When alternatives can be the solution
India returned from Bali having successfully fended off pressure from developed countries to take on targets relating to emissions of greenhouse gases. Undoubtedly, India's per capita energy consumption is extremely low and we do have to provide good quality reliable energy to our people to sustain economic growth, promote a reasonable lifestyle and pull people out of poverty. However, this is easier said than done!
With oil prices at nearly $100 a barrel and gas prices at $7/mmbtu, competitiveness and affordability become key issues. Even if one were to assume that the government has now the financial muscle to continue to subsidise energy in the current irrational manner, we need to look at the magnitude of energy requirements by 2030 - a mere 25 years away.
New electricity generating capacity of nearly 7,00,000 mw would need to be added - at the rate of 1,40,000 mw per Five Year Plan period. Compare this with the capacity addition of 21,000 mw during the 10th Plan that just ended in 2007! To be able to sustain this level of electricity generation, we would need to import nearly one billion tonne of coal from the current level of less than 100 mt, and we would need to add nuclear capacity of 3,000 mw per year (almost equal to our total current nuclear generating capacity) from 2017 onwards, assuming a ten year gestation period. Imagine the import bills, port capacities required, transport infrastructure needed and of course the international cooperation on the nuclear issue! India is well on the path to extreme vulnerability on the energy front.
On the other hand, India is fairly well endowed with renewable energy sources such as solar, wind and biomass. Exciting research is going on in university systems and research labs in the developed world -supported by their governments and industry - to harness such energy sources and bring them to work in a techno-economically efficient manner.
Price projections for solar photovoltaic power generation are in the range of 10-12 cents/kWh while those of solar thermal power generation are about 9 cents/kWh - and this could be by year 2010! Enormous strides are being made on new battery storage technologies, smart metering systems for managing individual home based systems and for grid connectivity that could revolutionise the manner in which energy services are provided in the not-so-far future.
Large scale experiments on bio-fuels, as relevant to various country contexts, are also underway including a major emphasis on ligno-cellulosic ethanol production and harnessing algae for bio-diesel production. Many more innovations, with the potential for large business opportunities, are underway.
India and its thriving industry are, unfortunately, not part of these efforts. It would be grossly unintelligent for us to sit back and say that the catch-up effort is too huge. The challenges facing us on the energy front, compounded hugely by the threat of climate change, would require sustained efforts to bring about continuous innovations over the next several decades!
To start with, India should take stock of where we are in terms of our knowledge and technological capability as regards renewable energy and related technologies, draw up a strategy for taking carefully selected initiatives to the market at the earliest, prioritise future research and development efforts based on our relative advantage and interest, and allocate sufficient resources to ensure a time bound result. In all this, a clear outcome orientation should drive processes.
At the same time, we also need to take cognisance of those technologies that will hit the global market prior to our engagement with the research or development process. Thus, illustratively, if solar photovoltaic-based power generation technology would enable us to generate electricity at 12 cents/unit (
The opportunities arising out of the renewable energy and related industry are not only restricted to India. Last year, most of Indian manufacturing capacity of solar PV cells, although small, was dedicated to meeting the demands from Germany.
Similar was the case with China. China's emergence as a major manufacturing hub for solar and wind technologies was spurred by demand from Europe. To convert the challenge of energy security into an opportunity, India and Indian industry need to act and react in a strategic manner that is almost cold-blooded in its calculation - or lose inexorably to stiff competition all around! Gone are the days of dole-based, evenhanded and casual research and development that yielded results, if one were lucky!