[The Vector] India’s Green Energy Potential

India is on the rise in the green energy domain.  The country increased its total capacity from 2% in 2003 to 10% by 2010. The market for renewable energy and related technologies and businesses is growing by 25% per year, according to a U.S. Commerce Department report.

Wind energy alone grew 33% in India over the last 5 years, with capacity at 10,000 MW at the end of 2009. Wind provides 70% of the renewable energy power generation. Small hydro is the second largest source of renewable energy in the country, with about 2,520 MW of capacity or 15% of total renewable energy. Biomass follows at 12% of total green power. Solar is the rising star of the future, experts say. It currently supplies about 6 MW of energy but is estimated to grow to 22 GW by 2022.

India is an Electricity Deficient Country – it had a peak demand of approximately 116 MW between April and December 2009, but only had 101 GW of supply. There is need and demand.  Like many other countries, coal supplies 53% of electricity generation, with gas at 10.5%; hydropower supplies 25% and nuclear about 3%. Renewable energy supples almost 8% of the total electrical generation.

A big boost – but an unexpected surprise — came in 2010 when the Central Electricity Regulatory Commission (CERC) mandated that utilities in India must generate 6% of their energy generation from renewable energy sources, up from the previous 4%. The ruling came as a bit of a surprise, because India does not have the capacity to meet the 6% mandate. This has generated more growth, jobs and investment to meet the demands. But it has already created somewhat of a financial burden, since CERC has allowed the utilities to buy Renewable Energy Certificates (RECs) if they are unable to generate the energy demand – and the utilities must bear the financial burden one way or the other.

Another unexpected boost came to India in light of a controversial provision in the U.S. stimulus package last year. U.S. citizens are given precedence over H-1B visa holders when hiring, if the firm received bailout funds. According to one study, the H-1B 6 year guest visa has allowed hundreds of thousands of Indian engineers, scientists and specialist to work in the U.S. which has helped transform U.S. technology and industry.  Manpower India, a global employment firm, says 1/3rd of the engineers in Silicon Valley are of Indian descent and 7% of firm CEOs are of Indian descent.  More than 100,000 Indian students pursue education at U.S. institutions of higher education.

(To be continued…)