Harnessing Hydropower
India, a peninsula crowned by the 1,500-mile Himalayan mountain range, is traversed by several surging rivers. The Himalayan rivers, such as those in the Indus and the Ganga-Brahmaputra-Meghna system, are perennially snow-fed, while the Deccan rivers in the south depend on the monsoons for their torrent. According to the Ministry of Power, if all economically exploitable and viable hydro potential were harnessed at a load factor of 60%, it could produce 84 GW.
For that reason, in the 11th plan the government has called for 15.6 GW of new hydropower capacity — almost half the current installed capacity of 37 GW. The CEA reports that 11.9 GW is already under construction. About 57% of this total will be run-of-the-river projects, 32% will be storage projects, and about 11% will be pumped storage. The plan includes projects like the 2,000-MW Subansiri Lower Plant near North Lakhimpur on the border of Assam and Aruncachal Pradesh. It will join a list of several spectacular hydro projects the government has already built, including the Tehri Power Station in Uttarakhand (Figure 11).
11. Gating a goddess. After 35 years and an investment of nearly $1 billion, the 2,400-MW Tehri Hydroelectric Power Station in Uttarakhand, northern India, started operations in 2006. This hydropower project is one of India’s largest and most controversial. Located on the Bhagirathi River, a principal tributary of the grand Ganges River, it draws frequent protest from Hindus who resent the reduced flow of the sacred river as a result of the 855-foot dam (the fifth tallest in the world). Courtesy: Ministry of Power
By 2025, the government hopes to have added 500 GW of new hydropower capacity, more than half in Arunachal Pradesh state. The accelerated plan must regard established environmental standards, the Planning Commission has said. To help reduce the number of Indians displaced as a result of mega hydropower projects (nonprofit group Rivers International puts that total at 20 million to 50 million people), the government has planned to build more run-of-river projects rather than large storage dams. This decision is despite its finding that "the available energy [of run-of-river projects] varies from month to month and peaking capacity is minimal."
Running Renewables
India’s Ministry of New and Renewable Energy — perhaps the world’s only ministry dedicated solely to the development of renewable energy — evolved from a government agency created in 1982 to steer the nation away from its reliance on oil, following two oil shocks in the 1970s. The ministry pursues a similar mission today, pushing renewables to supplement the country’s coal-heavy portfolio. And it has been largely successful. In 2006 — before the ministry had been formally named — nonconventional sources of energy like small hydro, wind, solar, and biogas constituted less than 1% of the country’s portfolio. Today, 9% (14,224 MW) of India’s power is produced by these sources, and the 11th plan projects that this capacity will more than double (Figure 12).
12. Doubling clean capacity. India currently has 13,880 MW of grid-connected wind, small hydro, biomass, cogeneration, waste-to-energy, and solar power plus 350 MW of off-grid power, including captive power plants. The 11th plan seeks to add 15,000 MW of new renewable power, including 10.5 GW from wind. Source: Ministry of New and Renewable Power
Wind power, particularly, has seen stellar growth. During the 10th plan, India saw the installation of 5.4 GW, against a target of 2 GW. With 9.8 GW, India now has the fifth-highest level of installed wind capacity, trailing the U.S., Germany, Spain, and China. Tamil Nadu boasts the most wind power (about 4 GW), followed by Maharashtra, Karnataka (Figure 13), Rajasthan, and Gujarat. But though these states are also expected to receive most of the 10.5 GW of new capacity called for by the 11th plan, experts say that India’s wind power potential of 45 GW in 13 states — and up to 100 GW with current technology — will remain relatively untapped.
13. Monsoon power. India’s wind-powered capacity has quickly grown to 9.8 GW, and it is set to double by 2012 per the 11th plan. Currently, 12 wind turbine manufacturers are vying for market share in this sector, including Suzlon, a home-grown—and now global—wind power equipment maker. Suzlon, which owns this 1.25-MW turbine in Gadag, Karnatak, is in the process of developing a 1,000-MW “windpark” near its headquarters in Dhule, Maharastra. Courtesy: Suzlon
The growth may have been fueled by federal tax incentives and tariff structures fashioned by state governments, but it has benefited exponentially from home-grown wind turbine manufacturers, including Suzlon. Having consistently maintained more than 50% of India’s wind power market, that company is now ranked the fifth leading wind equipment manufacturer worldwide. According to Shrenik Ghodawat, managing director of Ghodawat Industries, a relatively new company that began manufacturing wind turbines suited to the Indian market this January, foreign companies like Enrecon, Vestas, Gamesa, and GE have also quickly gotten into the game.
Ghodawat said that the largest constraint on the government’s renewable energy expansion plans is the weak grid (see sidebar "A Passage for India’s Power"). "But now the government and all wind sector players are jointly making corrective measures," he said. "Wind sector players are participating in the network strengthening and planning of [a] central transmission utility and state transmission utilities." The country is also actively training a workforce to support the projected growth, narrowing the gap considerably over the past few years, he said.
