Over the years, there has been increased awareness of the benefits of renewable energy, due to the sustained public awareness generation campaigns of the government, using different media and through the various devices and systems displayed and demonstrated at exhibitions and fairs across the country. However, the actual exploitation levels of renewable energy remain rather low. Renewables presently contribute about 7,100 MW, which represents about 5.70% of the total installed power generating capacity from all sources. Presently, hydro power and wind power are the more commercially viable and exploited forms of renewable energy in India. 

India’s Solar Photovoltaic Programme (http://mnes.nic.in/solarphoto.html) is among the world's largest programmes in solar energy, aimed at developing cost effective PV technology and its applications for large scale diffusion in different sectors, especially in rural and remote areas.  An important highlight in the solar thermal power programme has been the approval for a 140 MW Integrated Solar Combined Cycle Power Project at Mathania in Rajasthan with financial assistance from the World Bank/GEF and KfW of Germany.

Besides photovoltaic energy, there is a large untapped solar thermal energy potential, estimated to be  140 million sq m  in terms of collector surface area, of which only 680,000 sq. m have been installed so far. Solar water heating systems are becoming increasingly popular in hotels, hostels, hospitals, and other large institutions. State governments have been advised to make necessary provisions in the building bye-laws to make it mandatory for certain buildings to incorporate solar water heating systems.  Also, solar air heaters and solar cookers are gradually becoming popular among industries.

Hydro-power
India ranks fifth in the world for hydropower potential with an estimated 150,000 MW, yet only 17% of this potential has been harnessed so far. Despite hydro-electric projects being recognised as a clean, renewable and economically preferred source of electricity, the share of hydro power in the country has been steadily declining from over 50% in 1963 to 25% in 2001. Much of the hydro-electric potential that remains to be tapped is located in the ecologically fragile Himalayan region and in more difficult locations.

Small hydro projects (SHP), mainly private, have the potential to provide energy in remote and hilly areas where extension of grid systems is either not possible or uneconomical. The potential for power from small hydro power projects of up to 25 MW capacity is estimated at about 15,000 MW. 537 projects with an aggregate installed capacity of 1,748 MW have been set up so far. Another 227 projects with total capacity of over 500 MW are under implementation. A database of 4,404 potential sites with an aggregate capacity of 10,477 MW has been prepared. The government aims to achieve at least 2% of the total power generation capacity through SHPs, mainly through private sector investment. Efforts are also being made to renovate and modernize old SHP projects and complete languishing projects.

Hydro power is attracting private sector interest including from foreign companies. Arunachal Pradesh is considered to be the most interesting state in India for hydro power, with 50% of the untapped reserve potential.

Wind Power
India has a well established wind power sector and ranks fourth in the world (after Germany, USA and Spain) with a wind power installed capacity of 4434 MW. However, the estimated potential is almost ten times more, around 45,000 MW. Given the nature of the resource, wind power tends to be concentrated in a few zones and locations with adequate wind speeds. About 57% of the installed capacity is in a single state of Tamil Nadu. Muppandal in Tamil Nadu has the largest concentration of wind farms in the country. Satara in Maharashtra and Jogimatti in Karnataka have attracted a number of investors to set up wind farm projects. India is implementing world’s largest wind resource assessment programme comprising wind monitoring, wind mapping and complex terrain projects. The programme envisages a total of 800 monitoring stations in 24 states.

Private sector investments dominate this sector, both in manufacturing wind energy equipment as well as generation of power.  India has state of the art manufacturing facilities for wind turbines (225 KW to 2000 KW) and other components, which are also being exported to Europe and USA. Indian companies such as Suzlon have also embarked on global expansion plans, acquiring European turbine manufacturers. Also, carbon credit trading has buoyed investments and has resulted in foreign equity investments in Indian companies generating ‘clean power’.  Wind power is expected to have good prospects in India in the medium term.

