India’s Renewable Energy Potential Remains Untapped

India has tremendous energy needs and an increasing difficulty in meeting those needs through traditional means of power generation. On July 30th and 31st, 2012 the world’s largest blackout, The Great Indian Outage, stretching from New Delhi to Kolkata occurred. This blackout, due to failure of the northern power grid, caused nearly 700 million people — twice the population of the United States — to be without electricity.

A grid failure of such magnitude has thrown light onto India’s massive demand for electricity, together with its struggle to generate as much power as it needs.  India is aiming to expand its power-generation capacity by 44 percent over the next five years but recent problems indicate the scale of the challenge.  Even before the blackout, in June of 2012, the country’s power generation fell short by 5.8 percent when confronted with a peak-hour demand of 128 GW, according to Government data.

Electricity consumption in India has been increasing at one of the fastest rates in the world due to population growth and economic development.  India’s economy faces increasing challenges because energy supply is struggling to keep pace with demand, and there are energy shortages (as much as 15 percent daily) almost everywhere in the country.  Such chronic lack of energy and unreliable supplies threaten India’s economic growth.

So, what can India do to meet the future energy demands and help eliminate wide-ranging power outages in the future?  The Government needs to make an assessment of how best to address the power needs to meet the future growth and prevent such massive power failures.  India’s power blackout is an opportunity for developing sustainable energy solutions.

For economic as well as environmental reasons India needs to shift to non-polluting renewable sources of energy to meet future demand for electricity.  Renewable energy is the most attractive investment because it will provide long-term economic growth for India.  A favorable renewable energy policy could create millions of new jobs and an economic stimulus of at least US$1 trillion, and perhaps much more if all indirect economic (ripple) effects are included.  “India is the Saudi Arabia of renewable energy sources and if properly utilized, India can realize its place in the world as a great power,” Rifkin says.

Renewable energy also has the advantage of allowing decentralized distribution of energy — particularly for meeting rural energy needs, and thereby empowering people at the grass roots level.  Solar electricity could also shift about 90 percent of daily trip mileage from petroleum to electricity by encouraging increased use of plug-in hybrid cars.  For drivers in India this means that the cost per mile could be reduced by a quarter in today’s prices.

India does not have an overarching energy strategy — instead it has a number of disparate policies.  Rather than promoting an overarching energy strategy, to date India has developed a cluster of energy business models and policies that have not been productive.  These policies are definitely affecting renewable energy expansion plans.  The present business model needs to be changed from a centralized to a decentralized structure that allows all stakeholders including capital investment coming from state-owned investors, pension funds, and foreign countries.

This new business model should include the development of all forms of “distributed” (i.e. non-grid) energy such as solar, wind, hydro, biomass, biogas, and geothermal.  Distributed energy not only reduces the huge amount of energy lost in grid distribution, it also helps lighten the load on the grid.  Distributed energy is a critical part of the real energy revolution in achieving a cost effective smart grid solution.  All forms of distributed power, micro-generation and micro-grids should be incorporated into the electrical supply system to make the system more reliable.  India is in a unique position to introduce clean energy solutions on an enormous scale to provide affordable energy for everyone — especially the poor.

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