India invites FDI in alternate energy sector
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India invites FDI in alternate energy sector

Friday, 20 June 2003, 07:00 Hrs
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CHENNAI: India will increase its renewable energy share by 10 percent and will produce by 2012 about 10,000 MW of power from alternative sources.

M. Kannappan, the minister of state for non-conventional energy, said this Thursday while opening the second national conference and exposition on green power organised by the Confederation of Indian Industry here.

He said India would be looking for 600 billion worth of private and foreign direct investment (FDI) to meet this goal.

"This offers a business potential of nearly $20 billion for potential investors in the renewable energy technologies sector," he pointed out.

At the two-day meet, the CII released a status paper on renewable energy in India which said around 75,000 megawatts of the current installed capacity of nearly 108,000 MW is thermal energy which is "costly and releases higher emissions resulting in environmental degradation".

The experts and the minister gathered there said this would have to change if India were to ensure sustainable development for its one billion people and meet all their energy needs.

Comparing India with Denmark where over 20 percent of total energy is generated from alternative sources, experts pointed out that renewable energy generation costs had come down to as low as five cents per kilowatt hour.

Almost "150 billion will have to come as equity from the private sector, supported by credit facilities of 450 billion from financial institutions", Kannappan added.

"We would welcome joint ventures at the enterprise level and favourably consider even 100 percent equity participation for setting up a hardware (energy making equipment) production facility, for project development or for technical services," Kannappan announced.

Today the installed capacity of alternative energy is only about 4,000 MW. India, the fifth largest wind power producer in the world, produces only about 1,800 MW of wind power. Just 112 MW is solar power, about 26,000MW is hydel.

"We plan to give a major boost to renewable energy development" and "the ministry has also taken up the task of electrifying 18,000 remote villages through alternative sources," the minister said.

He held the "poor financial health of state electricity boards" and "inadequate private sector investments" responsible for the slow alternative energy capacity addition.

Experts pointed out that the new Electricity Act, which had repealed laws as old as 1903, would go a long way to help the renewable energy sector.

The minister emphasised that the "Electricity Act 2003 does way with the requirement of licensing for generation and distribution in rural areas".

The new act also requires state commissions to promote renewable resource generated electricity by providing suitable grid connectivity facilities to the generator.


Source: IANS
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