13-07-2012, 03:31 PM
Clean Energy
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India: Energy Overview
Clean energy technologies have received unprecedented
attention in the last few years in India as its energy demand
grows every year. This is largely a result of India’s
economy, which has steadily advanced over the last
30 years, averaging a 7 percent per year growth since
2000. During 2004 and 2005, only China’s economy grew
faster. With 1.1 billion people, India is the world’s second
most populous country behind China and is expected to
have the world’s largest population by 2030. Further population
increases and the country’s continued economic
growth are expected to increase India’s energy demand
from 537 million tons of oil equivalent (Mtoe) in 2005 to
770 Mtoe in 2015 and to 1,299 Mtoe by 2030.
Energy Efficiency, Co-Generation, and Transportation
India’s energy efficiency potential mostly comes from
supply side high-efficiency, low-emission coal, thermal,
or electric power generation. Transmission and distribution
losses have been recorded to exceed 25 percent,
indicating a potential market for firms able to reduce these
inefficiencies. Industry has been a major target of the
energy efficiency effort, as it accounts for 50 percent of the
total commercial energy use in India.
Market Analysis
In India’s 11th Five-Year Plan, the government aims to
achieve a GDP growth rate of 10 percent and maintain
an average growth of about 8 percent during the next
15 years. This growth will be highly dependent on the
expansion of the country’s energy consumption. Due to
rapidly expanding demand for power, a capacity addition
of over 100,000 MW is planned through 2011 and
2012. Though this is largely based on growth of thermal
generation, the contribution of electricity from renewable
sources is expected to increase, with wind energy
continuing to lead the way.
Energy Policy
India’s energy sector has undergone a significant renaissance
over the last decade as a number of new policies
have created both the institutions to promote clean
technology development but also the momentum and
government support needed to see projects through to
completion. New policies include the National Environment
Policy, which provides guidance on air pollution reduction,
climate change, and GHG mitigation; promotion
of clean technologies; and the measurement of efficiency
per unit of economic output. The National Tariff Policy
establishes power purchase tariffs for the State Electricity
Regulatory Commissions. India’s Ministry of New and Renewable
Energy has issued a draft renewable energy policy
that identifies the strategies for increased deployment of
grid-connected renewable energy technologies. The country’s
Rural Electrification Policy goals include provision of
access to electricity to all households by the year 2009.
Opportunities for U.S. Clean Technology Firms in India
Opportunities for U.S. clean tech firms are numerous in
India thanks to the scope of energy demand and the government’s
warm response to energy efficiency and renewable
technologies. According to India’s integrated energy
policy, in order to deliver a sustained growth of 8 percent
through 2031, India will need to expand its primary energy
supply by at least three to four times and electricity supply
by five to seven times its current consumption. As such,
the power sector is expected to add over 150,000 MW over
the next 15 years, of which at least 10 percent is expected
to come from renewable energy technologies. Different
states are in the process of issuing tariff orders for renewable
energy electricity generation and specifying quotas
for power from renewable energy in accordance with the
Electricity Act of 2003. This government push can translate
into major opportunities for foreign firms.
Conclusion
Clean energy technologies have moved to the forefront
of India’s energy infrastructure and investments opportunities.
This is driven by the need to enhance energy
security and fuel diversity, meet increasing energy needs
in an environmentally sustainable manner, and advance
economic and social development, all while reducing
poverty and sustaining economic growth. Though
barriers exist from a technology, policy, and investment
perspective, India promises to be one of the largest
markets for clean energy, and U.S. companies have a
significant role to play in both trade and investment.