The Karnataka government, which is aiming to add 4,200 Mw of power from renewable energy (RE) by 2014, requires an investment of Rs 22,950 crore at current prices. Presently, the state has an installed capacity of 2,987 Mw from RE sources out of a total potential of 28,686 Mw.
According to estimates prepared by the National Bank for Agriculture and Rural Development (Nabard), the state may fall short of an investment of Rs 5,400 crore after taking into account investments from various sources in the RE sector. However, the bank has suggested setting up a special fund to mobilise additional resources to fund various real estate (RE) projects in the state.
During the previous years, investment in the various renewable energy projects’ development has come from private entrepreneurs. However, during the previous three years of renewable energy development in the state, on an average annually about 300 Mw of capacity additions brought in only Rs 1,500 crore investment by private sector.
It is expected that the presently policy initiative of the government may bring in an additional investment of Rs 500 crore annually by the private sector. The solar initiatives may bring in additio-nal investment of about Rs 500 crore through private sector during the policy period. With this the private sector investment would amount to Rs 12,500 crore during the policy period.
The profit making public sec-tor undertakings my also invest in the RE projects and may bring in Rs 5,000 crore. This would leave a gap of Rs 5,400 crore, for which the policy recommends to set up a special fund and other measures. “The draft RE policy of the state also stresses the need for establishing a ‘single window clearance mechanism’, which could also cover execution of power purchase agreement, several fiscal, investment and other incentives for the renewable energy projects like exemption from entry tax on generation equipment,” Nabard said in its State Focus Paper prepared for Karnataka for 2012-13. According to the SFP, each taluk requires about 20-25 Mw power to meet the power dem-and in rural areas. There is a vast scope for exploiting different renewable energy sources in the state. Different players are showing interest in this sector. For instance, the Power Company of Karnataka Ltd (PCKL), a state utility enterprise, proposes to facilitate implementation of about 975 hydel/biomass power plants of 5 Mw each in all taluks of the state by private bidders.
However, Nabard has expressed concerns that large hydro-electric projects are not coming up due to environmental considerations among others. It has suggested to the state government to consider allowing corporates to cultivate plants, in shrub-forest areas, from which bio-fuel could be obtained.
The SFP has projected a pot-ential of Rs 96.5 crore for Karna-taka in the RE sector for the year 2012-13.