Monday, November 16, 2009

India to Boost Funding for Solar Power

Sinhagad near Pune, India (Photo: RLW)

India's problems with energy are self inflicted, in the sense that extreme population pressures are the root cause of nearly all its problems.  India will take over China as the world's most populous country by 2025 by some estimates.  India accounts for 50% of its electricity from coal.  Over 400,000,000 million Indians are not on the national electrical grid.  It depends on glaciers and snow packs for water for its northern multitudes and these sources are diminishing.  Water tables in some regions of India are dropping 12 feet per year.  The one variable in all this that is not addressed in a manner that produces concrete results is population control.  Richard Wottrich, Blog Editor

The Wall Street Journal, By AMOL SHARMA

NEW DELHI—India plans to announce increased subsidies for solar-power generation, a senior government official said, as the country looks to scale up production of renewable energy and show it is committed to mitigating climate change.

India's Ministry of New and Renewable Energy is expected to release details of the latest solar-power policy in the next several weeks. In an interview, Dr. B. Bhargava, a director in the agency, said the plans will increase significantly the number of solar projects that can receive government support.

The hope, Mr. Bhargava said, is that the new policy will encourage manufacturers of solar panels such as Moser Baer India Ltd. and Tata BP Solar India Ltd. to ramp up production, thereby reducing per-unit costs and driving down the high price of solar power.

It is currently about five times more expensive to generate solar power than oil-based power. "If the costs aren't reduced, this [subsidy] policy can't be sustained on a long-term basis," Mr. Bhargava said.

India's revision of its solar policies comes ahead of a global climate-change conference at Copenhagen in December. The differences between developed and developing countries are part of the reason world leaders have lowered expectations for what's possible in Copenhagen, saying the purpose will be to set a political roadmap for further negotiations to replace the Kyoto Protocol, which expires in 2012.

Developing countries such as India are under pressure to show greater commitments to controlling greenhouse-gas emissions. Climate change will be among the issues on the agenda when Indian Prime Minister Manmohan Singh visits the White House next week.

India currently generates a tiny fraction of its power from solar energy. Coal accounts for more than half of the country's power capacity, and wind makes the biggest contribution among renewable sources, which together provide about 7.5% of India's energy.

Solar power is promising, because sunlight is abundant everywhere, unlike wind and hydro power, which are better for only some regions. The government's new policy is aimed at increasing solar-power generation to 20,000 megawatts by 2020 from three megawatts. "The potential is infinite with solar," Mr. Bhargava said.

India's existing policy supports a modest amount of solar-power capacity—50 megawatts—with subsidies of up to 25 cents per kilowatt hour. Mr. Bhargava said that program is already "fully subscribed" and will be expanded substantially through the new policy, though he declined to offer specifics. He said the new guidelines also will streamline the process for solar-power developers to collect subsidies and payments from state utilities.

The major challenge for scaling up solar power has been providing the start-up capital to create demand. Many state electricity boards—which purchase power from generating companies and sell it to consumers—are in shaky financial positions. But Mr. Bhargava said the central government will take on most of the costs of the solar program in the early going. "Initially, we'll have no choice but to do that for a few years," he said.

Beyond expanding solar power, India has pledged in a "national action plan" on climate change to pursue a range of other measures, from increased fuel-efficiency in automobiles to more-efficient consumer appliances.

The U.S. and other developed countries have sought to persuade India to accept mandatory curbs on greenhouse-gas emissions. "Developing countries can't say 'this isn't my problem' ... because most of the increase in carbon emissions in the future will be from developing countries," said U.S. Secretary of Energy Steven Chu, who was in India last week to meet with government officials.

But India has resisted, arguing that its per-capita emissions are still well below those of developed countries. Indian officials and corporate executives say they don't want to put the brakes on economic growth and make it harder to provide electricity to 400 millions Indians who aren't on the national grid.

Mr. Chu said India and the U.S. are exploring ways to combine efforts on basic research into new green technologies. He said India could be severely affected by receding glaciers and changing weather patterns if climate change isn't addressed urgently in coming years.

He added that India will have no choice but to look beyond coal to alternative-energy sources as its population swells. India already faces a shortfall of power—with capacity about 12% below demand during peak hours—and demand is expected to increase five-fold by 2030, according to a recent McKinsey & Co. report.

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