India has received Rs 4,900 crore in the last three years as Foreign Direct Investment (FDI) in the renewable energy sector, according to Mr Farooq Abdullah, Union Minister for New and Renewable Energy. The Minister, in a written reply to Parliament, said the highest investment took place in 2009-10 when Rs 2,872 crore were received in FDI. Pointing out that 100 per cent FDI under the automatic route was being permitted in the Renewable Energy Generation and Distribution projects, Mr Abdullah said a leading global market research firm had ranked India as the third-best investment destination in the world after China and the US.

Further, the Minister pointed out that several key initiatives taken in the recent past included the introduction of generation-based incentives scheme for wind power to promote projects and the launch of Jawaharlal Nehru National Solar Mission with 22,000 MW target for solar power by 2022.

Depleting reserves of fossil fuels and political volatility in some oil-producing nations has increased the urgency to look out for alternative sources of energy. It is all the more important for India to do so because the country relies heavily on imports to meet its energy requirements that are rising with every passing day. While India is also keen on increasing the number of nuclear power plants as is evident by the historic deal with the US, the recent nuclear mishap in Japan in the aftermath of a massive earthquake and tsunami has put a dampener on the feasibility of nuclear plants globally in terms of safety in the face of natural calamities.

Though progress has been made in generating power through alternate sources of energy, i.e., Wind Power and Solar Power, the amount of energy generated is miniscule in front of the burgeoning demand for the commodity.

Energy from the Sun can be produced using two technologies - Solar Photovoltaic Technology and Solar Thermal. Solar photovoltaic technology uses solar panels to convert sunlight into electricity while solar thermal or concentrated solar power (CSP) Technology uses heat from the sun to generate electricity. Although both produce electricity from the sun, the former technology has stolen a march over the latter due to its economies of scale and technological advances in terms of storage and localisation. According to the Central Electricity Regulatory Commission (CERC), a solar PV project can command a return of equity of 19% per annum (pre-tax), for the first 10 years and 24% per annum (pre-tax) after the first decade of its existence.

Why Solar Power?

Solar energy is the only form of energy whose costs are continuously declining compared to other forms of energy. Solar energy costs have been steadily declining in the last two to three years even as cost of coal, oil, gas and other energy sources have increased. The cost of copper and steel raw material have a direct influence on the cost of producing wind energy and is considered to be one of the reasons for solar power getting preference over the former.

Here are some of the advantages of solar energy over other non-renewable energy forms:
1) Environment friendly
2) Declining costs
3) No fuel and low maintenance
4) Non polluting
5) Unlimited potential
6) Size advantages - can be installed in various sizes with as little as 200 W and as big as a 1000 MW
7) Quick installation
8) Grid independent - solar energy finds the most use in non-grid areas where it can be installed with batteries for energy storage.

Advantages apart, prohibitive capital costs and associated technology issues are a matter of concern and in a way deterrent to the development of the solar energy sector in the country. Seen in this background, Mr Abdullah's announcement assumes significance, especially the JNNSM.

Jawaharlal Nehru National Solar Mission

The Jawaharlal Nehru National Solar Mission (JNNSM) is one of the eight key National Missions that constitute India's National Action Plan on Climate Change. The mission aims at a quantum leap in solar power installation in the country and envisages investment proposals totalling over Rs 100,000 crore over the next three to 10 years.

The JNNSM has set a target of reaching 20 GW (20,000 MW) of installed solar capacity by the year 2022 from the 81 MW currently. The JNNSM is divided into 3 phases:

• Phase I (up to 2012/2013) - remaining period of 11th five year plan and first year of 12th year plan target of 1100 MW

• Phase II (2013-2017) - remaining 4 years of 12th five year plan target of 3000-10000 MW

• Phase III (2017-2022) - 13th five year plan 20,000 MW overall.

The first phase will focus on capturing low-hanging options in solar thermal; promoting off-grid systems to serve populations without access to commercial energy, and modest capacity additions of grid-based systems. In the second phase, the government says that capacity will be aggressively ramped up to create conditions for up-scaled and competitive solar energy penetration.

The Cabinet has approved setting up of 1,100 MW of grid solar power and 200 MW capacity of off-grid solar applications utilising both solar thermal and photovoltaic technologies in the first phase of the Mission.

According to Mr Faroq Abdullah, the government has envisaged power generation capacity of around 3400 MW grid-interactive and 130 MW off-grid power from various renewable energy sources in the country during the current financial year 2011-12. "The same would require capital investment of the order of around Rs 29,000 crore including Rs 14,500 crore in wind power, Rs 2,500 crore in small hydro power, Rs 3,000 crore in bio-power and, Rs 9,000 crore in solar power," he said.

So, on what is the government's optimism in achieving the set targets based? The following facts might help understand this.

