Why India's Green Energy 12th Five Year Plan Target of 17000 MW is Too Low

Renewable Energy in India has seen decent growth in the past mainly driven by Wind Energy which accounts for almost 65% of the estimated 20 GW of Green Energy capacity installed in the country.However to meet India’s 2020 Green Energy Target of 15% of power to be generated from renewable sources set by CERC,at least 40 GW more would need to be installed (that is a conservative estimate as load factors for green energy are lower).This is assuming that India meets its target of raising the power capacity to 400 GW by 2020 from around 175 GW at present. Solar Energy in India has not got off to a good start despite immense potential as the federal subsidy program JNNSM has seen irrational bidding by bit players and debt financing is difficult. Wind Power in India has seen the most growth amongst the green sources of power but it too faces hurdles as good quality wind sites have all been taken.

Why 17000 MW is too Low

Biomass,Small Hydro and other sources of green power face problems of scale making the 40-80 GW of the required green energy capacity quite difficult unless the government changes its policies even more.Note 17 Gw of renewable energy between 2012 and 2017 equates to around 3 GW of alternative energy capacity per year which is much lower than the 4-8 GW of green energy needed per year.While out of the 100 Gw of power capacity expected 17 G may seem higher ,not e that renewable energy load capacity is around 25-33% of a normal thermal/gas power plant which means that the power generated from the green sources will be only 7% from the newly installed 100 GW capacity much lower than the 10% target by 2015.That would leave around 23 GW to be installed in just 3 years which seems quite impossible.Note India already faces a massive energy deficit and that will only increase as the prices of fossil fuels like coal and oil are increasing at a parabolic rate driven by the growing demands of China and India.With the fossil fuel a depleting source of fuel,renewable energy is the only alternative left.While the government has put in decent efforts,it has been bogged down by a lack of clear thinking.Using the auction mechanism did not help with JNNSM while Wind Power too faces problems of getting proper payments from bankrupt state distribution companies.It needs to structurally reform the whole electricity market in order to meet the growing energy demand of the country.Otherwise the 8% GDP growth rate will look like a pie in the sky.

India to Add 17 GW Renewable Energy in 2012-17

India plans to add 17,000 megawatts, or 17 gigawatts, of renewable-based power generation capacity between 2012-17, requiring an investment of up to 1.5 trillion rupees ($33.8 billion), as the country attempts to bridge its energy deficit and move to cleaner energy sources, the renewable energy secretary P. Uma Shankar said Thursday.

“India’s electricity demand is expected to increase from 900 billion kilowatt hours to 1,400 billion kwh by March 2017. To meet this demand we will need a capacity addition of 100,000 megawatts during the next five-year plan” Mr.Shankar said at a conference.More than half of India’s current power generation capacity of 173.6 gigawatts is based on coal and this is expected to continue for future capacity additions.

India’s power sector overall will need an investment of $300 billion to $400 billion during the next five-year economic plan that starts April 2012 and ends March 2017 to meet its generation targets, power secretary Mr. Shankar said.