Indian Renewable Energy Status Report Background Report for DIREC 2010 NREL/TP-6A20-48948 October 2010 D. S. Arora (IRADe) | Sarah Busche (NREL) | Shannon Cowlin (NREL) | Tobias Engelmeier (Bridge to India Pvt. Ltd.) | Hanna Jaritz (IRADe) | Anelia Milbrandt (NREL) | Shannon Wang (REN21 Secretariat) I RADe NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. 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Box 62 Oak Ridge, TN 37831-0062 phone: 865.576.8401 fax: 865.576.5728 email: mailto:[email protected] Available for sale to the public, in paper, from: U.S. Department of Commerce National Technical Information Service 5285 Port Royal Road Springfield, VA 22161 phone: 800.553.6847 fax: 703.605.6900 email: [email protected] online ordering: http://www.ntis.gov/ordering.htm This publication received minimal editorial review at NREL Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste Acknowledgments This report was produced in collaboration between National Renewable Energy Laboratory (NREL) in the United States, German Technical Cooperation (GTZ), Renewable Energy Policy Network for the 21st Century (REN21) Secretariat in France, and Integrated Research and Action for Development (IRADe) in India. REN21 Secretariat has coordinated the process. The co-authors are extremely grateful for the masterful editorial work done by Paul Gilman and Mary Lukkonen. The co-authors thank Joshua Bauer for developing the graphics and designing the cover for this report. Finally, the co-authors would like to thank those who provided their feedback on earlier drafts of this report, in particular Nina Negic of Bridge to India Pvt. Ltd and Ron Benioff of NREL. Their suggestions and insights resulted in substantial improvements to the draft published here. Financing was provided by the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety (BMU) and U.S. Department of Energy and Department of State. Authors D. S. Arora (IRADe) Sarah Busche (NREL) Shannon Cowlin (NREL) Dr. Tobias Engelmeier (Bridge to India Pvt. Ltd.) Hanna Jaritz (IRADe) Anelia Milbrandt (NREL) Shannon Wang (REN21 Secretariat) Editing, Design, and Layout Joshua Bauer (NREL) Paul Gilman (NREL Consultant) Mary Lukkonen (NREL) Contributors Jens Burgtorf (GTZ) Nina Negic (Bridge to India Pvt. Ltd.) Dr. Jyoti Parikh (IRADe) Isabelle-Jasmin Roth (Bridge to India Pvt. Ltd.) Virginia Sonntag-O’Brien (REN21 Secretariat) iii List of Acronyms ADB Asian Development Bank APCTT Asia Pacific Centre for the Transfer of Technology ARTI Appropriate Rural Technology Institute BEE Bureau of Energy Efficiency BGPG Biogas Distributed/Grid Power Generation Program BHEL Bharat Heavy Electricals Ltd BLY Bachat Lamp Yojana BPL below poverty line CDM Clean Development Mechanism CEA Central Electricity Authority CER certified emission reduction credit CERC Central Electricity Regulatory Commission CFA Central Finance Assistance CFL compact fluorescent lamp ckm circuit kilometers CSP concentrated solar power CSR corporate social responsibility C-WET Centre for Wind Energy Technology DANIDA Danish International Development Agency DDG Decentralized Distributed Generation DIREC Delhi International Renewable Energy Conference DNES Department of Non-conventional Energy Sources DNI direct normal irradiance EBP ethanol blended petrol EGTT Expert Group on Technology Transfer EMD earnest money deposit EPC engineer-procure-construct EU European Union GBI Generation-based Incentive GDP gross domestic product GEF global environment facility GHG greenhouse gas GHI global horizontal irradiance GW gigawatt (one billion watts) GWh gigawatt-hour GWEC Global Wind Energy Council ha hectare IDBI Industrial Development Bank of India IDFC Infrastructure Development Finance Corporation IEA International Energy Agency IEC International Electrotechnical Commission IFC International Finance Corporation IGCC integrated gasification combined cycle INR Indian Rupee IREC International Renewable Energy Conference IREDA India Renewable Energy Development Agency JNNSM Jawaharlal Nehru National Solar Mission KfW Kreditanstalt für Wiederaufbau (German Development Bank) iv kW kilowatt kWh