New India’s Tech Growth triggers Renewable Energy Industry to Increase by 2X

India is thirsty for energy. Its GDP grows more than 7% per year and its 1.2 billion inhabitants will be 250 million more in 2018 when it will become the most populated country. The lifestyle of the middle class and high demand more and more energy, and the Government has opted to multiply the production from renewable sources to the detriment of coal. In 2015, investment in this type of energy increased by 22% compared to 2014 and reached 10 billion.

India is a country of contrasts: with vigorous growth, there are still 22% of the poor (some 300 million people) who are waiting to have electricity at home. The installed capacity, of 288 gigawatts, needs to grow by 7.3% annually during the next 20 years to serve the population and the industry. For now 72% of its production is carried out in thermal plants that are not very efficient and highly polluting, fueled mainly by local coal.

But in this frantic race for power generation, the Government is betting to change the model of energy production to give greater prominence to renewable energy. As promised by the prime minister, Narendra Modi, before the Paris summit, the goal is to generate 40% of the energy with non-fossil fuels by 2032.

“One of the most important is to take care of our energy security. We are aware that coal will not last forever. Another is climate change and pollution. In addition, the prices of renewable energies are increasingly competitive, so they are a very good option, “explains an official from the Solar Energy Corporation of India (SECI), a government company that designs the implementation of the plans in this sector.

The solar bet is very ambitious: last year its objectives increased fivefold, which will help them to go from 20 gigawatts to 100 in 2022. To make the comparison, the total installed capacity in Spain is around 106 gigawatts. India wants to generate 175 of clean energy by 2022: in addition to the 100 solar energy, another 60 will come from wind, 10 from biomass and five from small hydroelectric projects.

This policy has made it stand out in the last report of the United Nations Program for the Environment on investments in renewable energies. In 2015, for the first time, investments in this field from developing countries (156,000 million dollars, 19% more than in 2014) surpassed those of developed countries (130,000 million dollars, 8% less than in 2014). ). Although India is far from the 102,000 million allocated by China, it increased by 22% compared to 2014, reaching 10 billion.

That a country like India is betting on clean energy is a very good sign, but we must see it perspective: there is still a long way to go. Most of the energy sources installed and to be installed are fossil fuels, says the director of the Financial Initiative of the UNEP, Eric Usher.

He assures that it is a good political intention, but it is necessary to see the implementation, which is certainly more feasible with the increasingly lower prices of solar energy. “It is very important that governments have policies that take into account the benefits for the environment. A good example is China, where the pollution of coal began to appear in its costs and began to close these plants, “he says.

One of the Indian reasons to revise its goals of generating solar energy and quintupling them is that the cost per unit is becoming cheaper at a rapid pace. The ICAS predicts that in one or two years solar energy will become cheaper than polluting sources such as coal.

Although it still depends on whether the coal is imported or not (India purchases 18%, but its local fuel is very competitive), last January a historical minimum cost was reached in a tender by the Government of the State of Rajasthan in which a price of 4.34 rupees per kilowatt-hour was established, that is, 5.78 cents. This is one of the lowest costs in the whole world and experts point to the great innovation that exists in the Asian country. This trend will continue, according to KPMG, until reaching 4.78 cents in kilowatt-hour in 2025.

Producing wind power in India are already Gamesa and Acciona Windpower. In solar, there is Abengoa and other medium and small firms, since there are different tenders by States. According to the information of the Economic and Commercial Office, the most suitable states for solar energy are, in this order, Rajasthan, Gujarat and Madhya Pradesh. For wind power would be Tamil Nadu, Gujarat, Maharashtra, Rajasthan and Karnataka.

“It is logical that India and China are taking advantage of the opportunity they have in betting on renewables: they need to provide an immediate solution to their huge demand for demographic and economic growth,” the counselor explains. The first airport that is fully maintained with this energy is in the south of the country, in Cochin, Kerala. Its 46,000 panels produce enough to be autonomous. They say the facility is saving 300,000 tons of carbon emissions, the equivalent of planting three million trees.

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