ICRA report highlights problems facing green energy sector

The efforts of the government to provide sustainable energy solutions to the masses could prove futile if unless there is more development of indigenous renewable energy systems in the country, especially at a time when India is predicted to face a commercial energy and power shortage in the near future.

The report on the Indian renewable power sector by ICRA, quoted IEPR's observation and said, “India will find it increasingly harder to import its required quantities of commercial energy even as her share of incremental world supply of fossil fuels could rise from 13 percent in the most energy efficient scenario to 21 percent in the coal dominant scenario by 2031-32”.

According to the report, there is a dire need for development of more renewable energy systems in the backdrop of corrosion of our natural resources but there are some constraints as well.

For example in the field of solar power, the chief constraint posed as highlighted by the report was the global shortage of silicon supply, a key ingredient required for making photovoltaic cells, as well as the high initial cost and cost of generation.

The increased adoption of solar power in European nations lead to the global shortage and since Indian domestic solar wafer production was low, most solar wafers had to be mainly imported.

Several Indian solar energy companies were forced to curtail production and shelve expansion plans due to paucity of solar grade silicon wafers thus.

In the case of wind power sector, the incentives for its development were perceived as highly attractive but despite such supporting systems, economic returns were poor since the plant load factor (PLF) of most existing wind power plants was typically about 18-20 per cent.

The incentives could only contribute a small amount of actual generation, the report said.

In the biomass sector, the chief constraint identified was the availability of continuous sources of materials for fuel, lack of plantation based generation units, low efficiency, problems of disposal of waste and use of poor technology, leading to low output.

To overcome the fuel availability issue, the Planning Commission suggested the development of fuel wood plantations within one kilometre of all habitations.

Another problem was obtaining long term finance, because of the higher repayment risk.

The government's efforts in the form of subsidies and incentives had managed to set the ball rolling for greater interests and investments in the renewable power system but more is needed.

India's initiatives against climate change were voluntary in nature and driven by improvement in cost economics through use of energy efficient systems.

Several Indian companies had started investing in clean fuel and energy efficient systems with the hope of greater profitability and additional revenue in the form of carbon trading with European counterparts.