World Bank backs Solar Power in India

from http://www.atimes.com

Earth, wind, solar fire fuel India future

By Siddharth Srivastava

NEW DELHI - There has been significant corporate movement to tap the alternative/renewable-energy situation in India.

Last week, a report released by the United Nations Environment Program said global investment in renewable energy, especially solar, wind and biofuel, rose from US$80 billion in 2005 to $100 billion last year, with an especially high rate of growth in developing countries such as India, China and Brazil. Renewable-energy investments in developing countries accounted for 21% of the total.

Biofuel
Recently, British bio-diesel major D1 Oil announced plans to expand operations in India. The company already has agreements with Mohan Breweries and Williamson Magor for jatropha (India's main bio-diesel weed) cultivation and processing. D1 already has 20,000 hectares of jatropha growing in four southern and central Indian states for Mohan Breweries.

The potential of using jatropha for bio-diesel has also attracted Chinese interest in India. A 13-member Chinese delegation was in India recently to explore the possibility of cultivating the weed and exchanging technology.

India's Reliance Industries has already bought large tracts of land in many states for jatropha cultivation, and wind-turbine producer Suzlon Energy Ltd has said it plans to enter the bio-diesel sector in the next four years. Others plunging into the bio-diesel pool include Indian Oil Corp, auto maker Mahindra & Mahindra, which is set to roll out its first biofuel vehicles by the end of the year, and Southern Online Bio Technologies, which has announced plans for a large bio-diesel production unit in Andhra Pradesh in an agreement with Lurgi Lift Sciences of Germany.

However, the enthusiasm for a biofuel future is tempered with not-unfounded fears of jatropha cultivation competing for precious land traditionally devoted to edible agriculture.

Others say India's biofuel drive has political acceptance because it will result in higher farm incomes. Examples of political favor for biofuel include New Delhi's plans to launch a nationwide biofuel promotion, with a special emphasis on jatropha, karanj and neem as plants that can be grown in wastelands and used as alternative sources of fuel to petroleum.

Bio-diesel has also been exempted from excise duty, and a National Biofuel Development Board is planned. Federal Agriculture Minister Sharad Pawar has also been promoting ethanol in the face of recent bumper crops and falling prices, both domestic and global.

Solar and wind
California-based Signet Solar will invest US$2 billion over the next 10 years to set up three plants in India to manufacture solar photovoltaic (PV) cells. Currently, Moser Baer Photo Voltaic (MBPV) dominates Indian production of solar PV cells.

Each of the Signet Solar plants will have an annual output of 300 megawatts, and the initial investment will be $150 million.

The global photovoltaic market has seen high growth, and sales are expected to rise from the current $6 billion to $40 billion by 2010.

Solar-energy efforts were also recently boosted when New Delhi finally announced long-awaited incentives for semiconductor use and manufacturing that include tax exemptions and subsidies.

Taking advantage of the new semiconductor-incentive policy, MBPV announced that it would invest $250 million to expand its solar-cell-making capacity. MBPV is scheduled to ramp up its solar PV cell capacity to 200MW in 18 months from the current 40MW. International Finance Corp, a private-sector arm of the World Bank, recently forwarded a $22.5 million loan to MBPV to promote solar energy in India.

Meanwhile, US wind-energy company AES Corp is exploring the possibility of building a wind-turbine manufacturing unit in India. "We are looking at a low-cost destination, and India fits into this category," AES executive vice president Mark Woodruff said.

Several Indian state-run oil production, exploration and marketing companies are also investing in renewable-energy projects.

Oil and Natural Gas Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp are planning to set up 50-100MW wind-energy projects for captive use and may also sell any surplus power to third parties.

India's state-run National Thermal Power is planning a joint venture with global equipment maker ABB to enter the wind-energy sector with plans for 1,000MW of renewable energy capacity over the next 10 years.

Indian wind-energy major Suzlon has successfully concluded its acquisition bid for Germany's Repower Systems AG, and now controls more than three-quarters of votes in the Hamburg-based company.

Suzlon also signed a contract for 400MW of wind-turbine capacity with PPM Energy of Portland, Oregon. "This agreement is Suzlon's single largest contract for wind-turbine capacity," said Suzlon.

Siddharth Srivastava is a New Delhi-based journalist.


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