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Published on October 15th, 2010 | by Mridul Chadha

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Energy Efficiency, Clean Energy Get Priority in India’s $2.3 Trillion Energy Investment Plan



Renewable energy and energy efficiency will be focus of India’s $2.3 trillion energy investment plan over the next two decades. The plan is aimed at achieving consistently high economic growth rates without having any net adverse impact in the environment.

While the exact proportion of the investment for renewable energy is not known yet, the countries planners have clean energy sources like solar, wind and hydro power in focus as the foundations of the new green economy. India’s National Solar Mission is already underway. India plans to install 20,000 MW of solar PV and solar thermal power plants across the country by 2022. The proposals for the first 1000 MW projects to be completed by 2013 have already been approved.

Solar Energy

In addition to large-scale solar power plants, the government is also planning to promote small-scale solar power systems for commercial buildings and homes. Several state governments offer attractive subsidies to industries and homeowners to install solar panels and solar water heaters. The government is also planning to introduce the feed-in tariff scheme for homeowners in the near future which would allow them to earn from the solar power generated from their rooftop solar panels.

Wind Energy

Wind energy is the centerpiece of India’s renewable energy infrastructure. Although confined mainly to the coastal states, it makes up 70 percent of the installed clean energy generation capacity. It has been estimated that wind energy could meet almost 24 percent of India’s electricity demand by 2030. The wind energy resource assessment in India has been limited to the onshore sites and that too up to a limited mast height.

India’s Suzlon Energy has become the market leader in Asia and is the third largest wind energy company in the world. It powers 30 percent of the country’s wind energy installations. Suzlon, with a series of acquisitions, has transformed itself into an ened-to-end to service provider in the wind energy sector. It has successfully manufactured wind turbines of high generation capacities and towers with hub heights more than 80 meters which help in tapping more energy from the wind.

However, India is yet to estimate the offshore wind energy resource which could far exceed the onshore resources. So a bulk of the wind energy infrastructure expansion lies in the future for India.

Hydro Power

India is also planning to build several large and small-scale hydro electric power plants. While the large-scale plants are bound to face opposition on grounds of environmental degradation and eviction of human population, the small scale projects could prove to a real boon for the energy-starved country. Thousands of villages with no electricity or grid connections can benefit from these small scale projects which have far less environmental impact than the large scale dams.

Energy Efficiency

India has launched a national plan for improving energy efficiency. The Bureau of Energy Efficiency (BEE) is the nodal agency for planning energy efficiency projects. It also has the responsibility of providing energy consumption data of various home appliances to the consumer through the energy star ratings. It also runs schemes for providing energy efficient water pumps to thousands of Indian farmers. It was also successful in getting UN approval for the world’s largest CDM project which aims at replacing 400 million incandescent lamps with CFLs.

By Q2 2011, BEE plans to launch the Energy Efficiency Certificate trading scheme. The agency has identify over 700 industrial sectors which will be assigned energy efficiency targets which they would have comply with.The industries which fail to achieve their targets can buy the energy efficiency certificates from the industries which have complied.

While the coal power plants fulfill more than half of India’s power demand and the clean energy sources are not expected to significantly replace coal, but the government is also looking to reduce its dependence on coal by converting coal power plants to next generation gas-fired power plants which are much more efficient.

The Indian government has taken several important steps to encourage renewable energy. It has launched the ‘one dollar per tonne’ coal tax which is expected to generate $650 million annually and will form the clean energy fund to enable financing to clean energy projects. It has relaxed the minimum requirements for renewable energy power plants to qualify to feed power to the grid. All Indian states have been assigned a definite percentage pf power that they need to get from renewable energy-based power plants, any state unable to meet this requirement will have to buy the renewable energy certificates from clean energy power producers.

With comparison to this investment plan, India’s current Gross Domestic Product (GDP) is just over $1 trillion and is expected to swell to $4.5 trillion by 2020.

Image: Amaresh S K (Flickr)/ Creative Commons

The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degree.

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About the Author

currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.



  • http://www.solarenergyexplorer.com Chaitanya Patankar

    Two Thumbs up to the Indian Government for the wonderful
    planning & the implementation of generating green power
    on such a large scale.

    This will surely help India become fossil fuel free.

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