Dialogue January-March

The demand for energy is soaring and due to the problems associated with development of conventional sources of energy, the focus has shifted to renewable energy sources. India has renewable energy sources in abundance, which if developed properly can meet its growing demand for energy. It needs to focus on utilizing and developing renewable energy technologies to harness the untapped potential in a cost effective manner.
Energy security has an important bearing on economic development and quality of life of the people, and the level of per capita energy consumption has for long been considered as a key indicator of economic growth. The rapidly growing Indian economy is also seeing an increasing appetite for energy that has soared in the recent past, complicated by equally fast-paced diminution of conventional sources like oil and coal. Apart from economic problems related to a rising demand and constrained supply of fuels, a fossil fuel-led growth strategy throws up issues of environmental concerns. The challenge is how to meet our increasing energy needs while minimizing the damage to the environment.

A major task before India is how to provide a large proportion of the country’s population 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. Their use can cause health problems arising from indoor air pollution. Only five per cent of rural households use LPG and only 2.7 per cent kerosene as a primary cooking fuel, compared with 44 per cent and 22 per cent of urban households using LPG and kerosene respectively.

* Virendra Parekh is a journalist of 36 years standing both in English and Gujarati and writes on economics and politics. Presently he is Executive Editor of Corporate India, a 30-years-old Mumbai-based English fortnightly of industry, economy and investment.

India spent a staggering $155 billion to import crude oil in 2011-12, an amount equivalent to more than half of the country’s total earnings from exports during the year. For the past five years, crude oil imports have been equivalent to about 48 per cent of the country’s total exports. In April-December 2012, the figure was at an astonishing high of over 58 per cent. This is a worrying aspect, since it implies that the major share of the country’s foreign exchange earnings is spent on import of a single commodity.

Then again, nearly two-thirds of India’s total power generation capacity (140,976 MW out of a total of 210,937 MW as of 30 November 2011) is based on thermal energy. Coal (120,873 MW) accounts for a whopping 57 per cent of the total installed capacity.

Therefore, while striving to bridge the energy deficit, it is imperative to increase the share of clean, sustainable, new and renewable energy sources. Creating an environment conducive to promote renewable energy technologies is the need of the hour. India is blessed with plenty of renewable energy resources. Wind, solar light, biomass, geothermal heat, ocean waves and even waste could be major alternatives to the conventional sources of energy.

The significance of renewable energy from the twin perspectives of energy security and environmental sustainability is well appreciated as it is the most appropriate, scalable, and optimal solution for providing power to thousands of remote and hilly villages and hamlets. Even today, millions of decentralized energy systems, solar lighting systems, irrigation pumps, aero-generators, biogas plants, solar cookers, biomass gasifiers and improved cook stoves are being used in the remotest, inaccessible corners of the country. Providing energy access to the most disadvantaged and remote communities can become one of the biggest drivers of inclusive growth.

Renewable energy is growing by leaps and bounds because it is flexible, modular, and increasingly competitive, thanks to rapidly falling costs. It takes only months, often weeks, to install a PV facility or wind turbine, in contrast to 10 to 13 years for nuclear reactors.

Research shows that an energy mix with wind energy providing 30 per cent, solar energy 20 per cent and gas turbines (biogas and natural gas) a further 20 per cent is technically and economically viable. It may soon be possible to imagine a scenario where most of the electricity we use comes from renewable energy sources. The country will thus be able to prevent climate change by lessening the emission of greenhouse gases.

Ranked among the top five countries in the world in terms of renewable energy capacity, India has an installed base of over 25,856 MW, which is around 12.25 per cent of India’s total power generation capacity of 210,937 MW as of 30 November 2012. However, electricity generated from renewable energy sources accounted for only 5.5 per cent of the total power generation in the country in 2011-12 (51,226 MU out of 928,113 MU as per provisional estimates made by Central Electricity Authority). This indicates gross under-utilisation of the installed capacity and the need for more advanced technology to tap it optimally.

Though the renewable energy scenario in India looks encouraging, we need to evolve a long term strategy to manage the future energy needs. In managing the energy crisis, where do we stand and where are we heading to?

