India is one of the fastest growing economies and embracing the process of a transition to a Green Economy. It offers excellent opportunities for business and science and technology collaborations in renewable energy.

Market Snapshot

India’s renewable energy market has witnessed strong growth in recent times because of supportive government policies and participation of large number of private players. The government aims to add 17,000 megawatts (MW) of renewable energy over five years starting 2012, which would need an investment of more than $3 billion, stepping up the country’s focus to develop clean energy sources.

The Ministry of New and Renewable Energy (MNRE) has been facilitating the implementation of broad spectrum of renewable energy programmes involving industry and government and private organizations. Electricity Act 2003 was the first comprehensive framework that spurred development of renewable power in the country unfolding a developing regulatory structure composed of preferential tariffs, renewable purchase obligation and leading over to facilitating renewable energy certificates.

Renewable Energy Sector Trends

Wind energy is currently leading the pack with more than 13,000 MW installed capacity followed by small hydro (2850 MW), biomass and bagasse cogeneration (2400 MW), and solar (18 MW). The off-grid capacity adds another 460 MW to the whole capacity. Investments in the renewable energy sector have soared with rapidly growing generating capacities as well as manufacturing capabilities.
Indian Renewable Energy Development Agency (IREDA), the corporate financing arm of MNRE is providing sustained financing support to the sector including banks and financial institutions. Venture capital and private equity investments in the sector have also been growing. The government has also now laid emphasis on solar energy by having a target of 20,000 MW by 2020 under the Jawaharlal Nehru Solar Mission Program (http://mnre.gov.in/pdf/mission-document-JNNSM.pdf).

Recent Developments

The Cabinet Committee on Economic Affairs (CCEA) has approved the constitution of the National Clean Energy Fund (NCEF) to finance renewable energy projects. The CCEA has formed an inter-ministerial group under the union finance secretary to approve projects and schemes eligible for financing under the NCEF.
The Tata Power company has partnered with Australia based Sunengy Pty Ltd to build India’s first floating solar power plant. The pilot project will use the liquid solar array technology wherein solar PV panels float on water and are not mounted on a frame.

The Gujarat State has set up a solar park at Patan district in the State with an investment of approximately $1.7billion. The State Government has already acquired 2,500 acres of land and Gujarat Urja Vikas Nigam Ltd is in the process of signing long-term power purchase agreements with about 80 project developers.

Key Opportunities

SJVN Ltd, a joint venture between the center and Himachal Pradesh Government, is planning to set up a 50 MW wind power project at an investment of $65 million by 2012. It has short listed sites in Tamil Nadu, Maharashtra, Andhra Pradesh, Kerala, Rajasthan, Madhya Pradesh and Gujarat to set up the project. Rooftop solar which has nearly a potential of 230 GW offers great opportunities to developers under the Jawaharlal Nehru National Solar Mission (JNNSM), the flagship program for the development of solar power in India. The Neyveli Lignite Corporation (NCL) expects to commission its 50 MW wind power project at Tirunveli (Tamil Nadu) by March 2012 and intends to prepare a feasibility report right after.

India Bulletin: Renewable Energy Sector.