Focusing on renewable energy, the business session on commercialisation and financing of renewable energy technologies stressed the experience to date of India, China, Indonesia, the Philippines and Sri Lanka. TERI's Dr R.K. Pachauri pointed out that renewables continued to "encounter resistance, with new policy perceived as a threat by supporters of existing energy." The secretary of India's Ministry of Non Conventional Energy Sources (MNES), Ashok Parthasarthi, added: "The main challenge facing our energy system is bringing about power sector reforms and the restructuring the state electricity boards."
In India, demand for electric power is likely to grow at around 9% a year over the next 15 years, requiring about 10,000 MW of new capacity a year. Demand is expected to triple by 2010 from the present installed capacity of 82,000 MW, with 80,000 villages still to be electrified. By the end of this year, an energy shortage of 14% and peaking deficit of 28% is expected.
With 825 MW of installed wind capacity, the effective production capacity of wind plant in India is presently only 500 MW. Parthasarthi regretted that renewables continued to remain outside national energy plans. He suggested that a higher tariff on fossil fuels would subsidise the development and promotion of renewables. "Utilities could be obligated through legislation to purchase renewable energy at fair prices," he said.
By the conclusion of India's 8th Plan period at the end of this month, around 7% of the total addition to generation capacity achieved during the period's five years is expected to have come from renewables. Of the total generating capacity of 88,000 MW expected in India at the end of the period, renewables are estimated to now account for 1.6% -- around 1400 MW. The total annual turnover of the renewables sector is now $556 million.
An updated renewable energy policy is being prepared for India and Parthasarthi said it would help create awareness and accelerate commercialisation. "The government also plans to introduce special legislation to promote renewables, as the present legislation governing the electricity sector is inadequate," he said.
A long term goal of 15,000 MW of grid power from renewables has been set for the year 2010. This would amount to a share of 6% of the projected installed capacity of 240,000 MW, or an addition of 1000 MW every year from renewables. Meanwhile, for the 9th Plan (1997-2002) a target of 3000 MW from renewables is expected to be achieved.
According to Ajit Gupta, renewable energy adviser at MNES, the ministry runs the world's largest wind resource assessment programme. Another 100 monitoring stations are being put to work in addition to the present 700. Already 1.1 billion kilowatt hours of wind power has been fed into the Indian grid. "We hope to overtake USA and Germany in the next plan period," he added.
Still upbeat
Subsidies to renewable energy currently amount to $69 million a year, said Gupta, but "we do not need subsidies once we have a level playing field with conventional energy and once tariffs are corrected." Until then, he stressed, fiscal correction was required. Meantime the mood in India was upbeat and Gupta had special praise for the Indian Renewable Energy Development Agency (IREDA). "A conducive policy on renewables has been announced by twelve states. IREDA, our most successful experiment as an agency dedicated to financing renewables, has high recovery rates, showing innate strengths of the project."
IREDA's managing director, Dr V Bakthavasalam, said that with the first line of credit from the Asian Development Bank (ADB) and the World Bank now in hand, "we have decided to take the risk in getting into commercial ventures. We have also proved that renewables mean business." On India's ongoing lack of ready currency for buying foreign technology he agreed that "things were slow" and the mood of the industry was "wait and watch" caution. An improvement in the situation will depend on this year's national budget, he said. IREDA loans continue at a high interest rate of 19%, but Bakthavasalam said there were no plans as yet to reduce this. He added that the ADB should follow a concessional rate policy. Procurement conditions remained cumbersome, though. "Unless these barriers are removed, the movement of the funds will be limited."
A main challenge to the growth of renewable energy in Asia's developing economies is the need for power sector reforms. This was one of the key themes of an international conference to define global strategies for energy development entitled Energy and Economic Growth -- Is Sustainable Growth Possible." It was organised in New Delhi in January by India's Tata Energy Research Institute (TERI) and the Indian Association for Energy and Environmental Economics (IAEEE), with special reference to Asian markets.
Focusing on renewable energy, the business session on commercialisation and financing of renewable energy technologies stressed the experience to date of India, China, Indonesia, the Philippines and Sri Lanka. TERI's Dr R.K. Pachauri pointed out that renewables continued to "encounter resistance, with new policy perceived as a threat by supporters of existing energy." The secretary of India's Ministry of Non Conventional Energy Sources (MNES), Ashok Parthasarthi, added: "The main challenge facing our energy system is bringing about power sector reforms and the restructuring the state electricity boards."
In India, demand for electric power is likely to grow at around 9% a year over the next 15 years, requiring about 10,000 MW of new capacity a year. Demand is expected to triple by 2010 from the present installed capacity of 82,000 MW, with 80,000 villages still to be electrified. By the end of this year, an energy shortage of 14% and peaking deficit of 28% is expected.
With 825 MW of installed wind capacity, the effective production capacity of wind plant in India is presently only 500 MW. Parthasarthi regretted that renewables continued to remain outside national energy plans. He suggested that a higher tariff on fossil fuels would subsidise the development and promotion of renewables. "Utilities could be obligated through legislation to purchase renewable energy at fair prices," he said.
By the conclusion of India's 8th Plan period at the end of this month, around 7% of the total addition to generation capacity achieved during the period's five years is expected to have come from renewables. Of the total generating capacity of 88,000 MW expected in India at the end of the period, renewables are estimated to now account for 1.6% -- around 1400 MW. The total annual turnover of the renewables sector is now $556 million.
An updated renewable energy policy is being prepared for India and Parthasarthi said it would help create awareness and accelerate commercialisation. "The government also plans to introduce special legislation to promote renewables, as the present legislation governing the electricity sector is inadequate," he said.