Other non conventional energy streams in India are:

Biomass energy and Cogeneration
The current availability of biomass in India is estimated at about 540 million MT/annum covering agricultural and forestry residues, a large portion of which is either wasted or used inefficiently. The potential for power production from cogeneration is assessed at 21,000 MW including 5,000 MW from bagasse-based cogeneration in sugar mills and 16,000 MW grid quality power from other biomass resources. Plantations on wastelands also provide significant opportunity - about 62,000 MW for grid-interactive power and another 15,000 MW for off-grid applications.

A number of technologies have been developed indigenously for gasification and briquetting of biomass materials. Leading institutions across the country are being supported for conducting research and development projects to further improve these technologies. A total of 1806 biomass gasifier systems aggregating 53.16 MW (equivalent) have been commissioned  so far.

Energy from Waste
An estimated 40 million tonnes of solid waste and 5,000 million cubic metres of liquid waste are being generated annually in the urban areas of India. The potential for generating power from urban and municipal wastes (including industrial wastes) is estimated at about 15,000 MW. The present installed capacity of waste to energy projects stands at about 35 MW. A project for generating 4 MW power from starch industry solid waste is under installation at Samalkot in Andhra Pradesh. A demonstration project for generation of 5 MW (net) power and 75 tonnes of bio-fertiliser per day from about 500 tonnes of municipal garbage of Lucknow city is at final stage of installation.  The main challenge in this segment  is the lack of a viable public finance model, given the unwillingness to pay for municipal waste collection and disposal.

Biogas Plants
Biogas plants enable efficient use of locally available energy sources in rural areas, by recovering the energy from cattle dung, human waste and non-woody organic wastes without losing their manurial value through biogas plants. Against an estimated potential of 12 million biogas plants, about 3.77 million family type plants have been set up so far. In addition, about 4000 night soil-based and institutional biogas plants have been set up.

Government Programmes
The Indian Ministry of Non-Conventional Energy Sources (MNES) provides financial incentives, such as interest and capital subsidy for renewable energy based projects. In addition, soft loans are provided through the Indian Renewable Energy Development Agency (IREDA), and also through some of the nationalised banks and other financial institutions. The Government also provides various types of fiscal incentives for renewable energy sector. These include 100% depreciation in the first year of the project, exemption/reduction in excise duty, exemption from central sales tax, and customs duty concessions on the import of material, components and equipment used in renewable energy projects. MNES has issued a set of guidelines to all the States suggesting that they should set general policies for purchase, wheeling and banking of electrical energy generated from renewables. Twelve states have so far announced such policies in respect of various renewable energy sources. Some states (Andhra Pradesh, Madhya Pradesh, Karnataka and Maharashtra) have announced preferential tariffs for wind power.

The Ministry has taken steps to strengthen its administrative structure to promote effective implementation of its programmes. It has nine regional offices, three specialised technical institutions and one financing agency under it, which function to promote the policy and programme initiatives. The Ministry has also prepared a draft Renewable Energy Policy Statement to give thrust to these programmes. The Electricity Bill also contains several provisions to promote accelerated development of power generation from non-conventional sources.

Carbon Credits
Under the Kyoto Protocol to reduce greenhouse gas emissions, global companies that have exceeded their emission levels can either cut down emissions or buy carbon credits from developing countries. Companies in developing countries like India have to make some technology changes that will result in a lowering of carbon emissions. Once this reduction is certified by accredited organisations (like Ernst & Young and EcoSecurities), the value of this credit is tradable at a premium. India is among the leading developing nations in taking advantage of carbon credits. According to Ministry of Environment and Forests, India stands to earn over 2.27 billion US dollars by selling certified emissions reduction units (CER) from approximately 300 Clean Development Mechanism (CDM) projects.

Opportunities
Investment:
There is a large foreign investment potential in renewable energy power based on Wind, Solar Photovoltaic, Hydro and Urban & Industrial waste. Carbon credits will make these investments even more attractive.