Renewable Energy in India provides opportunities and challenges. India has significant renewable energy potential from sources like solar, wind, biomass and small hydro. The country is focused on developing renewable energy to reduce emissions, energy imports and power shortages. Key policies support renewable energy development through preferential tariffs, renewable purchase obligations and other regulations. However, intermittent sources, transmission infrastructure and high costs remain challenges to large scale renewable energy adoption in India.

1. Renewable Energy in India:
Opportunities and Challenges
Pallav Purohit
Visiting Fellow, GCD Project, UEA
University of Cambridge
27th April 2010

2. Contents
Why renewable energy (RE)?
RE use in developing countries
RE in India – Historical perspective
RE in India – Potential(s) and achievements
Regulatory support for RE development in India
Future growth drivers for RE in India

3. Why renewable energy?
• Climate change
– to reduce the emission intensity of its GDP by 20-25% by
2020 through domestic mitigation actions
• Rising prices of oil and gas
– India imports 70% of its crude oil requirement
• Ever increasing demand for energy
– 13.3% peak power shortage between April 09-Mar 10 (CEA,
2010)

4. RE use in developing countries
• Low energy consumption and • Large, inexhaustible source
poor quality of life
• Clean source of energy
• Oil import related problems
• Low density: dilute source of
• Availability of renewable energy energy
resources (solar, wind, hydro,
• High costs due to the large
biomass etc.) collection areas
• Low purchasing power of • Availability varies with time (i. e.
potential users intermittent source of energy)
• Fuel gatherers not buyers • Additional cost due to the
storage requirements (i. e. PV
• Unemployment and systems)
underemployment

5. Macro-economic development and energy use in India
800% 80
700% 70
600% 60
50
500%
Exajoules/year
Relative to 2005
40
400%
30
300%
20
200%
10
100%
0
0% 1990 1995 2000 2005 2010 2015 2020 2025 2030
1990 2000 2010 2020 2030
GDP Total energy consumption Coal Oil Gas Renewables Hydro Nuclear Biomass
GDP/capita Population
Source: GAINS/IIASA

6. Overview of Indian power sector
Renewable
10%
Nuclear
3%
Coal
52%
Thermal
Hydro
23% Gas
11%
Oil
1%
Coal Gas Oil Hydro Nuclear Renewable
Thermal Hydro Renewable Nuclear Total
100,599 MW 36,863 MW 15,427 MW 4,340 MW 157,229 MW
As on 28th February 2010
Source: Ministry of Power

7. RE in India - Historical perspective
• 1972 - R&D activities initiated by Department of Science and Technology (DST)
• 1981 - Commission for Additional Sources of Energy (CASE) set up as apex
national policy making body
• 1982 - Separate Department of Non-conventional Energy Sources (DNES) set
up to provide thrust
• 1987 - Indian Renewable Energy Development Agency (IREDA) - a non banking
financing institution was set up
• 1992 - Full fledged Ministry of Non-conventional Energy Sources (MNES) set up
– resource assessment, technology development and demonstration
• 2006 - Ministry renamed as Ministry of New And Renewable Energy (MNES)
– Several technologies are now commercially viable

8. Organization of the energy sector
G Planning
Power and energy Energy Policy Rural Energy
Commission
O Division Division Division
V
E Ministry
R of Coal Mining companies
CIL/NLC
CCO Other organizations
N
M
Ministry
E of Power Generation companies T&D companies Power finance Power trading PFC
Regulatory Energy Research and
CEA organizations conservation Training
N NTPC/NHPC •POWERGRID PFC/REC PTC
CERC/ATE BEE CPRI/NPTI
T
Ministry of
Petroleum and E&P companies Refineries Engineering Advisory org. Financial
O Natural Gas •ONGC/OIL •CPCL/BRPL
Marketing companies Integrated oil companies
companies CHT/DGH institutions
•IBP/GAIL/IGL/MGL IOCL/HPCL/BPCL
/OVL •/NRL/MRPL EIL /OISD/PCRA/PPAC OIDB
F
Ministry of New
and Renewable
I Energy Financial institution
R&D, testing, certifying
Supervisory organizations
Institutions
•IREDA •9 regional offices
N •SEC, C-WET, SSS-NIRE
D
Department
I of Atomic Research institutions Generation Input providers Other Financial Regulatory
A Energy AEC BARC/IGCAR/RRCAT
T&D companies
•POWERGRID
companies HWB/NFC organizations institutions organizations
/VECC/AMD NPCIL/BHAVINI /IREL/UCIL BRIT/ECIL BRNS AERB