Way back in the year 2008, the National Action Plan on Climate Change identified the development of solar energy technologies in the country as a priority concern to be pursued as a National Mission that led to the approval of the Jawaharlal Nehru National Solar Mission in 2009 by the Government of India. This is a unique and ambitious transformational objective that aims to establish India as a global leader in solar energy by creating the policy conditions for its diffusion across the country, as quickly as possible. The Government has planned to set up four solar thermal power projects through the Solar Energy Corporation of India.

Though solar energy is the future, wind energy is where India competes globally in manufacturing and deployment. India has an installed capacity of over 18,321 MW of wind energy as on 30 November 2012, and occupies the fifth position in the world after US, Germany, China and Spain.

In comparison, the installed capacity for solar power (grid-interactive) is only 1047 MW. Yet solar is, at least for now, the most promising area on the renewable energy map not only in India but also in the world because of its flexibility. It can feed into the grid and can also power appliances such as lamps, pumps and the like. It is also portable. A major attraction of solar plants is the fairly low level of technical skill needed to install and use them. Today’s engineers and technicians can do it with minimal training. Compare that with the skill level needed for nuclear plants to appreciate the point.

Biomass, which is an eco-friendly source for production of electricity, also holds considerable promise. It is estimated that with the present utilization pattern of crop residues, the amount of surplus biomass materials is about 150 million tonnes, which could generate about 19,500 MW of power as against the current installed capacity of 1667 MW (1243 MW grid interactive and 424 MW off-grid).

Hydro projects up to 25 MW capacities are termed as small hydro, and this energy stream has a potential of over 15,000 MW. At present, a capacity addition of about 300 MW per year is being achieved from small hydro projects – about 70 per cent is coming through the private sector. So far, hydropower projects with a capacity of over 3465 MW have been set up in the country, and projects for about 900 MW are in various stages of implementation. The aim is to double the current growth rate, and take it to a capacity addition of 600 MW per year in next two-three years.

Cost: The tremendous potential of renewable energy sources remains heavily underutlised largely for want of cost effectiveness. The cleanness of renewable power comes at cost. Reducing the unit cost of renewable energy and make it comparable with, say, thermal power is a major challenge for the country. This requires sustained innovation to increase efficiencies and bring down costs. Innovation can be brought about in various ways – it is possible to harness lower wind speeds; the energy of tides and waves can be channeled to produce electricity; alternative transport fuels can make journeys less carbon intensive; hydrogen can be an ideal energy store and carrier; and it is possible to have a larger grid with lower losses of electricity.

Storage: The common belief is that the world is running out of energy sources. The reality, however, is that we have too much energy that we do not know how to store. In the nature of things, solar power generation is intermittent— it is interrupted when there is no sunlight. So we need some other source of power during that time, like in nighttime. Small power users like domestic consumers can use ordinary batteries that can be charged by solar power and used as the source at night. This has limitations and is not practical for large consumers like industries.

On a windmill farm, most windmills are idle much of the time although there is enough wind. They produce too much energy but we have no way of storing them. This highlights the major problem with both solar and wind power: generating power is easy; the challenge lies in storing it for later use. To achieve this, scientists increasingly are looking to how plants do it.

Before the use of solar and wind power can become widespread, we have to address the challenge of storage.

Policy support plays a crucial role in meeting or mitigating these problems in the initial stages. Wind power industry is down in dumps, for example, following withdrawal of accelerated depreciation benefits – wherein wind energy developers could write-off 80 per cent of the value of their investments in the first year itself, reducing their tax payout – with effect from April 1. Secondly, the Centre had a scheme to pay an extra 50 paise for every unit of electricity generated from wind power and fed to the grid. The validity of this generation-based incentive or GBI, too, expired at the end of the last fiscal. The industry’ demand for restoration has merit.

More generally, all distribution utilities should be mandated to buy a specified percentage of electricity from renewable sources – and levied penalties for not doing so. Alternatively, they should be forced to buy renewable energy certificates (REC). At present, the utilities that are required by law to buy the costlier green power or REC are neither meeting their obligation nor being fined. The industry can legitimately demand strict enforcement of renewable portfolio standards.

Another important issue to focus on is the inadequate grid infrastructure to evacuate the electricity produced. Wind turbines are located in remote rural areas, where demand for electricity is limited, whereas generation is non-uniform – peaking in certain months when wind speed is strong. Often, wind turbines are forced to remain idle even when the wind is blowing fast simply because there is no mechanism to store or transmit the power produced. There can be no better incentive to the renewable energy sector today than investing in evacuation infrastructure.

