The three musketeers

SECTORAL UPDATE

India's wind, hydel and nuclear power potential remains untapped.

While India is ranked among the wind "super powers" in the world, the hydel and nuclear power generation potential in the country is yet to be harnessed fully.

According to a Planning Commission estimate, there is a combined potential of 6.95,000 mega watts (Mw) of power generation from these three sectors alone.

On the wind front, India ranks fourth on the Ernst & Young Renewable Energy Country Attractive Index. With the government setting targets for every state to buy electricity from renewable sources with tariff incentives, the sector is looking more attractive to private players.

Apart from Suzlon, which has acquired global footprints over the last 18 months, other players in the Indian wind sector include Enercon and Vestas RRB (a JV between Vestas of Denmark and the RRB group of Chennai to manufacture smaller turbines).

The sector is also attracting major international players with Re Power of Germany and AES looking at setting up wind energy businesses in India. Vestas is also drawing up plans to manufacture large capacity turbines from its wholly owned Indian subsidiary for the Asian markets.

Given the level of interest from industry, in the medium term, the Indian wind energy target is expected to be increased by 5,000 Mw, an E&Y report points out.

There is a larger story brewing in hydro-power. The accelerated hydro power development plan, drawn up by the ministry of power, aims to build around 50,000 Mw of hydel capacity in the country by 2025, of which 25,690 Mw capacity will be installed in Arunachal Pradesh. The state has already signed MoUs for close to over 20,000 Mw with private developers on a Build-Operate-Own basis.

And then there is nuclear energy. The fuel shortage faced by the Indian nuclear power sector because of the international embargoes is expected to be over soon with the signing of the Indo-US nuclear deal.

The treaty has come at a crucial time for the Indian nuclear programme which is set to move from the pressurised heavy water reactor (PHWR) technology to the fast breeder technology by 2010.

The fast breeder reactors will recycle spent fuel from the earlier PHWR cycle, and by using thorium as blanket material, will produce fuel for the third stage of the programme.

The Indo-US agreement could help India import newer technologies such as advanced heavy water reactor and light water reactor.

All for credits

Although India is a signatory to the United Nations Framework on Climate Change, she has a relatively greenhouse gas (GHG) benign growth path with less than 3 per cent of the global GHG emissions. Also, the country's share of renewable energy is 36 per cent , far higher than most developed economies.

India has the potential to generate around 700 million carbon credits but it is expected that only 350 million credits will actually realise as the failure rate is quite high, with Rajasthan, Gujarat and Maharashtra alone having the potential to generate 50 per cent of Certified Emission Reductions (CER) units.

The National Clean Development Mechanism Authority (NCDMA) has approved around 297 projects with an expected 236 million CERs till 2012 with an investment of Rs 19,092 crore.

The projects approved include energy efficiency, fuel switching industrial processes, renewable and biomass projects.

New age fuel

With oil prices skyrocketing, biofuels, especially ethanol, are here to stay. The petroleum ministry's mandatory ethanol blending programme is already in place, and the sector is attracting interest from big names in corporate India like Reliance Industries and the Adi Godrej group.

Many of the smaller players such as Jain Irrigation and Mint Bio Fuels are already looking at expanding their presence.

At 5 per cent blending, the annual requirement for ethanol will be to the tune of 587 million litres. The Indian sugar industry has an installed ethanol capacity of 1,300 million litres.

However, much of this goes towards the production of molasses. The oil marketing companies have expressed concern over whether sugar mills can sustain supply, especially as the programme is slated to move towards 10 per cent blending.

Biomass based fuels account for around 81 per cent of the domestic energy use in India with about 110 million tonnes of oil equivalent of biomass fuels being used in 2000. These include cow dung cakes, agricultural by-products and wood.

According to a Planning Commission estimate, the total use of biomass based fuels in the country, including domestic and unorganised industries, could be as much as a third of the entire energy consumption of the country.

The Commission predicts that biomass based fuel consumption will rise in absolute terms and right up to 2031-32. It has suggested a technology mission for improving the efficiency of wood gassification and biogas plants.