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© Colourbox
Incredible India: Incredible Renewable Opportunities

February 18, 2008

by Achim Rodewald

Renewable Energy in Germany is one of the industrial sectors that have seen tremendous growth in the last few years. However, only a few German manufacturers have taken up business with India to exploit its tremendous growth potential in the field of Renewables.

India is the 4th largest country with regard to installed power generation capacity in the field of renewable energy sources and much is waiting to be discovered by Germany.

One piece of news really created headlines and also a lot of environmental and India-awareness in Germany during the first half of 2007: The bidding war between the Indian company Suzlon Energy Ltd. and the French Areva Group for the German REpower , which finally culminated in an agreement between both companies sharing the shareholding in REpower. It was probably the first time that the Germans got a fair idea about just how powerful an Indian player could be in the field of Renewable Energy.

This might have come as a surprise to the German public, but many energy experts already are well aware about India’s stronghold in the Renewable field. India is the 4th largest country with regard to installed power generation capacity in the field of renewable energy sources. However, this is just the tip of the iceberg, and much is waiting to be discovered, especially by the German Renewable Industry, one of the most developed industries worldwide, with its immense expertise and excellent reputation that forms an integral part of the ‘Made in Germany’-brand.

Give priority to India

Most of the German Renewable Manufacturers can boast of bulging order books and hence are a little hesitant to look into new opportunities. When business inquiries from new frontiers are pouring in, the reaction of many of the companies seems to a lame response: “Our order books are full; we can not entertain even one more market right now”. German manufacturers, however, should get their priorities right. Despite of its already high ranking with regard to installed renewable capacities, India has, as on 31st March 2006, covered a mere 4.4% of its estimated potential. As an economy growing at such a fast pace, it is clearly evident that the energy requirement and with that the business potential in India will also escalate.

More than 95% of opportunities still need to be developed

In its India 2007 survey, the Indian Government has published figures illustrating the potential it sees in the development of Renewable Energy in the subcontinent. The survey clearly shows that wind energy has far more potential than all the other possibilities of generating power from Renewables. With an installed capacity of more than 5 300 MW at the end of the financial year 2005/2006, India has more than doubled its installed wind energy capacity as compared to the FY 2004/2005. Around one fifth of this has been set up in the state of Maharashtra. In total, the installed wind energy capacity accounts for two thirds of the overall installed capacity of power generated from Renewables. What is very interesting in this regard is the estimated figure of the wind energy potential, which is a whopping 45 000 MW. Although Germany is already well represented in the field of wind energy in India through its major players Enercon and Suzlon, along with the acquired REpower, the potential of wind power in India is still by far not exhausted. Even catering solely to the Indian market and keeping the potential of wind power in India in mind, companies like Enercon as well as Suzlon, which is meanwhile the fifth largest producer by installed megawatts of wind energy capacity in the world surpassing even a major wind-turbine manufacturer like Siemens, the companies are still far from the end to their growth- and success stories in the subcontinent.

Is India underestimating its potential in solar energy?

As per the data provided by the Indian Government, the solar photovoltaic power sector grew from an installed capacity of 2.72 MW in 2004/2005 to 2.74 MW in 2005/2006. Considering that India is one of the warmest and most ‘sun-intensive’ countries in the world, this slow growth in establishing solar photovoltaic power plants comes as quite a surprise. One answer to the slow progress is most certainly the rising prices of silicon worldwide, one of the basic materials used in solar photovoltaic cells. On the other hand, even in the remote areas of Jammu and Kashmir, one finds many houses furnished with small solar modules trapping solar energy during the day and releasing it into one or two bulbs during the night. For people in the extreme North of India these solar modules are probably the only possibility to generate power for household purposes, at least for a few hours per day. It is said that the State Government of Jammu and Kashmir has programmes in place to promote and at least partly finance the electrical power demand of its people living in the remote areas of the Himalayas. As on 31st March 2006 nearly 54 800 Solar Street Lighting Systems, approximately 343 000 Home Lighting Systems as well as more than 478 000 Solar Lanterns have been installed in India, with more than 600 000 Solar Cookers and around 7 015 Solar Pumps being regularly used in the subcontinent.

That there is room for a lot of improvement can be illustrated by the example of the German city of Schönau. The whole city, located in the Black Forest area in the South-West of Germany, has disconnected itself from the power grids of the large energy generating companies, since they were not able to provide clean and green power, without nuclear power input. Hence the city, along with its citizens, decided to opt for all the renewable options, mainly solar photovoltaic power generation, to fulfill the power needs of the city and to establish themselves as the first clean and green powered city in Germany. For this purpose even the huge roof of the local church was completely covered with solar photovoltaic power modules. The church as a power generating unit – a completely new perspective to (religious) power and a laudable pioneering effort into a green and clean future!

If the solar photovoltaic power generation really wants to make inroads into the power mix of India, it will have to come cheaper, as investments into this technology are still comparatively high. Hence the Indian Government estimated its potential with only 5 000 MW. Compared to an installed capacity of 2.74 MW there is still a long way to go. Once the solar photovoltaic power generation becomes more viable, especially with regard to its investment-output-ratio, nothing will stop the rapid development of this sector.

