar power generation cost by 70% in the last five years. A possible rise in costs from conventional sources arising from imports will bridge the price gap between conventional and renewable sources further. Renewable sources, nonetheless, face other technological drawbacks in the form of difficulty in storage of power and vulnerability of seasonal variations.

The Planning Commission in its draft for Twelfth Five Year Plan estimated that requirement for coal will increase to about 1000 million tonne almost double compared to 540 million tonnes of coal produced in 2011-12. The emphasis on increase in capacities of coal-based plants and production of coal has taken precedence in the 12th five year plan. While solar, nuclear and wind energy are highlighted as areas of promise, the policies are not as aggressive. The government has provided incentives to solar power producers in the form of feed-in tariffs and subsidies. It has set out a target to have installed capacity of 20 GW of solar plants by 2022. Although, the wind energy sector in India has received much attention over the past few years, no specific plans to exploit the interest in the industry have been made. The government has no planned additions to nuclear plants over the next five year plan period. The government, instead, has laid greater emphasis on improving coal efficiency and reducing ash content.

The nation, since the turn of the millennium has turned its focus towards meeting achieving self-sufficiency in electricity generation and staying abreast with rising demand from India’s rapid economic growth. At this juncture, the time has arrived for India to take small yet bold steps in laying the foundation for shifting reliance towards renewable sources of energy. Renewable sources by themselves are not the solution for India’s immediate needs for electricity. But if the strong investor interest is exploited and a comprehensive approach for the future is planned and implemented, both the demand shortfall and adverse environment impact from indiscriminate use of coal may be mitigated. For a nation endowed with abundant renewable resources and growing interest from local and global players, the opportunity is glaring.


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