Inside of Renewable Energy Industry of India Is achieving a target of

adding 100 GW capacity of Solar in India by 2022 bankable? : Series I

Renewable energy is one of the purest form of energy with almost negligible
or no carbon emissions. Thus, renewable energy is the need of todays
society which not only has the potential to considerably reduce dependency
on fossil fuel generated electricity (i.e., electricity generated by the
combustion of coal, oil, natural gas etc.,) but also increases energy security
by increasing access of sustainable and environmental friendly source of
energy (i.e., access of affordable form of energy which not only increases
energy independency, accelerate economic growth and create new jobs but
also addresses the problem of pollution by reducing global warming and thus
improving air quality).
Series I discusses - Why renewable energy is vital for Indias growing needs of
sustainable economic growth, Power Scenario of India - Demand and Supply

gap since Independence (1947 2014), Potential of Renewable Energy

Sources in India and Indias Renewable Energy Portfolio as of December
2014.

Series II will showcase following - Techno-commercial cum socioeconomic

comparison

between

different

energy

sources

i.e.,

both

conventional and non-conventional energy sources (Solar, wind, hydro,

biomass, coal and natural gas), Grid parity of Solar Energy and Governments
ambitious target of achieving 100 GW of solar energy by 2022, different
financing options available for solar projects in India and at last we discuss
about Challenges associated with the bankability of target of solar capacity
addition of 100 GW by 2022.

Why renewable energy is vital for Indias growing needs of

sustainable economic growth
Today, Indias natural resource deposits are at huge pressure due to
countrys need of enormous and sustained economic growth. According to
Asian Development Outlook (2015), Indias GDP is expected to grow by 7.8 %
and 8.2 % in 2015 and 2016 respectively (Refer: Table: 1 ). According to CEA
data (2015), about 70% of Indias installed electricity generation capacity
comes from fossil fuel which constitutes 60% from coal, 9% from natural gas
and 1% from diesel. And, thus it is estimated that Indias dependency on
energy imports will increase to 53% of the total countrys energy
consumption by 2030 (Yep, 2011). Therefore, to meet this increasing energy
consumption demand, India imported total 38% of fossil fuel (i.e., together
coal, natural gas, and petroleum products) in 2012 (EIA, 2014) (Refer:
Figure :1). In addition to this, India imported approximately 80% of total
domestic oil consumption as of May, 2014 (http://makeinindia.com/).
Table: 1 Indias Economic indicators (%)

Selected economic indicators (%) - 2015

2016

India
GDP Growth
7.8
Inflation
5.0
Current Account Balance (Share -1.1
of GDP)

8.2
5.5
--1.5

Source: Asian Development Outlook 2015: Financing Asias Future Growth

Figure: 1 Indias increasing dependency on fossil fuel imports

Source: U.S. Energy Information Administration, International Energy Statistics (2014)

Indias substantial and sustained growth has placed enormous demand on

the countrys natural resources. Today, India imports substantial quantities of
gas, oil and coal in order to meet its growing energy demand. The increasing
dependence on imported fuels may create a serious threat to the future fuel
security of the country. In addition, the countrys 254 GW2 of power
generation capacity based mainly on conventional sources has further
strained the natural resources.
Around 60% of Indias current power generation capacity is based on coal
which is expected to remain the dominant power source in the future.

However, the coal sector is facing many challenges and India is increasingly
relying on coal & oil imports to meet its requirements of energy, thereby
exhibiting a lot of pressure on Indian economy from these high import
factors.