Small Hydro Power already contributes with a share of 22.5%

Hydro Power Stations with a capacity of up to 25 MW already contribute around 1 830 MW to the energy mix generated from Renewables. The Indian Government has identified many places in less populated areas of the subcontinent, mainly in the Himalayan region, as possible locations for Hydro Power Plants. At present a huge Hydro Power Project is coming up at the banks of the river Indus, which will cater to the growing needs of the Indian population in the Indus valley. Even in the Small Hydro Power section the Indian Government is exploring options in the Deccan range of the southern peninsula. Especially in the field of Hydro Power, the Indian Government is keen on roping in the experience of foreign construction companies in order to execute these projects on BOT-basis like other infrastructure projects currently under way in India. The estimated potential of Small Hydro Power Plants is seen at 15 000 MW by the Indian Government.

Biomass provides the highest energy potential in India

Being a nation dominated by agricultural activities, India has a lot of potential in the fields of biomass, biomass gasification, biogas through fermentation and power cogeneration. Especially providing power to the rural areas, where organic waste of fruits, vegetables and oil seeds could be used to generate electricity or compressed gas as a fuel substitute for vehicles, could be a relief to the strained power grids in India, which at the moment are not even connecting all villages in the subcontinent. With an installed capacity of a little more than 900 MW by the end of the FY 2005/2006, biogas technology in India, mainly focusing on the use of cow dung, will have to go a long way to reach its estimated potential of 66 000 MW, which is by far the highest potential of any renewable energy source in the subcontinent. This potential should be quite a challenge for the German Biogas Industry with its high volume biogas plants since they could solve quite some energy problems. At present around 3.9 million family biogas plants using the so called “gobar gas”, powered by cow dung and mainly catering to the cooking needs of a family are part of the Decentralized Energy Systems in India.

With state-of-the-art technology, especially from Germany, India would be able to also create inroads into industries having organic waste as a byproduct, which could be the input source for modern biogas plants generating biogas through fermentation processes. Creating the CO2 gas by burning of the waste material, identified as one of the main culprits for the global warming, could be avoided. Two companies, Envitec and Biogas Nord, both from the German State of North Rhine-Westphalia, have already ventured into India with their different technologies, catering to different agricultural products as input for the generation of biogas. The big advantage of biogas is its dual use, either in a gas turbine to generate electrical energy or as a fuel substitute for vehicles, running independently from petrol, diesel or even compressed natural gas (CNG), since even this is of fossil origin.

To start with, the Indian Sugar Industry, one of the largest in the world, will benefit greatly from German biogas technology, developed by Biogas Nord and already successfully implemented in Latin America, by providing a solution for the press-mud problem. Press-mud is a waste product from the crushing process of sugarcane and has been used as a fertilizer component, not really being very energy efficient. With the biogas technology of Biogas Nord, the press-mud will be fermented into biogas, which will be used as fuel substitute for the vehicle park of the Warana Cooperative Society. The Society under the leadership of its Chairman, Vinay Kore, currently Minister for Non-Conventional Energy in the State of Maharashtra, has acquired a biogas plant of Biogas Nord comprising of this technology, bringing it to India for the first time. Many more of these plants will follow to provide some relief to the diesel bills of the troubled sugar industry in India and prevent the soil being sealed by the press-mud, currently just dumped in an uncontrolled manner. India has more than 400 sugar mills that could be potential customers of this technology developed by Biogas Nord. And even other options with other sorts of organic waste of products still have to be explored.

Credit Carbon Points as a benefit

The highlight of this package can be its recognition as a project under the Clean Development Mechanism (CDM), which allows the generation of Credit Carbon Points as well as selling them back to the big ‘energy’players in North Rhine-Westphalia, complying to the regulations of the agreement to reduce and stop the CO2-pollution being promoted and signed by the German Government. Here lies a huge potential for the Indian food processing industry and for the farmers catering to it – as well as for the biogas plant manufacturers from Germany. The KfW Bankengruppe with its different banks, owned by the Federal German Government and the Federal German States, offers attractive conditions for financing climate protection projects and for buying back the sanctioned credit carbon points, being a one-stop solution for all the financial processes required for the realization of such projects.

Will India walk the Renewable way?

Around 6.5% of the total energy generating capacity installed in the country can be credited to renewable energy sources, and the growth potential, as we have seen, is tremendous. Over the last two decades considerable expertise has been gained by the different stake-holders such as State Nodal Agencies, State Electricity Boards, NGOs and relevant Indian industries, however, a lot more needs to be done to make renewable energy available to the common man at an affordable price. Priority has to be given to create ecological and environmental awareness amongst Indians about the potential renewable energy has for the country, making it less dependent on (the import of) fossil fuels, currently increasing year by year to fulfill the power demands of Indian industries and society.

To further promote industrialization of the subcontinent the Government should even look into the possibility of setting up Special Economic Zones powered by Hybrid Systems of different Renewable Energy Sources within a micro grid solution. Here the North Sea island of Pellworm in North Germany would be a perfect example illustrating how a micro grid can be self sufficient for a certain area. Fights between farmers and industrialist with regard to land issues can be avoided, if the farmers are becoming a part of the industrialization process by giving them long term contracts for catering to the organic needs of biogas plants generating the power catering to the Special Economic Zones. Will India create the first Special Economic Zone exclusively powered by Renewable Energy? The subcontinent has the potential to do so – and Germany has the technology and the know-how to execute it. Could there be cleaner and greener results for a prospering and growing Indo-German economy and future?

Achim Rodewald is Environment Area Manager Renewable Energy, Editor German Publications at the IGCC.
© Indo-German Chamber of Commerce
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