India’s renewable energy sector is also seeing increased interest in solar power. Though India is located in the equatorial sunbelt and experiences 250 to 300 days a year of sunny weather, installed grid-connected and off-grid capacity has so far sprouted only a paltry 5 MW, its growth stunted mainly by cost concerns. The Ministry of Power is looking to expand solar capacity tenfold by 2012.
According to the U.S. Commercial Service, which recently organized a 14-company solar delegation to India, this target is achievable — with foreign investment and international cooperation. The Indian government is encouraging foreign investment, it said, by offering solar developers who build, own, and operate projects financial incentives of about 30 cents for each kWh produced.
The opportunities are abundant: India currently has 19 manufacturers of solar photovoltaic (PV) modules, and several large investments are in the pipeline. "There is a lack of technical expertise in installation, operations, troubleshooting, and other aspects of clean energy implementation," the service said in a statement to POWER. "There is demand for thin-film solar cell technology, technology for megawatt-scale power generation, and improvements in crystalline silicon solar cell/module technology. Building integration for PV and solar thermal systems is also an area of opportunity."
India’s grid-connected biomass, cogeneration, and small hydro generation options are also slated to see significant increases by 2012. Because the government has pledged to connect all rural villages under its rural electrification program by 2012, off-grid projects will also see tremendous growth (see web supplement, "Fabulous Wealth and Fabulous Poverty" at www.powermag.com). "This should translate into a seven-fold market increase for renewable power generation — from $3 billion today to more than $21 billion by 2012," the U.S. Commercial Service said.
Financial Limitations
Through the 10th plan, until 2007, about $60 billion had been allocated for India’s power sector, and about $40 billion was actually invested in the sector. Most of the required funds had been raised in domestic financial markets, met through the Power Finance Corp. (PFC), a state-owned agency entrusted with the task of providing financial support to state and central power projects. The government’s more recent estimates indicate that $130 billion will be needed just for generation in the 11th plan — only a fifth of which the PFC is expected to cover — and $225 billion will be required for the entire sector. According to the International Energy Agency, longer-term investments (covering 2005 to 2030) will require $960 billion for the entire electricity sector, of which 45% will be for generation.
Raising these kinds of funds will pose a serious impediment to India’s expansion plans, says Dr. Saifur Rahman, a global energy expert and vice president of the IEEE Power & Energy Society, an organization dedicated to the advancement of technology. Despite ongoing reforms, state governments are in financial straits: In 2005, power utilities, which accounted for 60% of the nation’s generation, had losses of around $4.8 billion; nearly half recorded a negative rate of return on net fixed assets. Rahman points to the government’s populist policies — specifically, its push for free power for farmers — as a major part of the problem.
"Free power means that the supplying electric utility cannot get enough returns to maintain their system and infuse capital to improve the quality of supply. This financial weakness makes the electric utility a high-risk proposition to investors, which results in lack of funding availability and/or higher interest rates to secure funding because of high risk of inability to pay back the loan from commercial concerns," he told POWER.
"If the government wants to help farmers with electricity for irrigation, which is commendable social service, the government needs to set aside funds and buy down the cost of electricity to farmers. This will allow the electric utility to charge less for power to farmers but make up the loss from the government’s buy-down funds. Similar programs are available in the U.S., where governments subsidize the interest rates for capital improvements and energy efficiency measures."
The funding woes are serious, and they could trickle through to other basic requirements for a solid sector expansion, Rahman said. For example, even though India has skilled workers and the facilities to train new ones, to support the sector’s growth, "due to lack financial remuneration for these workers, many of them end up working in the Middle Eastern countries."
Other experts propose that because India does not have a large and liquid domestic debt market — and this market is dominated by government securities — the country will likely have to depend on foreign investment or grants to fund the expansion. India has been somewhat successful in this area, but experts agree that it still has a long way to go. Despite incentives and lucrative policy measures, foreign direct investment (FDI) in the sector for 2006 was $157 million — less than 1% of the nation’s total FDI. The primary obstacle for foreign investors is the poor commercial performance and near-bankruptcy of state electricity boards — a result of pervasive power politics. The prevalence of corruption, lack of corporate governance practices, and red tape (owing to the multi-regulatory system that involves both state and federal governments) are also major concerns. (See the web supplement "The Foreign Investment Factor" at www.powermag.com for more details.)
One thing is certain: As India’s continues on its economic trajectory and its population continues to increase, if its basic power infrastructure is not secured, the nation’s goal of empowering its people will remain unmet. So will its superpower aspirations.
—Sonal Patel is POWER’s senior staff writer.
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Hopw you can also provide some insights on the infrastrucutre development.