Power Scenario of India - Demand and Supply gap since

Independence (1947 2014)
Though Calcutta was the first city in India to get electrified in the nineteenth
century after New York and London i.e., in 1899. But to deal with the huge
power demand and supply gap, the real evolution of Indian power sector
took place post-reform/ liberalization phase i.e., since 1991 when the actual
development took place and several policies & regulatory changes were
made (such as the formation of central sector utilities i.e., NTPC and NHPC,
privatization and unbundling of power sector and thus opening the sector for
private players i.e., Independent Power Producers (IPPS) including 100%
foreign direct investments (FDIs) for generation, transmission & distribution,
increasing technical efficiency, reducing T&D losses, several policies &
measures were introduced under the provisions of the Electricity Act 2003
like National Tariff Policy, National Electricity Plan, Competitive Bidding
Guidelines, and Ultra Mega Power Projects etc.,) thus which transformed the
shape and the performance of the power industry.
Today, India has the 5th largest power generation portfolio in the world and
third largest in Asia. The generating capacity has increased significantly
from 1,362 MW in 1947 (Bhattacharjee, 2005) to 254 GW of power as of
December 2014 (Investors Guide Re-invent, 2015). But despite this
significant growth of power sector since 1991, India still faces acute power
shortage as the demand outgrows power supply.

Table: 2 All India Power Supply Position Energy-wise and Peak-wise

(Utilities)

(1984-85

to

2012

13)

Source: CEA (2013), Growth of Electricity sector in India from 1947 to 2013

Figure: 2 - Power Supply Position in India (as of March 2014)

Source: CEA (2014), Power Scenario at a Glance, March 2014

From the above Table: 2 and Figure: 2, it is clear that Historically, India has
experienced shortages in energy and peak power requirements. The
maximum energy deficit of 11.51% was recorded in 1996 97 and the
average energy deficit was 8.38 percent and the average peak power deficit
was 13.74 percent between 1984 85 and 2012 - 13. However, the gap

between demand and

supply

reduced
in
FY14,

of

power

has

significantly
due to

enormous addition of thermal (i.e., coal, gas, and diesel), hydro and
renewable energy (i.e., solar, wind, biomass and small hydro) power plants.
And below Table: 3 gives region-wise summary of electrical energy
requirement (EER) and annual peak electric load (APEL) by the end of 12 th &
13th plan as per electric power supply (EPS).
Table: 3 - Region-wise Summary of EER & APEL by End of 12th & 13th Plan

Region/ Year
Northern
Western
Southern
Eastern
North-East
A&N Island
Lakshadweep
All India Total

EER (MU)
2016 - 17
2021 - 22
422,498
594,000
394,188
539,310
357,826
510,786
163,790
236,952
16,154
23,244
366
505
52
65
1,354,874
1,904,862

APEL (MW)
2016 - 17
2021 - 22
60,934
86,461
62,015
86,054
57,221
82,199
24,303
35,928
2,966
4,056
67
89
11
18
207,517
294,805

Note: EER Electrical Energy Requirement, APEL Annual Peak Electric Load and EPS Electric Power
Supply
Source: CEA (2013), Growth of Electricity sector in India from 1947 to 2013

Below Table: 4 gives the sneak peak about the progress report of village
electrification, according to which approximately 20,000 villages are still unelectrified as on 28-02-2015 as per 2011 census (CEA, 2013) means nearly

400 million people in India still lacks the access of reliable supply of power
(Times of India, 2014)
Table: 4 - Progress report of village electrification as on 28-002-2015 as
per 2011 census

Total
inhabited
villages as
per 2011
Census
597464

Villages
electrified as on
31-03-2014
(Provisional)
(Nos.)
576554

96.5

Cumulative
achievement
as on 28-022015

%age of
villages
electrified
as on 28-022015

Un electrified
villages as
on 28-022015

577629

96.7

19,835

Source: http://www.cea.nic.in/reports/monthly/dpd_div_rep/village_electrification.pdf

Potential of Renewable Energy Sources in India

India is blessed with vast potential of different renewable energy sources like
wind, hydro, solar, biomass etc. As per Ministry of New & Renewable Energy
(MNRE) (2015), India has an estimated renewable energy potential of about
895 GW from commercially exploitable renewable energy sources. Below is
the Table: 6 showing potential (in MW) of different renewable energy sources
in India and Table: 6 showing calculation of solar energy potential in India.
Table: 5 - Renewable Energy Potential (MW) in India
Technology
Wind
Small Hydro (up to 25 MW)
Biomass including bagasse cogeneration (including
waste to energy)
Solar
Source: Ministry of New & Renewable Energy (MNRE)

