NEW ENERGY IN INDIA

A Growing India Sets Goal to Harness Renewable Energy
Rama Lakshmi, July 19, 2009 (Washington Post)
and
US firm Astonfield to invest $2bn in India's renewable power sector
24 July 2009 (Times of India)

SUMMARY
Secretary of State Hillary Rodham Clinton’s recent visit to India offered the opportunity to take a fresh look at a nation whose choices for its future loom central to the fight against global climate change.

There is one thing Secretary Clinton will find most familiar in a land that can seem quite “other” to even a seasoned world traveler: As in the U.S., New Energy means jobs and revenues and domestically produced power to an India that wants as much of all 3 as it can get.

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More than half of India's 1.1 billion people have no access to the national transmission system. The other 44%, more than the total U.S. population, gets electricity from a grid supplied mainly (65%) by fossil fuel power plants. India uses 5% of the world’s coal, which accounts for 40% of its growing generation of greenhouse gas emissions (GhGs).

India gets 8% of its total power from New Energy sources. Its National Action Plan on Climate Change aims to obtain 1,000 megawatts per year of new solar photovoltaic (PV) capacity and 1,000 megawatts per year of new solar power plant capacity through 2020. The plan also calls for a major effort to improve Energy Efficiency, with a goal of eliminating 10,000 megawatts of inefficiencies by 2012 through changes in standards for industry, for appliances and in improved demand management. There are provisions to extend an improved building code, to grow waste management and recycling, to strengthen vehicle fuel efficiency standards and to incentivize the use of public transport.

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On the heels of Secretary Clinton’s visit, Astonfield Renewable Resources Limited (ARRL), the Indian unit of U.S. multinational infrastructure developer Astonfield Management, leaked word of a $2 billion investment in New Energy in India. ARRL will partner with France’s power giant AREVA to build 1,000 megawatts of solar and biomass infrastructure in India. This will be the single biggest investment in New Energy ever made in India.

At least 500 megawatts of the new capacity will be in solar energy generation.

Construction on the first biomass power plant is scheduled to start later this year in Gangarampur in West Bengal. The next project in line may be a 54 megawatt municipal solid waste-to-electricity project in Kolkata.

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COMMENTARY
Like emerging economies around the world, India has villagers that can talk on cellphones whose signals are carried via cell towers powered by smoke-spewing portable diesel generators yet who live in darkness for the lack of a grid connection to electricity.

The Indian Ministry of New and Renewable Energy was created a quarter century ago and has slowly pushed forward an off grid program for small solar and wind systems.

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Companies like Tata-BP Solar have made slow, steady progress at setting up solar lighting systems and funding them through rural banks that make $300 microloans to villagers.

Without adequate transmission, the National Action Plan may not be able to achieve its noble intentions. It would not be the first time federal government efforts to incentivize new power generation have fallen short.

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There are reports of federally subsidized new generation facilities having been constructed and left idol when the builders, having profited from generous federal subsidies to build, walked away in the face of inadequate transmission and the absence of incentives to stay and actually produce power.

Though the National Action Plan is barely a year old, there are already reports that the mandate requiring 25% of all new water heating systems be solar hot water systems is meeting with very slow compliance.

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The government says this time will be different. On the other hand, India’s officials have demonstrated a great capacity for paying lip service to what the rest of the world thinks would be good for India and then proceeding to do as they see fit.

Officials say the absence of a better national transmission system is simply the result of a lack of funding.

In the absence of effective government action, individual villages are still seizing the opportunity to build off grid capacity whenever they can. A construction company owner and apartment complex manager in a Delhi suburb found enormous interest in residential condominiums he is building with efficiency oriented sensor lighting, off grid solar panels, heat-resistant insulated bricks and water harvesting systems.

The ARRL/AREVA projects intend to avoid the dilemma of owning power transmission capacity that has no way to get to the national grid. They will fund their own transmission interconnection. The calculation appears to be that it will be more profitable to pay for their own wires than to face risks such as being reached and served by India’s less than reliable grid.

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QUOTES
- Secretary of State Clinton: "We believe India is innovative and entrepreneurial enough to figure out how to deal with climate change while continuing to lift people out of poverty and develop at a rapid rate…"
- Gauri Singh, joint secretary, Indian Ministry of New and Renewable Energy: "We need to get our act together…because India is growing faster than anyone can imagine. Renewable energy will have to supplement conventional power supply…Our priority is to achieve energy security and self-reliance. Climate change is not the main driver for renewable energy in India, it is a co-benefit…"

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- Unnamed Indian solar company executive: "Unless the government guarantees that it will purchase solar power at a lucrative cost with feed-in tariffs, the industry will not take off. We end up exporting three-fourths of solar cells and photovoltaic modules to Europe…The government has to cough up money and go beyond making the right noises about renewable energy."
- Vinuta Gopal, climate change campaigner, Greenpeace India: "Entrepreneurs made quick money by setting up plants, availing of tax benefits and then disappearing. Nobody was interested in ensuring that they actually produced electricity…"

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- Anil Patni, Tata BP Solar: "In the last two years, we have developed a good off-grid rural market. We are selling solar home lighting systems that come with rooftop panels directly to villagers who have no access to electricity…But though the arrival of a solar lighting system transforms the life of the rural family, true economies of scale in solar power will come only with grid connectivity."
Ameet Shah, co-chair, ARRL: "We are going to make an announcement in the next 30-60 days. It will be a billion dollar initial investment on photo-valtics…"
- Sourabh Sen, co-chair, ARRL: "The Astonfield commitment to world class renewable energy projects means that we must bring the world's best technology players to the table. AREVA is the reference in its field and we look forward to continuing this relationship through this and many future successful biomass projects in India…"