9. Governance of RE sector in India
Secondary Stakeholders Primary Stakeholders
Ministry of Power
R&D support Ministry of New and Renewable Energy
Financial
RE Products
Ministry of Environment and Forest Assistance R&D Support
Financial Institutions State Nodal Agencies Research Organizations
Department of Science and Technology (GEDA, MEDA, TEDA, (SEC, C-WET, NIRE)
(IREDA)
PEDA, UREDA etc.) Universities/IIT’s)
Implementation
Implementation support R&D
support
Support
Central and State Regulators Implementing Agencies and NGOs
Multilateral Agencies RE Products Financial
Assistance
Financial Assistance
Manufacturers/Vendors
Educations and Research Institutes
Users or Consumers

10. RE in India – Power from renewables
Wind - 70%, Small hydro -
16%, Bagasse cogeneration -
8%, Biomass power - 5%
S. No. Sources / Systems Unit Estimated potential Cumulative Achievements
(upto 31.12.2009)
A. Grid-interactive renewable power
1. Biomass Power (Agro residues) MW 16,881 835
2. Wind Power MW 48,500 10,925
3. Small Hydro Power (up to 25 MW) MW 15,000 2,559
4. Cogeneration-bagasse MW 5,000 1,302
5. Waste to Energy MW 2,700 65
6. Solar Power MW/km2 50 6
Sub Total (in MW) (A) MW 88,081 15,692
B. Off-Grid/Distributed Renewable Power (including Captive/CHP Plants)
7 Biomass Power / Cogen.(non-bagasse) MW 5,000 211.0
8. Biomass Gasifier MWeq. 16,000 110.0
9. Waste-to- Energy MWeq. --- 38.0
10. Solar PV Power Plants and Street MWp --- 2.4
Lights
11. Aero-Generators/Hybrid Systems MW --- 0.9
Sub Total (B) MWeq. 362.3
Total ( A + B ) MW 16,053.3
Source: Ministry of New and Renewable Energy

11. RE in India – Decentralized energy systems
S. No. Sources / Systems Unit Cumulative Achievements
(upto 31.12.2009)
II. Remote Village Electrification Villages/ Hamlets 4997/1257
III. Decentralized Energy Systems
12. Family Type Biogas Plants Mln. 4.20
13. SPV Home Lighting System Mln. 0.51
14. Solar Lantern Mln. 0.77
15. Solar Cookers Mln. 0.67
16. Solar Water Heating - Collector Area Mln. m2 3.25
17. SPV Street Lighting System No. 82,384
18. SPV Pumps No. 7,247
19. Wind Pumps No. 1347
IV. Other Programmes
20. Energy Parks No. 511 nos.
21. Akshay Urja Shops No. 284 nos.
Source: Ministry of New and Renewable Energy

12. Wind energy in India
• Current Scenario
– 5th largest producer of wind
energy in the world with a
capacity of >11 GW
– Tamil Nadu, Gujarat,
Maharashtra and Karnataka are
the leaders in wind capacity.
• Key Issues
Sea coast + Desert
Areas (Av. PLF – Short construction period and
of 18-20%) low O&M cost make it an
attractive proposition
– Some regulatory /institutional
Forest & Mountainous hurdles exist for wheeling
region (Av. PLF
of 18-30%)
• Future Potential
– Cumulative installed capacity is
Mountainous, Sea expected to reach 12GW by
coast areas (Av.
PLF of 25-30%)
December 2010 (22% CAGR
over the last 10 years)
– Reassessment of true wind
potential of India. (C-WET: 48
GW, IWTMA: 65-70 GW, WISE:
Source: C-WET 100 GW, GWEC:250 GW).

13. State-wise break-up of wind power potential and
achievements so far (as on March 31, 2009)
12000 11531
10645
10000
8968
>78%
8000
>42%
MW
6000 5530
4584 4858
4305
4000
<2%
1939
2000 1567 1327 1171
1019 738
123 27 213
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Source: MNRE

14. No. 1 along with US in terms of
solar energy yield as per survey
conducted by McKinsey & Co.
(1700 to 1900 kWh/kWp per
Solar energy in India
annum)
Among the top 5 in terms of
overall country attractiveness for
RE as per E&Y’s report (Ranking
based on regulatory environment,
• Natural availability
fiscal support, unexploited
resources, suitability to
– Many parts of India have
technologies etc.) 300~330 sunny days in a year
• Current potential
– Daily solar radiation 4 - 7 kWh
per sq. m. which translates into
a potential for 600 GW
• Potential to meet future demand
– 5000 trillion kWh solar radiation
incident in a year which is a
thousand times greater than the
likely demand in electricity in the
year 2015
• Environmental footprint
– High solar insolation and yield
results in lesser land
Source: MNRE requirement