Potential (MW)
102,800 (80m hub height)
19,700
22,500
50MWp/km2

Table: 6 - Calculation of Solar Energy Potential in India

Total Land Area (sq km)
No of sunny days
Unit potential from 1 sq.m
Conversion efficiency
1 sq. km (Mn units per year)
0.5% of land used (in sq km)

3,287,590
200
4kwh/day
15%
120
16,438

Potential units (in billions)

Source: http://tejas.iimb.ac.in/articles/75.php

1,972

From the above Tables: 5 and 6, it is clear that as geographically India is

situated near the Equator therefore India has the maximum potential of 50
MWp/Km2 of solar energy which is equivalent of 750 GW assuming that only
3% of waste land is available in India. Thus, India receives immense amount
of sunshine for approximately 3000 hours per year which can generate
nearly about 1,900 billion units of solar energy (Refer Table: 6). And this is
equal to 5000 trillion kWh of energy which can serve the nations energy
demand till 2030.

Indias Renewable Energy Portfolio as of December 2014

In India, out of total power generating capacity of 254 GW, 33.79 GW of
power comes from the total installed capacity of renewable energy in India
(as of December 2014). And, in fact India is the 5 th largest wind energy
producer in the world with installed capacity of 22,465.03 MW which
constitutes about 66% of the total Indias renewable energy basket as of
December 2014. In addition to this, the installed capacity of other renewable
energy sources like solar, biomass, hydro etc., are also increasing rapidly.
Below is the figure: 3 showing total installed renewable energy capacity in
India (as of December 2014).
Figure: 3 - Installed Renewable Energy capacity in India (as of December
2014)

Total Installed Renewable energy capacity in India (as of december 2014)

Biomass; 4273.13; 13%
Solar; 3062.82; 9%

Small Hydro; 3990.83; 12%

Wind; 22465.03; 66%

Energy Source
Installed
Capacity (MW)

Wind
22,465.
03

Small
Hydro

Biomass

3990.83

4273.13

Solar
3062.
82

Total
33,791.
81

Source: Ministry of New & Renewable Energy (MNRE)

Now, please read the upcoming second part of the article Inside of
Renewable Energy Industry of India Is achieving a target of adding
100 GW capacity of Solar in India by 2022 bankable? Series II for
our insight on following - Techno-commercial cum socio-economic
comparison between different energy sources i.e., both conventional and
non-conventional energy sources (Solar, wind, hydro, biomass, coal and
natural gas), Grid parity of Solar Energy and Governments ambitious target
of achieving 100 GW of solar energy by 2022, different financing options
available for solar projects in India and at last we will discuss about
Challenges associated with the bankability of target of solar capacity
addition of 100 GW by 2022.

Image Credit: China & solar panel via shutterstock

Bibliography:
1. Asian Development Outlook 2015: Financing Asias Future Growth http://www.adb.org/countries/india/economy
2. CEA (2013), Growth of Electricity sector in India from 1947 to 2013

3. CEA (2014), Power Scenario at a Glance, March 2014

4. CEA Monthly all India Installed Generation Capacity (January, 2015)
http://www.cea.nic.in/reports/monthly/inst_capacity/jan15.pdf
5. http://www.cea.nic.in/reports/monthly/dpd_div_rep/village_electrification.pdf
6. http://www.re-invest.in/Document/orginal/15.REInvest_2015_Investors_Guide.pdf
7. http://cea.nic.in
8. http://www.globalelectricity.org/Projects/RuralElectrification/Presentatio
ns/6.2%20%28EDF%29%20-%20Somnath%20Bhattacharjee.pdf
9. http://makeinindia.com/
10.http://mnre.nic.in
11.
http://tejas.iimb.ac.in/articles/75.php

12.
U.S. Energy Information Administration, International Energy
Statistics (2014)
13.
Indias
widening
Energy
Deficit
http://blogs.wsj.com/indiarealtime/2011/03/09/indias-widening-energydeficit/
14.
India is increasingly dependent on imported fossil fuels as
demand
continues
to
rise
http://www.eia.gov/todayinenergy/detail.cfm?id=17551#

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