A long term goal of 15,000 MW of grid power from renewables has been set for the year 2010. This would amount to a share of 6% of the projected installed capacity of 240,000 MW, or an addition of 1000 MW every year from renewables. Meanwhile, for the 9th Plan (1997-2002) a target of 3000 MW from renewables is expected to be achieved.
According to Ajit Gupta, renewable energy adviser at MNES, the ministry runs the world's largest wind resource assessment programme. Another 100 monitoring stations are being put to work in addition to the present 700. Already 1.1 billion kilowatt hours of wind power has been fed into the Indian grid. "We hope to overtake USA and Germany in the next plan period," he added.
Still upbeat
Subsidies to renewable energy currently amount to $69 million a year, said Gupta, but "we do not need subsidies once we have a level playing field with conventional energy and once tariffs are corrected." Until then, he stressed, fiscal correction was required. Meantime the mood in India was upbeat and Gupta had special praise for the Indian Renewable Energy Development Agency (IREDA). "A conducive policy on renewables has been announced by twelve states. IREDA, our most successful experiment as an agency dedicated to financing renewables, has high recovery rates, showing innate strengths of the project."
IREDA's managing director, Dr V Bakthavasalam, said that with the first line of credit from the Asian Development Bank (ADB) and the World Bank now in hand, "we have decided to take the risk in getting into commercial ventures. We have also proved that renewables mean business." On India's ongoing lack of ready currency for buying foreign technology he agreed that "things were slow" and the mood of the industry was "wait and watch" caution. An improvement in the situation will depend on this year's national budget, he said. IREDA loans continue at a high interest rate of 19%, but Bakthavasalam said there were no plans as yet to reduce this. He added that the ADB should follow a concessional rate policy. Procurement conditions remained cumbersome, though. "Unless these barriers are removed, the movement of the funds will be limited."
dialogue in asia on sustainable GROWTH
A main challenge to the growth of renewable energy in Asia's developing economies is the need for power sector reforms. This was one of the key themes of an international conference to define global strategies for energy development entitled Energy and Economic Growth -- Is Sustainable Growth Possible." It was organised in New Delhi in January by India's Tata Energy Research Institute (TERI) and the Indian Association for Energy and Environmental Economics (IAEEE), with special reference to Asian markets.
Focusing on renewable energy, the business session on commercialisation and financing of renewable energy technologies stressed the experience to date of India, China, Indonesia, the Philippines and Sri Lanka. TERI's Dr R.K. Pachauri pointed out that renewables continued to "encounter resistance, with new policy perceived as a threat by supporters of existing energy." The secretary of India's Ministry of Non Conventional Energy Sources (MNES), Ashok Parthasarthi, added: "The main challenge facing our energy system is bringing about power sector reforms and the restructuring the state electricity boards."
In India, demand for electric power is likely to grow at around 9% a year over the next 15 years, requiring about 10,000 MW of new capacity a year. Demand is expected to triple by 2010 from the present installed capacity of 82,000 MW, with 80,000 villages still to be electrified. By the end of this year, an energy shortage of 14% and peaking deficit of 28% is expected.
With 825 MW of installed wind capacity, the effective production capacity of wind plant in India is presently only 500 MW. Parthasarthi regretted that renewables continued to remain outside national energy plans. He suggested that a higher tariff on fossil fuels would subsidise the development and promotion of renewables. "Utilities could be obligated through legislation to purchase renewable energy at fair prices," he said.
By the conclusion of India's 8th Plan period at the end of this month, around 7% of the total addition to generation capacity achieved during the period's five years is expected to have come from renewables. Of the total generating capacity of 88,000 MW expected in India at the end of the period, renewables are estimated to now account for 1.6% -- around 1400 MW. The total annual turnover of the renewables sector is now $556 million.
An updated renewable energy policy is being prepared for India and Parthasarthi said it would help create awareness and accelerate commercialisation. "The government also plans to introduce special legislation to promote renewables, as the present legislation governing the electricity sector is inadequate," he said.
A long term goal of 15,000 MW of grid power from renewables has been set for the year 2010. This would amount to a share of 6% of the projected installed capacity of 240,000 MW, or an addition of 1000 MW every year from renewables. Meanwhile, for the 9th Plan (1997-2002) a target of 3000 MW from renewables is expected to be achieved.
According to Ajit Gupta, renewable energy adviser at MNES, the ministry runs the world's largest wind resource assessment programme. Another 100 monitoring stations are being put to work in addition to the present 700. Already 1.1 billion kilowatt hours of wind power has been fed into the Indian grid. "We hope to overtake USA and Germany in the next plan period," he added.
Still upbeat
Subsidies to renewable energy currently amount to $69 million a year, said Gupta, but "we do not need subsidies once we have a level playing field with conventional energy and once tariffs are corrected." Until then, he stressed, fiscal correction was required. Meantime the mood in India was upbeat and Gupta had special praise for the Indian Renewable Energy Development Agency (IREDA). "A conducive policy on renewables has been announced by twelve states. IREDA, our most successful experiment as an agency dedicated to financing renewables, has high recovery rates, showing innate strengths of the project."
IREDA's managing director, Dr V Bakthavasalam, said that with the first line of credit from the Asian Development Bank (ADB) and the World Bank now in hand, "we have decided to take the risk in getting into commercial ventures. We have also proved that renewables mean business." On India's ongoing lack of ready currency for buying foreign technology he agreed that "things were slow" and the mood of the industry was "wait and watch" caution. An improvement in the situation will depend on this year's national budget, he said. IREDA loans continue at a high interest rate of 19%, but Bakthavasalam said there were no plans as yet to reduce this. He added that the ADB should follow a concessional rate policy. Procurement conditions remained cumbersome, though. "Unless these barriers are removed, the movement of the funds will be limited."
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