Insightful policy intervention can go a long way in promoting renewable energy by attracting investments into the sector. With the population increasing at a rapid pace and a wide gap between demand and supply, the Indian energy sector offers strong opportunity to industry participants. After China and the US, India has been ranked as the third best investment destination in renewable energy sector.

India outpaced the rest of the world in investment in clean energy in 2011. The country’s clean energy investments were $10.3 billion in 2011 compared with $6.8 billion invested in 2010, the highest growth figure of any significant world economy.

More than $300 billion has been allocated for the five years to March 2017 to expand India’s electricity systems to achieve 9 per cent economic growth by then. Further, an increasing share of that may be allocated to renewable projects as lenders shun new conventional power projects afflicted by rising costs and supply shortages of fuel.

Buoyed by the prospects of renewable energy spurring the GDP over next five years, India is mulling the option to invite foreign participation in the sector. India may look for at least $7.5 billion of the $50 billion planned for investing in clean energy by 2017 through foreign direct investment.

“We would like a bare minimum of 15 per cent of that coming as FDI over the next five years,” says Mr. Gireesh Pradhan, Secretary at the Ministry of New and Renewable Energy (MNRE). “Interested players are coming in and looking at renewables in a serious way,” Mr. Pradhan adds.

The lasting solutions to the obstacles to harnessing the untapped potential in a cost effective manner and fulfill the energy demand, however, could come only from technology and innovations. A lot of pioneering and promising research is being done in advanced countries to address the issues related to cost, storage and transmission of the renewable energy. Such research is among the most commendable candidates for attention and resources of societies, in view of strong economic, social and environmental considerations.

As Dr. Farooq Abdullah, Union Minister of New and Renewable Energy, puts it, “Today’s technology provides us with a real opportunity to transform the promise of boundless and clean energy into reality. From rooftop solar power in urban agglomerations, to decentralized and off-grid solutions in remote rural communities – the opportunities in renewable power are immense. We believe that governments, in their facilitative role, have to create enabling ecosystems, which will, in turn, facilitate the healthy unleashing of the entrepreneurial spirit of the private sector and lead to the rapid development and deployment of renewable energy.”

Solar energy has the greatest potential of all the sources of renewable energy. Even if only a small portion of this potential is utilized, it will be one of the most important sources of energy especially when other sources in the country have been depleted. The solar power where sun hits atmosphere is 1017 Watts, where as the solar power on earth’s surface is 1016 Watts. The total worldwide power demand of all needs of civilization is 1013 Watts. Therefore the sun gives us 1000 times more power than the world needs. If we can use 5 per cent of this energy, it will be 50 times what the world requires. Electricity can be produced from the solar energy by photovoltaic solar cells, which convert the solar energy directly to electricity. The most significant applications of photovoltaic cell in India are the energisation of pump sets for irrigation, drinking water supply and rural electrification covering street lights, community TV sets, medical refrigerators and other small power loads.

Wind energy can be utilized to run windmill which in turn drives a generator to produce electricity. Wind can also be used to provide mechanical power such as for water pumping. In India, wind speeds obtainable are generally in the lower ranges, although high wind speeds are obtainable in coastal areas of Saurashtra, western Rajasthan and some parts of central India. Research is therefore focused on development of low-cost, low-speed mills for irrigation of small and marginal farms as also for providing drinking water in rural areas. The emphasis is on developing water pumping wind mills suitable for operation in a wind speed range of 8 to 36 km per hour.

Wind energy is currently making a significant contribution to the installed capacity of power generation, and is also emerging as a competitive option. India with an installed capacity of 18,321 megawatts ranks fifth in the world. Wind energy equipment are modular in nature and investment requirement for these equipments is not large compared to conventional energy equipments. Moreover, the industry is able to attract private investment thereby reducing the burden on the government.

The potential for application of biomass, as an alternative source of energy in India is large. We have plenty of agricultural and forest resources for production of biomass. Biomass is produced in nature through photosynthesis achieved by solar energy conversion. As the word clearly signifies biomass means organic matter. In simplest form, the process of photosynthesis is in the presence of solar radiation. Biomass energy co-generation programme is being implemented with the main objective of promoting technologies for exploitation of the country’s potential estimated at 19500 MW. The technologies being promoted include combustion, gasification and cogeneration, either for power in captive or grid connected modes, or for heat applications.

