Thursday, June 30, 2011

Renewable Energy in India - Still a long way to go

When I read the news that under Gujarat solar power policy 2009, Gujarat government is planning to set up a solar park capable of 500 Mw within two years, I really felt excited that at least one state government is thinking with a vision (click to open the link). I have always wondered why can't states like Rajasthan and Gujarat (and to some extent also Haryana & Punjab) invest heavily in wind and solar energy.

Though initially costly, they definitely can contribute greatly to reduce the high power deficit the country faces. More so for state like Rajasthan, which lack any other significant natural resources except for wind, solar energy and ofcourse 30k barrels/day of sour crude, this is a huge business opportunity. Alas, only if the state government finds time to think beyond Jat, Gujjar and Rajput reservations and agitations!

A quick look at the proposed solar park project in Gujarat shows that it is going to cost around Rs 15 cr of capex to produce a Mw of electricity. A gross estimate tells us each Mw of installed nuclear power capacity costs Rs 20 cr and traditional coal fired power capacity costs Rs 4-5 cr. This means that solar power is roughly 4 times as expensive as traditional coal fired power but 25% less costly than the nuclear power, strongly advocated by current government. As I mentioned in my previous post, I have no qualms about setting up nuclear power plants but we need to utilize all the available options optimally, which include wind, solar and also thorium based hybrid nuclear reactors, to meet our ever increasing energy demand.

Though central government has displayed some lofty ambitions in renewables through policy statements such as Jawaharlal Nehru National Solar Mission, five year plans etc, the actual exploitation of potential remains a mirage. The plans to generate 1,000 MW of power by 2013 and up to 20,000 MW grid-based solar power, 2,000 MW of off-grid solar power and cover 20 million sq metres with collectors by the end of the final phase of the JNS mission in 2020 remains poorly executed. The performance in wind sector is not as abysmal and India has the fifth largest installed wind power capacity in the world but no where close to the actual potential the states like Rajasthan, Gujarat, TN and Karnataka offer.

I again stress here that if we have to match our continuously increasing energy needs, it's high time we abolish our fragmented approach to energy sector. I feel we need to abolish separate petroleum ministry, renewable ministry, coal ministry, power ministry, atomic ministry and what not and set up a responsible Energy ministry capable of taking a holistic view. If all the above mentioned ministries are essential to satisfy the "coalition dharma", how about setting up an umbrella ministry over and above these ministries that can work on all available sources under one roof. We need to develop a master-plan that provides a guideline on how we want to configure our energy basket over the next few decades with a proper mix of all easily available options.