The renewable energy sector in India is undergoing rapid transformation and offers incredible opportunities for strong financial returns. Here, in today’s post, we give you a clear picture of the renewable energy sector of India, and the future growth potentials in this space. Further, we also take a look at the huge impacts of renewable energy on business operations in India, and how it enhances ease of doing business in the country.
The Current Energy Scenario in India – Key Takeaways
- India is the world’s third largest producer  and third largest consumer  of electricity.
- India has one National Grid with an overall capacity of 356.100GW as on 31st March 2019 .
- Renewable energy – solar, hydro, biomass, wind – constitute 34.5% of the total energy capacity.
- In March of this year, the Government launched “Power for All,” a central and state government partnership scheme that will work on ensuring uninterrupted power supply to all households, industries and commercial establishments across the country.
- The Indian energy sector is dominated by fossil fuels, especially coal and coal accounted for nearly three-fourths of all power generated in the country for the FY 2017 – 18.
Overview of the Growth of the Renewable Energy Sector in India
A few years after Independence, when the then Prime Minister, Mr.Jawaharlal Nehru, inaugurated the Bhrakra Nangal hydro-electric power project, he described it as the “New Temple of Modern India.” In the 70 years post-independence, apart from hydro-power, India has made massive strides in other two abundant renewable energy sources – wind and solar.
Though India is the world’s fourth-largest contributor of carbon emission, in recent years, the country has made significant strides in the field of renewable energy. Global warming, climate change and the need for sustainable energy sources have further propelled the central and state governments to create blueprints for clean and sustainable power for the country.
Creating a Sustainable Future for the Nation
In 2017, India was ranked as the world’s second most attractive market for renewable energy production. As per the Paris Climate Accord, India has plans to reduce its carbon emissions significantly in the next few years. The country is working towards an ambitious goal for increasing its total renewable energy capacity to 40% by 2030.
To achieve the goal of 175GW of renewable power by 2022, the country has to produce
- 100GW from solar,
- 60GW from wind,
- 10GW from biomass and
- 5GW from small hydropower.
India’s Pathbreaking Milestones in Renewable Energy Production
- India has doubled renewable energy production in the last four years – 35,500 MW in 2013-14 to 70,000 MW in 2017-18.
- India has set an ambitious goal of generating 175GW of renewable power – solar, wind, geothermal and biomass – by 2022.
- India is the world’s 4th largest producer of wind power, 6th largest country in a total number of solar panels installed.
- Solar capacity increased 8x times, from 2630MW to 22000MW in the last four years.
- 41 solar parks spread across 21 states. Largest solar park with a capacity of 2000MW to be set up in Pravagada.
- Off-grid solar applications like solar pumps, solar water heaters, solar stoves, solar lamps, solar lighting systems increased across the country.
- Biogas for cooking introduced across the nation.
- Wind energy increased by 1.6x times, from 21,000MW to 34,000MW in the last four years.
The Democratization of Energy Production
The growth of renewable energy has changed the very nature of energy businesses in the country. In fact, one can even say that renewable energy production has opened energy production and consumption. Before the availability of renewable energy, the energy industry was dominated by fuel-based large corporations that fed power to the grid.
Even though these large corporations still dominate the market, the growth of the alternative energy market has created thousands of smaller firms that are involved in renewable energy production. The changes in these trends as a result of two major acts:
- The Electricity Act of 2003. This act has made available decentralized distributed energy generation systems to the rural electrification market. This allows businesses to now distribute and sell power to rural India that is not under the purview of the major distribution companies.
Additionally, private developers can set up renewable energy production and sell it to consumers. The Electricity Act of 2003 allows 100% FDI under the Automatic Route.
- Rooftop solar policies of State Government – Indian states like Tamil Nadu, Karnataka, Uttarakhand, Andhra Pradesh, Gujarat, and others have policies that promote rooftop solar power generation. The response to these policies has been hugely positive, and rooftop solar projects are being developed at residential, industrial and commercial buildings.
- Transparent bidding process has reduced the cost of setting up solar and wind power plants in the country.
In the next few years, you can expect thousands of small and medium energy producers feeding the grid and supplying electricity to other consumers via local, mini-grids. Additionally, you can also expect thousands and thousands of consumers – both residential and commercial – generating their electricity and feeding the surplus to the common grid for profits.
What does the Growth of Renewable Energy mean to Businesses in the Country?
The focus on the development of renewable energy presents businesses in the country with various opportunities. There are several benefits renewable energy sources present to businesses like – reduction of carbon footprint, lower energy costs, increase in marketing opportunities, better client satisfaction and more.
Here are the top 9 Ways the growth of Renewable Energy presents businesses in the country with favourable market conditions:
- Enjoy lower energy bills
- Better public relations
- Create more jobs and stimulate the economy
- Consistent service to customers without disruption due to lack of power supply
- Higher returns on investment
- Lower carbon footprint and emissions
- Adopt a new marketing approach
- Improve the society and community
- Emerge as an industry leader
Ease of Doing Business in the Renewable Energy Sector
Renewable energy has been revised as “white category,” from the earlier “green category.” This reclassification makes it easy for companies setting up wind and solar power plants to set up shop, without seeking environmental clearances from State Pollution Control Boards and the Central Ministry.
The Wind Atlas, a Geographic Information System (GIS) was launched in 205 to help businesses looking to start renewable energy production. This tool identifies the potentials for local and regional wind energy and annual values of wind power density, wind speed, and capacity utilization factor. All this information is available freely in the public domain.
To meet the rising demands of manpower in renewable energy, the Government has focused on developing skilled manpower in solar energy. The plan will train over 50,000 professionals in solar energy by 2019 – 20. Nearly 98,000 people are working in the four major classifications of renewable energy – small hydropower, wind, solar and biomass.
For any further help on setting up your business in India and for the right guidance regarding national and state policies, get in touch with our team here at Vedas Shaakha.