This is also an indirect method of utilizing solar energy. A large amount of solar energy is collected and stored in tropical oceans. The surface of the water acts as the collector for solar heat, while the upper layer of the sea constitutes infinite heat storage reservoir. Thus the heat contained in the oceans could be converted into electricity by utilizing the fact that the temperature difference between the warm surface waters of the tropical oceans and the colder waters in the depth is about 20–250K.

Utilization of this energy, with its associated temperature difference and its conversion into work, forms the basis of ocean thermal energy conversion (OTEC) systems. The surface water, which is at higher temperature, could be used to heat some low boiling organic fluid the vapors of which would run a heat engine. The exit vapors would be conducted by pumping cold water from the deeper regions. The amount of energy available from ocean is replenished continuously. All the systems of OTEC method work on a closed routine cycle and use low boiling organic fluids like ammonia, Propane, R – 12, R – 22 etc.

The tides in the sea are the result of the universal gravitational effect of heavenly bodies like sun and moon on the earth. Due to fluidity of water mass, the effect of this force becomes apparent in the motion of water, which shows a periodic rise and fall in levels which is in synthesis with the daily cycle of rising and setting of sun and moon. This periodic rise and fall of the water level of sea is called tide.

These tides can be used to produce electrical power which is known as tidal power. When the water is above the mean sea level, it is called flood tide and when the level is below the mean sea level, it is called ebb tide. To harness the tides, a dam is to be built across the mouth of the bay. It will have large gates and low-head hydraulic reversible turbines installed in it. A tidal basin is formed, which gets separated from the sea by dam. The difference in water level is obtained between the basin and sea. By using reversible water turbines, turbines can be run continuously, both during high tide and low tide. The turbine is coupled to a generator to produce electricity.

This is the energy which lies embedded within the earth. As the earth has a molten core, steam and hot water come naturally to the surface of the earth in some locations of the earth.

Two ways of electric power production from geothermal energy has been suggested. In one of these, heat energy is transferred to a working fluid which operates the power cycle. This may be particularly useful at places of fresh volcanic activity, where the molten interior mass of earth vents to the surface through fissures and substantially high temperatures, such as between 450° to 550° C can be found. By embedding coil of pipes and sending water through them temperatures can be raised. In the other, the hot geothermal water and or steam is used to operate the turbines directly. At present only steam coming out of the ground is used to generate electricity, the hot water is discarded because it contains as much as 30 per cent dissolved salts and minerals and these could cause serious rust damage to the turbine.

Energy from small hydro is probably the oldest and yet, the most reliable of all renewable energy sources. The term ‘small hydro’ has a wide range in usage, covering schemes having installed capacities from a few kW to 25 MW. In India small hydro schemes are further classified as micro hydro up to 100 kW plant capacity, mini hydro from 101 kW to 2000 kW and small hydro up to 25000 kW plant capacity. The advantage of this resource is that it can be harnessed almost everywhere in India from any nearby stream or canal – in the most environmentally benign manner, and without encountering any submergence, deforestation or resettlement problems which are generally encountered in the development of large hydro power development. Small hydropower development can reduce the load on conventional sources of energy. Small hydro technology is mature and proven. Civil works and installation of equipment involve simple processes, which offer ample employment opportunities to local people and use locally available material. Gestation period is also short. Simple and proven design concepts suit local conditions. The development of small-scale hydropower in India started almost in the pace with the world’s first hydroelectric installation in 1882 at Appleton USA. The 130 kW installations in Sidrapong (Darjeeling) in the year 1897 was the first installation in India. The other installations were Shivasamundram at Mysore (2000 kW) in 1911 and Chhaba (1750 kW) at Shimla in 1913. These plants were used primarily for lighting in important towns and are still working. The country has an estimated SHP potential of about 15000 MW. So far 514 SHP projects with an aggregated installed capacity of 1693 MW have been installed.

In recent years hydrogen has been receiving worldwide attention as a clean and efficient energy carrier with a potential to replace liquid fossil fuels. Significant progress has been reported by several countries including India on this front. Hydrogen has high-energy content. When burnt it produces only water as a by-product and is, therefore, environmentally benign. At present hydrogen is available as a by-product from several chemical processes, plants or industries.