New Delhi: India aims to add about 35 gigawatts of renewable power generation capacity by 2015, a top official said on Tuesday, at an investment of about $55 billion as the country seeks to cut a power deficit and carbon emissions.
Most of the investment has to come from private firms, said Debashish Majumdar, head of Indian Renewable Energy Development Agency. India’s current generation from renewables is 16.5 GW.
Majumdar said the last fiscal ending March 2010 generated over $3 billion in renewable investments in India, and that figure will likely rise by 10-15% by end-March 2011.
“The renewable energy sector policy is giving healthy returns with the preferential tariff regime, attracting investments from the private sector,” the state-backed funding agency’s head said.
“Also these projects are of low gestation period, in six months time you can set up a 100 MW wind power project.”
Though coal remains the backbone of India’s energy policy, focus has grown on renewables such as solar, wind and nuclear, given the pressure on the world’s No. 3 greenhouse gas emitter to cut pollution while fostering economic growth.
But in India, the main driver of green energy is a huge demand-supply gap in electricity that is needed to power Asia’s third-largest economy as it aims to grow by double-digit in the coming years and provide power to 500 million people, almost half its population that has no access to electricity.
India faces a 12% power shortfall during hours of peak consumption, according to figures of the federal planning commission, which charts the country’s growth path.
The government has scaled down its power generation target for the current five-year-plan, which ends in March 2012, to 62,000 MW from an initial estimate of 78,700 MW
India has announced a new climate plan, which identifies renewable energy to reduce building of coal-fired plants. There are also plans to scale up solar and nuclear power generation to 20 gigawatts each by 2022.
But these are early days and solar’s steep costs, much like that of nuclear power, are a deterrent. The head of an Indian government panel has said renewables costs had to be brought down to near par with coal-based electricity by 2020.
India already makes loans to companies building alternative energy power plants and provides tax breaks and tariff subsidies to encourage the renewables industry and a gradually shift to a low-carbon economy.