15. •Increasing solar capacity to 20GW
by 2020, 100GW by 2030 and
200GW by 2050
National solar mission – targets
•Solar power cost reduction to reach
grid parity by 2020
•Solar power cost reduction to reach
parity with coal based thermal
generation by 2030
MNRE till Phase I Phase II Phase III Total
2009 2010-2013 2013-2017 2017-2022
Grid-connected solar (MW) 6 1,100* 3,000 16,000 20,000
(331) (750) (3,200)
Off-grid solar (MW) 2.4 200 800 1,000 2,000
(66) (200) (200)
Solar thermal collectors (million m2) 3.1 7 8 5 20
(1.3) (2) (1)
Solar lighting systems (million) 1.3** no phase-wise targets 20***
(1.6)
Note: Figures in parentheses indicate the implicit annual targets in each phase, assuming that MNRE achievements to date are a
part of the NSM targets.
* The NSM document mentions a target of 1000 to 2000 MW for Phase I.
** Solar lighting systems to date include solar lanterns and solar home lighting systems.
*** Phase-wise targets are yet to be provided.

16. Regulatory support for RE development
• Electricity Regulatory Commissions Act, 1998
– The state commissions became the key player for regulating the electricity
sector including determining tariffs
• Electricity Act, 2003
– Promoted generation of electricity from RE.
• Section 3: National Electricity Policy and Plan including optimal
utilization of RE
• Section 4: National policy permitting stand alone system (including
those based on RE sources of energy) for rural areas
• Section 61: The appropriate commission while determination of tariff
shall be guided by promotion of co-generation and generation of
electricity from RE
• National Electricity Policy, 2005
– The Policy emphasized on the full development of feasible hydro projects
and laid down procedures for the speedy implementation of the same.

17. Regulatory support for RE development
• Integrated Energy Policy, 2006
– Emphasized use of RE for reducing dependence on energy imports.
• Rural Electrification Policy, 2006
– The Policy recognized that non-conventional energy sources can be
appropriately and optimally utilized to make available reliable supply of
electricity to each and every household.
• National Tariff Policy, 2006
– SERCs to fix minimum percentage for purchase of energy from RE sources
taking into account availability of such resources in the region and its impact
on retail tariffs

18. Preferential tariff orders declared by SERCs
for different technologies
Source: Respective SERC orders

19. Snapshot of state-wise policies
(minimum RPO obligation numbers for FY09)
Snapshot of policy decisions of different SERCs
Maharashtra Karnataka Gujarat
RPO (FY09) 5% 5% 2%
Maximum purchase specified No Yes No
RPO on CPP and OAC Yes No No
Penalty levied (Rs/kWh) 5 No No
Penalty paid to MEDA NA NA
Obligation trading mechanism Yes No No
(REC)
Andhra Rajasthan Madhya
Pradesh Pradesh
RPO (FY09) 5% 6.25% 10%
Maximum purchase specified No Yes No
RPO on CPP and OAC Yes Yes No
Penalty levied (Rs/kWh) Yes 3.59 No
Penalty paid to – STU NA
Obligation trading mechanism No No No
(REC)
Source: Respective SERC tariff orders

20. National Action Plan on Climate change
• Target for RE purchase may be set at 5% of total grid purchase
– To be increased by 1% each year for 10 years.
• SERCs may set higher target than this minimum at any point in time.
• Central & State Governments may set up a verification mechanism to
ensure that RE power is actually procured.
• Appropriate authorities may issue certificates that procure RE power in
excess of the national standard
– Such certificates may be tradable, to enable utilities falling short to meet
their RPS.
• Penalties as may be allowed under EA 2003 may be levied
– If utilities are still falling short in RPS.

21. Future growth drivers for RE in India
• Demand supply gap and natural resource scarcity
– Supply regularly being over stripped by demand
– Limited amount of fossil-fuel resources
• Large RE potential
– Abundance of sites for tapping RE
• Availability of new forms of capital
– India emerging as a dominant player in CDM
• Fiscal incentives provided by government
– Various incentives provided by the govt. to make RE projects attractive
• Increasing state level initiatives
– Punjab, Haryana, AP taking the lead in development of RE projects

22. Thank you!
For further information:
purohit@iiasa.ac.at

23. CDM statistics
Annual Average Expected CERs until
CERs* end of 2012**
CDM project pipeline: > 4200 of which: N/A > 2.9 billion
--- 2143 are registered 354 million > 1.8 billion
--- 72 are requesting registration 12 million > 20 million
* Assumption: All activities deliver simultaneously their expected annual average emission reductions
** Assumption: No renewal of crediting periods

24. CO2 mitigation potential of RE in India
250 500
200 400
CO2 emissions (Mt)
CO2 emissions (Mt)
150 300
100 200
50 100
0
0
2012 2016 2020 2012 2016 2020
Solar Wind Biomass Small hydro Solar Wind Biomass Small hydro
BAU Scenario Optimistic Scenario
Source: Own estimates