• India has high isolation levels (solar radiation), which makes it possible to produce solar power at a cheaper price. India, given its proximity to the equatorial belt, receives more than 5,000 trillion kWh p.a. of energy equivalent of solar radiation. Rajasthan and Gujarat receive maximum radiation in the range of 6-6.6 KWh per square meter. Andhra Pradesh, Uttar Pradesh, Orissa and West Bengal are the other destinations attracting investments in this sector.

• Lack of adequate power grid availability - Large tracts of the country suffer from low levels of electrification on account of inadequate transmission and distribution. This situation makes it ideal to electrify such areas using solar power

• Demand-Supply gap - Many parts of India, especially semi-urban and rural areas, are plagued by blackouts caused by both scheduled and unscheduled load shedding. Solar power could be an effective way out of this situation. Currently, many institutions such as banks with branches in rural areas, schools, hospitals and post offices are all being encouraged to shift to solar power and reduce their dependency on diesel generator sets.

• Rising cost of producing energy from conventional sources - The rates of electricity prices are going up rapidly each year due to a combination of factors like higher costs of fossil fuels, increasing capital expenditure by utilities and privatisation of power.

Challenges Facing the Indian Solar Industry

High Capital Costs: Compared to conventional power plants and other sources of renewable energy, setting up of a solar PV based power plant entails significantly higher costs), Land & Water Requirement: A solar PV project has expansive land requirements to the tune of 5-6 acre/MW. Solar thermal plants require large quantity of water for cooking purposes, which is major problem in desert areas. Using non-water cooling increases the cost of CSP projects too much.

Competition from International Players: Domestic solar equipment manufacturers are facing stiff competition from international players in exports as well as in domestic markets.

Lack of Consumer Awareness: Consumer awareness plays a pivotal role in the success of solar energy products such as solar lanterns, heaters and water pumps and even decentralised small-scale solar power plants, which could substitute diesel gensets. In India, both the awareness about the usage of these products in households, as well as liberal government support are very limited.

Wind Power

Even as one concentrates on solar power, its cousin, wind power too has been getting attention for all the right reasons. According to the Annual Report for the year 2010-2011 released by the MNRE, there has been improvement in wind power capacity installations during the year and a capacity of 1377 MW has been added during 2010-11 up to January 2011 taking the cumulative installed capacity to 13,184 MW mainly in Tamil Nadu, Gujarat, Maharashtra, Madhya Pradesh, Kerala, Karnataka and Rajasthan. It is expected that, addition in installation capacity will reach 2,000 MW this year. This would be highest achievement ever in a year. Tamil Nadu is reported to have been utilising almost 80% of its wind power potential and leads the way with 40% of India's total wind installations. With the right mix of policies, Tamil Nadu has also become the hub of wind energy manufacturing with global heavyweights like Suzlon, Gamesa, Lietner and Vestas setting up plants in the State. Following Tamil Nadu, Gujarat and Maharashtra the other two industrially powerful States in India have also started to push wind energy in a big way.

Despite their shortcomings, which are aggressively being addressed to by the government, wind energy and solar energy sectors are making significant contribution to the energy needs of the country. For the record, apart from the capacity addition of 40,831 MW achieved from conventional sources of energy, viz., hydro, thermal and nuclear during the 11th Plan till August 29, 2011, a capacity of 12,401 MW has been added till July, 2011 from renewable energy sources such as small hydro, biomass gas/power, wind energy, etc., during the 11th Plan.

Similarly, the new capacity commissioned by the private sector has increased from 1931 MW during the 10th Plan to 14,461 MW during the 11th Plan till August 29, 2011. This information was given by Minister of State for Power, Mr K C Venugopal in a written reply to a question in Rajya Sabha on 5th September 2011.

(Article is a compilation based on reports of the Union Ministry for New and Renewable Energy, market research firms, and reports available on the World Wide Web)

Solar-powered Charkhas

The Khadi and Village Industries Commission (KVIC) in collaboration with Gandhi Gramodyog Urja Vikas Sanstha, Amravati has developed Solar Power operated mechanism which could be used in eight to ten spindle charkhas.

KVIC in collaboration with Mahatma Gandhi Institute for Rural Industrialization (MGIRI), Wardha conducted field trials of solar powered eight spindle charkhas at clusters level at Raibareli, Rajkot, Murshidabad, Karaikudi, Bassi and Dimapur. MGIRI has reported that the earning of spinners chosen for the trial have substantially gone up as a result of use of solar charkhas and a spinner could earn more than ' 100 per day.

(Mahatma Gandhi Institute for Rural Industrialization, Maganwadi, Wardha, Maharashtra. Tel: 07152-253512. Fax: 07152-240328. Email: director.mgiri@gmail.com)