Energy is an important input for economic development but today, the world’s energy supply is largely based on fossil fuels. These sources of energy will not last forever and have proven to be contributors to our environmental problems. This has lead to the governments around the globe and industries thinking seriously about alternative sources of energy. This need was further affirmed by the 1973 oil embargo and oil price shock of 2008 and the ever increasing oil prices since then. These issues along with declining availability of the fossil fuels has led to the fast development of renewable energy resources such as biomass, biofuels, wind, solar, geothermal, and hydro energies etc.
According to a study commissioned by International Energy Agency titled: “World Energy Outlook, 2008” the world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable – environmentally, economically, socially but this situation can be changed if we can secure the supply of reliable and affordable energy; and effect a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply.
Since exhaustible energy sources are limited, there is an urgent need to focus attention on development of renewable energy sources and use of energy efficient technologies. Now, more than ever, countries all over the world fully recognize the imperative to promote wide spread adoption of renewable energy into their country’s energy sources to promote sustained economic growth, social development and environmental stewardship. Following hydro, wind and biomass, all RE technologies are becoming cost-competitive with other low-carbon technologies in electricity generation. With increasing scope, scale, research and development, the costs of renewable energy technologies will come down allowing RE to make major contributions to electricity generations to electricity generation, heating and cooling and transport. It is estimated that Renewable energy could contribute at least half of all electric power in each of the large economies by 2050, even those with significantly higher electricity demand.
The major plus point of renewables: Renewable energies provide millions of people with access to electricity, thus enormously improving their living conditions and reducing poverty. Renewable energy equipment manufacturing and installation is high quality labour-intensive. RE asset operations require services, while biomass feedstock supply establishes a whole new value chain.
According to Renewables Global Status Report (2009 update) by REN21, the global renewable power capacity has reached 280,000 MW in 2008 – a 16% rise from 240,000 MW in 2007. Renewable energy’s share of the overall power generation market increased from 3.9% to 4.4% resulting from the investments made in response to government policies over the previous few years. While Wind power grew by 29%, the grid-tied solar PV grew by 70%. For several previous years, the modern renewable energy industry has been viewed as a “guaranteed-growth” sector, and even “crisis proof” due to the global trends underlying its formidable growth through out the past decade. In 2008, renewable energy resisted the credit crunch more successfully than many other sectors and new investment reached USD120 billion, up 16% over 2007. For the first year ever that new power generation investment in renewables was greater than investment in fossil fueled technologies. The report shows, the renewable energy sector offers an essential path for growth that can stimulate economic recovery and job creation without the burden of increasing carbon emissions.
India emerged in 2008 as an aspiring producer of solar PV. Both National and State Governments announced new policies to support solar PV manufacturing in special economic zones, including capital investment subsidies of 20 percent. These policies led to USD 18 billion in new solar PV manufacturing investment plans or proposals by a number of companies.
The exploitation and development of various forms of energy and making energy available at affordable rates is one of the thrust areas of the Government of India. India’s energy supply comes from different sources, coal, hydropower, oil and gas, and various form of non-conventional energy. Realizing the need for an appropriate energy policy to sustain faster and more inclusive growth, the Government of India has recently brought out an Integrated Energy Policy linked with sustainable development that covers all sources of energy and addresses all aspects of energy use and supply including energy security, access and availability and affordability and pricing as well as efficiency and environmental concerns. While underlying the importance of the renewables in India’s energy sector, the Policy states that solar power particularly could be an important player in country attaining energy independence in the long run.
With an increasingly favourable regulatory and policy environment along with a growing number of enterprising entrepreneurs and project developers, India is ranked the third most attractive country to invest in renewable energy, after USA and Germany, in the Ernst and Young Country attractiveness indices.