| With initiatives being undertaken on changing the current energy mix in India to a more varied one using the non-conventional or renewable forms, the energy and environment scenario in the country is likely to witness changes which will help conform to international standards on climatic norms on curbing emissions and sustaining a cleaner environment. One effective step towards this has been the launch of Jawaharlal Nehru National Solar Mission (JNNSM)—a joint initiative of the Ministry of New and Renewable Energy (MNRE) and Ministry of Power and the first of its kind in the world—which emphasises the use of solar energy and is one of the most important environment-friendly energy solutions available today. The National Solar Mission has the pride of place in India's National Action Plan on Climate Change. |
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| Emission of greenhouse gases leading to climate changes has become a major concern globally. Under the Kyoto Protocol's terms, industrial country parties will be under obligation to limit their greenhouse gas emissions by 2008-12. India has also signed the treaty and under the protocol, India now focusses to drive a clean development mechanism (CDM) aimed at protecting the environment by reducing carbon emissions. |
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| Total renewable power achieved was 2410.76 mega watt (MW) during 2009-10 (till end March). Grid-interactive renewable power through sources such as wind power, solar power etc worth 2330.42 MW were achieved during 2009-10 (till end March). Power from off-grid/distributed renewable power (including captive/CHP plants) achieved during 2009-10 (till end March) was 80.34 MWeq, according to data released by the Ministry of New and Renewable Energy. |
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| As per provisional data for the period April 2009 to March 2010 provided by the Ministry of Petroleum and Natural Gas, 33.688 million metric tonnes (MMT) of crude oil was produced in the country as against 33.508 MMT of actual crude oil production in the period April 2008-March 2009. |
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| As per the latest provisional data for the period April 2009 to March 2010 provided by the Ministry of Petroleum and Natural Gas, 47573 million cubic metres (MCM) of natural gas was produced in the country as against 32845 MCM of actual natural gas production in the period April 2008-March 2009. |
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| Contributing 27.1 per cent of India's energy demand, the northern region of India is responsible for about 26 per cent of overall emission from power sector, as per the CII KPMG Report on Water & Renewable energy. |
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| SECTOR FACTS |
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FDI inflows from non-conventional energy sources during the period April 2000 to March 2010 were US$ 634.35 million, according to the Department of Industrial Policy and Promotion (DIPP) |
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The petroleum and natural gas sector has attracted cumulative FDI worth US$ 2,665.52 million from April 2000 to March 2010, according to the Department of Industrial Policy and Promotion (DIPP) |
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| Investment Opportunities |
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| The Centre has instituted plans to boost solar energy amongst other renewable sources and set aside US$ 215.7 million for subsidising solar power. According to Secretary, Ministry of New and Renewable Energy (MNRE), Government of India, Mr Deepak Gupta, under the National Solar Mission, it was proposed to declare Chandigarh, Amritsar and New Delhi as solar cities where people would be encouraged to harness solar energy by rooftop panels and contribute to the national power grid. |
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| Commenting on future plans for the new energy sector, Gupta said MNRE was also encouraging independent power producers (IPPs) through effective facilitation by single window service in the Ministry. He also said that MNRE was targetting to produce 1,300-MW power from new energy sectors within next three years. |
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| The Prime Minister, Dr Manmohan Singh, at the Jawaharlal Nehru National Solar Mission in January 2010, had urged the industry to create 'Solar Valleys' and cash in on business opportunities being raised through development of non-conventional energy sources. He said that these valleys were expected to become the hubs for solar science, engineering and research, fabrication and manufacturing. He also referred to the target of 20,000 MW of solar generating capacity by the end of the 13th Plan period as ambitious. |
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| India is the fifth largest wind energy producer in the world, with installed capacity of nearly 10,500 MW and a target to scale up capacity to 14,000 MW by the end of 2011, according to industry sources. The government has targeted a 20,000-MW capacity by 2020 under the National Solar Mission. |
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| According to the Union Minister of New and Renewable Energy, Dr Farooq Abdullah, the government is planning to set up 1,100 MW grid-connected solar plants including 100 MW capacity plants as rooftop and smaller solar power plants for the first phase of the National Solar Mission till March 2013. The government has approved US$ 974.65 million for this. |
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| In addition, the government plans to generate 20,000 MW solar power by 2022 under the three-phase National Solar Mission, with 2000 MW capacity equivalent off-grid solar applications, including 20 million solar lights, also planned to be installed during this period. |
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| Several global venture capital (VC) and private equity (PE) companies will invest up to US$ 1 billion by the end of the current fiscal in high-growth, incentive-driven renewable energy companies, according to industry estimates. |
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| Investment Policy Updates |
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| The Indian government has proposed incentives of up to US$ 0.258 per kilowatt hour for power plants, 10-year tax holidays, electricity tariff exemptions and other preferential tariffs. There are also subsidies for solar power systems and small hydro power projects. |
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| To promote solar power for off-grid applications for both thermal as well as photovoltaic, the Government is offering financial support through a combination of 30 per cent subsidy and/or 5 per cent interest bearing loans for companies in the business. |
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| As per the Ministry of New and Renewable Energy (MNRE) Proposal for 11th Plan for Renewable Energy for Urban, Industrial and Commercial Applications - Subsidy / incentive is valid for only 2.5 million square metre targetted during first two years of the Plan (11th Five Year Plan – 2007-12). |
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| Following the Central Government's decision to enforce the Energy Conservation Building Code (ECBC) in new buildings to minimise the use of energy and recommendations to the state governments to follow the same with suitable amendments warranted by local circumstances and requirements, the state of Haryana has enforced the provisions of the code. The code is applicable to all buildings and complexes having a connected load of 500 KW and more, or having a contract demand of 600 KVA and more. Buildings not using electricity or fossil fuel and those using energy for manufacturing, are exempt from application of the code. |
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| Investment policies have been initiated to bolster investments through regulated means. These include: |
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FDI up to 100 per cent under the automatic route is permitted for oil and natural gas exploration activities, infrastructure for marketing of petroleum products, petroleum product pipelines and natural gas LNG pipelines |
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FDI up to 49 per cent is permitted under the Government route in petroleum refining in the private sector |
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| Source: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP) |
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100 per cent FDI into renewable energy through automatic route has been allowed by the Government |
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In the Union Budget 2010-11, the government announced the setting up of the National Clean Energy Fund (NCEF) for funding research and innovative projects in clean technologies. To build the corpus of the NCEF, clean energy cess on coal produced in India at a nominal rate of US$ 1.08 per tonne will be levied. This cess will also apply on imported coal |
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Moreover, the plan outlay for the Ministry of New and Renewable Energy has been increased by 61 per cent, from US$ 140 million in 2009-10 to US$ 226 million in 2010-11 |
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Plan allocation for the power sector has been increased from US$ 503 million in 2009-10 to US$ 1.2 billion in 2010-11 |
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| (Source: Union Budget 2010-11) |
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 Apart from being an obvious long-term market for African hydrocarbons, India is also globally recognised as a hub for business opportunities spread across the entire hydrocarbon production cycle. |
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S M Krishna
Union Minister for External Affairs |
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| WHAT'S NEW |
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| International Finance Corporation (IFC) and Helion Partners have made investments into Azure Energy. |
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| Orient Green Power Company has filed for a US$ 194.11 million initial public offering (IPO). The company plans to set up approximately 622 MW of wind energy projects, a 178.5 MW of biomass project, and a 15 MW small hydel project. |
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