kilowatt-hour LPG liquefied petroleum gas MENA Middle East and North Africa MFI microfinance institutions MNRE Ministry of New and Renewable Energy MoP Ministry of Power MoRD Ministry of Rural Development MPNG Ministry of Petroleum and Natural Gas MSW municipal solid waste MTOE million tonnes of oil equivalent MVA mega volt amperes MW megawatt (one million watts) MWh megawatt-hour NABARD National Bank for Agriculture and Rural Development NAPCC National Action Plan on Climate Change NASA U.S. National Aeronautics and Space Administration NBMMP National Biogas and Manure Management Program NEP National Electricity Policy NGO non-governmental organization NREL National Renewable Energy Laboratory NTPC National Thermal Power Corporation NVVN NTPC Vidyut Vyapar Nigam Ltd PFC Power Finance Corporation PPA Power Purchase Agreement PV photovoltaic R&D research and development R&M renovation and modernization RE renewable energy REC Renewable Energy Certificates REDB Rural Electricity Distribution Backbone REEEP Renewable Energy and Energy Efficiency Partnership REN21 Renewable Energy Policy Network for the 21st Century RGGVY Rajiv Gandhi Grameen Vidyutikaran Yojana RPO Renewable Purchase Obligation RVE Remote Village Electrification SEB State Electricity Board SEC Solar Energy Centre SEFI Sustainable Energy Finance Initiative SERC State Electricity Regulatory Commission SIPS special incentive package scheme SME small- and medium-sized enterprise SSE Surface Meteorology and Solar Energy SWERA Solar and Wind Energy Resource Assessment SWH solar water heater TERI The Energy and Resources Institute TWh terawatt-hour UNDP United Nations Development Programme UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change v USAID United States Agency for International Development USD U.S. dollar VESP Village Energy Security Programme WIREC Washington International Renewable Energy Conference vi Executive Summary India has great potential to accelerate the use of its endowed renewable resources to power its growing economy with a secure and affordable energy supply. The Government of India recognizes that development of local, renewable resources is critical to ensure that it is able to meet both its economic and environmental objectives, and it has promoted this development through policy action. The Indian economy has experienced tremendous growth over the past several years. Energy, in all its forms, underpins both past and future growth. For the Indian economy to continue this trajectory, India needs to address its energy challenges, which cross all sectors and impact all citizens. Electricity—both in terms of quality and access—is a key challenge. The quality of the current electricity supply is impeding India’s economic growth. Issues such as voltage fluctuation, frequency variation, spikes, black-outs, brown-outs, and other disruptions impact industrial, commercial, and residential consumers. The addition of grid- tied renewable power can help address these issues. The gap between the demand of customers connected to the grid and the available electricity supply reported by the Central Electricity Authority for 2009–2010 was almost 84 TWh, which is 10% of the total requirement. The peak demand deficit was more than 15 GW, corresponding to a shortage of 12.7%. Closing this gap will be critical for India to achieve its growth targets, and renewable energy has the potential to improve energy security and reduce dependence on imported fuels and electricity while striving to meet those goals. Much of India’s population is not experiencing the benefits of economic growth. The Government of India sees the provision of electricity to all as critical to inclusive growth. It recognizes off-grid renewable energy as a practical, cost-effective alternative to an expansion of grid systems in remote areas of the country. To be able to provide adequate electricity to its population, India needs to more than double its current installed capacity to over 300 GW by 2017. Also, India’s demand for oil in 2015 is expected to be 41% higher than in 2007 and almost 150% higher in 2030—needed primarily to feed a growing