Download India`s Renewable Energy Policies

EU-India Round Table
20-22 September 2007
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"India’s Renewable Energy
Policies "
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India Contribution
Rapporteur: Mr DASGUPTA
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India’s Renewable Energy Policies
Like the European Union, India has taken impressive strides in promoting
renewable sources of energy – principally wind, small hydropower, biomass and
solar. Renewable energy currently contributes 5700 MW, accounting for about 4
percent of installed power generation capacity in India.
Though there are many similarities in the policies followed by India and
the European Union respectively to promote renewable energy, the justification
or rationale for these policies is not identical in the two cases. In the case of the
European Union, climate change mitigation (the need to cut down carbon emissions
from coal, oil and gas) appears to be the primary consideration for incentives to
switch to renewable sources, such as wind and solar energy. The primary
considerations driving Indian policy relate to local air pollution, energy security and
economic and social development imperatives though, of course, there are also
important climate change co-benefits in terms of lowering carbon emissions.
Ambient air pollution
In 1999-2000, more than 85 percent of India’s rural population was dependent
on traditional fuels (biomass and cow dung-cake) for their basic energy needs. The
use of these fuels in inefficient chulas (cooking stoves) led to high levels of indoor air
pollution, causing wide-spread respiratory and eye diseases, particularly among
women. India’s goal is to provide cleaner cooking fuels to the entire population by
2012. In addition to LPG, this includes renewable energy solutions such as biogas,
improved chulas and solar cookers. By March 2007, 35.2 million improved chulas
were introduced and biomass gasifiers produced 75.8 MW of electricity. While these
measures are primarily designed to improve ambient air quality and raise health
standards, they also have co-benefits in terms of climate change mitigation.
Energy Security
Energy security is an important consideration for a country like India, which
is heavily dependent on crude oil imports. Development of renewable energy sources
helps moderate the degree of dependence on energy imports. Bio-diesel and ethanol
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offer immediate possibilities for reducing oil imports. These are the focus areas in
India’s bio-fuels programme. Ethanol is produced from sugar cane and is blended
with gasoline. In 2004, it was decided, as a first step, to mandate 5 percent blending
of petrol with ethanol. A MOU between the Indian sugar Mills Association and
Indian Oil Corporation is designed to ensure uninterrupted supplies of ethanol for the
programme. Bio-diesel is produced from various oil-bearing seeds and is blended
with high-speed diesel. India has launched an ambitious programme for producing
bio-diesel. from the Jatropha curcas plant, which grows in arid soils that would
otherwise remain uncultivated. Under the National Mission on Bio-diesel, lands in 26
states are being brought under jatropha plantations. The target is a 20 percent blend
by the year 2011-12. A National Bio-diesel Board has been created to “promote,
finance and support organizations that are engaged in the field of oilseed cultivation
and oil processing leading to bio-diesel production”. India’s Bio-diesel Purchase
Policy prescribes that public sector oil marketing companies should purchase biodiesel of prescribed specification from authorized suppliers at a uniform price that
will be reviewed every six months.
Energy security considerations also explain the financial incentives offered by
the Indian government for harnessing wind power. The private sector has responded
well to these incentives. Installed capacity has risen dramatically from 2400 MW in
2003-04 to 6070 MW today. India already has the fourth largest installed wind power
capacity in the world.
Development Economics
India’s renewable energy policy contains important provisions for
electrification of remote villages and hamlets. In these areas, emphasis is laid on local
participation and decentralization of power generation facilities. Because of the high
costs of connecting these remote villages to the national grid, it is economical to
promote projects based on solar energy, biomass gasifiers and small hydro power
plants. As of November 2004, 1744 remote villages and 572 remote hamlets were
electrified under this programme. The government provides up to 90 percent financial
assistance for non-conventional energy schemes in these areas.
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Turning to rural areas in general, decentralized applications of renewable
energy include biomass, biogas and solar energy for such uses as cooking, drying
farm produce, and home and street lighting); and wind and solar energy for water
pumping. The Village Energy Security Programme is intended to meet household,
agricultural and commercial requirements of rural areas through locally available
resources and indigenously developed technologies.
Renewable Energy in India: a Snapshot
The following chart provides a snapshot picture of renewable energy
installations in India as on 31 March 2007.
Biogas plants
3.89 million
Improved Chulhas
35.2 million
Wind Power
6070 MW
Small hydropower
1849 MW
Biomass
1068.3 MW
Solar photovoltaic
2.74 MW
Solar water-heating
1.5 million m2 (collector area)
Waste-to-energy
45.98 MW
An important question of classification
Two vitally important areas – large hydropower and nuclear – rarely find a
place in lists of renewable energy sources. In the case of large hydropower plants, the
exclusion appears to mainly reflect concern over resettlement questions. Safety,
environmental and nuclear proliferation concerns explain the exclusion of nuclear
energy from the list of renewable energy sources.
There is a compelling case for including all hydropower projects in the list of
energy sources. Resettlement does pose complex problems but these are by no means
irresolvable. Likewise, solutions can usually be found to questions of environmental
safety related to large dams. All sources of energy have an environmental impact
when exploited on a large scale. (Wind energy, for example, is associated with
problems of noise pollution.) A balance must be struck between positive and negative
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environmental impacts. In the case of large hydropower, there are enormous
environmental gains in terms of avoided carbon emissions and climate change
mitigation. Lending policies of the international and regional financial institutions
should take into account the critical role of large hydropower plants for sustainable
development.
Nuclear energy poses a more complex problem. While safety issues have been
addressed in the latest technologies, there are real political concerns in the case of
countries with a poor proliferation record. Countries that are known to have been
involved in clandestine transfers or nuclear thefts are rightly excluded from transfers
of nuclear technology and materials. On the other hand, the international community
pays a heavy price in terms of climate change mitigation by excluding rapidly
developing countries with an impeccable nonproliferation record. A case-by-case
approach would be appropriate in such cases.
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