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Sunita Narain: Clean energy, dirty business

CSE study shows that wind energy business often subverts the purpose for profit, and wind farms do not generate energy

Sunita Narain  |  New Delhi 

It was a trade exhibition abuzz with the restrained chatter of busy suited executives at company stalls making contacts and finalising deals. Nothing out of place — except that this trade was in renewable energy technologies, which have unconventional reasons for growth.

First, these technologies are seen as the most economical and feasible source of energy for millions of people unconnected to the electricity grid, with no electricity to light their houses or cook their food. This energy poverty is disabling and needs to be eradicated. The introduction of decentralised and improved technologies paves the way for the poorest of households to have the most modern systems. And second, these technologies – from wind and solar to biomass – provide cleaner, low-carbon energy options to combat climate change. These are future systems critical for survival.

Strangely enough, the gathering knew none of these objectives. For them it was just a business, made lucrative by public investment. It was only business as usual.

But this is a fundamental disconnect. The fact is that the business of renewable technologies is based on a different rationale as well as clearly different and explicit social objectives. Also, because of these objectives, this business is being supported through public financing and subsidy. Therefore, the business is not about the usual; it is about the unusual.

Such a disconnect becomes fatal. This unusual business requires different models of growth, which can promote entrepreneurship, innovation and profit, but for common and environmental good. If this does not happen, public goodwill – and the consequent subsidies – for this business will be lost. The future will be squandered away.

We know that the fastest penetration of new energy sources is most likely to happen in regions that are still growing in terms of the provisioning of basic essentials. The infrastructure is being built now; it is most necessary not to “lock out” renewable and clean energy.

We also know that the same countries that are ahead in building new energy infrastructure also have the largest number of poor people with no access to energy. The Paris-based International Energy Agency’s global data book tells us that there is huge energy poverty in the world — and that renewable energy sources are still priced higher than conventional energy systems.

Here lies the nub of the problem. The poorest need access to what are currently the most expensive systems. This is possible only with massive public-financed programmes that drive down the cost.

The fact is that 10 to 12 per cent of the primary energy supply today comes from renewable sources (not counting hydroelectric energy). But new renewables – technologies of the future – still make up only one or two per cent of this supply. The rest comes from biomass systems of the poor, like the stove that burns wood or cow dung. These are the clients who can now either take the next step on the energy ladder to kerosene or liquefied petroleum gas or jump to the top of the ladder by moving to modern biomass energy sources. These are the same clients who are in the dark, but today they have the option of selecting decentralised mini-grids for their energy needs. But if these are the people who are the targets of the new ventures, then business is completely out of touch with its customers.

The same businesses, with the same wheeling and dealing to make a fast buck, are taking over the future. A few years ago, when the Centre for Science and Environment (CSE) studied the wind energy scenario in India, it found that business had subverted the purpose for profit. Wind farms set up across the country were not generating energy. The plant load factor was only 10 or 11 per cent in many states, against the norm of 20 per cent. It also found that the business of wind had the worst characteristics of the market: it was closed, monopolistic and unregulated. The turbine manufacturer was also the energy supplier. The capital incentives given to this crucial sector were used to create investment, not power.

The solar scam – where CSE has reported that a single company, Lanco, a coal power major, used every dirty tactic in the corporate larder to subvert government guidelines and take over the public subsidy package – is another instance of this business going the wrong way. This is not the business of clean energy; this is the dirty business of dirty energy.

Another problem is that nobody wants to talk about this “aberration”. The proponents of clean energy are social and environmental advocates. They do not want to rock the boat. As a result, there is no public scrutiny or research on this new business. The circle of knowledge and influence in this sector is limited to consultants looking for connections to business and industry — which is in the business itself. It is, thus, in everybody’s interest to keep a tight lid on the murky side of the operations. “Don’t ask, don’t tell” is their motto.

It’s time to change. And this time, for the better, not worse.  

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First Published: Mon, February 27 2012. 00:41 IST