Renewable Energy Promotion and Training through SMEs in Rural India-Potentials and Challenges

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1 Renewable Energy Promotion and Training through SMEs in Rural India-Potentials and Challenges R. Arun Prasath, Assistant Professor Laboratory for Energy, Materials and Sustainability Centre for Green Energy Technology Pondicherry University Puducherry R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 1

2 INDIA Yanam Mahe PONDICHERRY Karaikal R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 2

3 Outline India s Energy Scenario -Reserve, Production, Consumption, Power Distribution, India s Renewable Energy -Current production, Potential, Challenges, Schemes.. SMEs and their role to promote RE in rural India - introduction, Sectors-models, Potential, Challenges,.. Conclusion with some pictures of Pondicherry R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 3

4 Fossil Fuel Reserve and Production India s energy is largely met by coal Ranks 4 th in coal reserve with 7% of world reserve ~ 64,786 million tons 3 rd largest producer and consumer of coal Coal could lost ~100 years, ----imported stood at 36% for India s oil and natural gas 0.7% and 0.8% to the world reserve 1201 million metric tons of oil and 1437 billion cubic meters of gas Import 75% of all crude oil and expected to increase to 90% by 2030 Import about 28% natural gas for the year 2010, expected to increase.. R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 4

5 Indian Energy FACTS distribution 2012 Total Power production capacity of over 209 GW (as on ) Indian Energy distribution Renewable Energy contribution as of now is about 27 GW ~12% (below the average of world RES 19%, REN21 source) Per capita electricity consumption is very low ~ 779 kwh per year (~10 times less than DC, India Vision 2020 targets 2460 kwh). Economy projected to grow at average of 5-7% per annum! Power Generation in India 400 million live without electricity in over 90,000 villages Currently, average power cut in most of the states, around 10-18hr/day! R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 5

6 Renewable energy in India Indian Renewable Energy Grid-connected as on 2012 Total Renewable Energy (RE) installed capacity of 26.9 GW (as on Sept 2012) Grid connected 26.1GW, and off-grid connected 7734MW Annual growth rate at 18% in the 11 th plan ( ) compared to just 5% Non-RE. Separate Ministry, Ministry of New and Renewable Energy (MNRE) Off-grid-connected as on 2012 MNRE estimates potential as 87 GW excluding solar energy, South Asia Energy Unit report estimated as 150 GW, IE estimates above ~1000 GW! India aims for 50% renewable by 2050! R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 6

7 India s Solar Energy Potential Thermal PV clear sunny days/year 4-7 kwh/ m 2 /day India ranks 7 th in PV cell production! (export to Germany, Italy, NL, Spain, Aus, USA,) ~ 1 GW SOLAR eneryg produced via gridconnected and off-grid achieved (Sept 2012, MNRE) R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 7

8 India s Solar Energy Potential Thermal PV The Indian Energy Portal estimates that if 10% of land used for solar energy harvesting (from 12.5% available land), the installed solar capacity would be at 8000 GW! R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 8

9 Potential to be a PV leader! Source EPIA R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 9

10 Indian Govt Initiatives: JNNSM Jawaharlal Nehru National Solar Mission Aimed towards establishing brand Solar India Install a total of 20GW grid connected power in 3 phases by 2022 Phase 1: 1GW (grid connected / utility scale) power by 2013 (using both Solar PV and Solar thermal), Solar Thermal Collector of 7 million sq m Phase 2: ~5-6GW by 2017, Solar Thermal Collector of 15 million sq m Phase 3: touch 20GW by 2022, Solar Thermal Collector of 20 million sq m Scale to 100GW by 2030 and to 200GW by 2050, and beyond! R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 10

11 Installed Capacity in

12 Renewable energy in India Indian Govt Initiatives: Jawaharlal Nehru National Solar Mission National Action Plan on Climate change REC Mechanism by CERC 2010 regulation Wind and other RE Power in India: India ranks fifth in wind power in the world, 15 GW as on Sept 2012, - 71% of India s RE The estimated potential of wind energy is around 50 GW to 1000 GW ~ employ 75K by 2020 Bio-energy potential 51 GW, aims ~ 10 GW by 2022 (agro waste and energy plantation crops) Biofuel ~ aims 20% blend of biodiesel/ bioethanol by 2017 and WtE potential ~ 5 GW ~ employ 561K by 2020 (all bio-energy ) SHP potential ~ 15 GW ~ employ 30K by 2020 R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 12

13 RE promotion Challenges! Capital Cost- Lowering the cost of manufacture Fluctuating radiation and lack of authentic radiation data Lack of trained man power- inexperienced and insufficient manpower, lack of institutional training, etc. Policy Single tariff for entire country, local/state policy does not link central policy Financial- Banks are skeptic, low return due to high competition, no specific feasibility study before bid. Uniform supply across the states Lack of costumer awareness R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 13

14 Real RE promotion Challenges Challenges!! Logistic Land availability issues (land accusation bill!), marginal farmers, power evacuation, grid network and stability, etc. Environment: up to 48 deg C in Rajasthan, Dust storm- dry and semi desert areas, hard water and salty water, etc Lack of collaborative goal driven R & D Lack of clarity on technologies as technologies still evolving --Technology innovation is high Indian R & D is not getting anyway Lack of real commitment and misuse of subsidy Corruption & Lack of standards Off-peak seasons reduce cash flow R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 14

15 Major achievements of India About 12% (~26 GW) of grid connected power is from renewable power. About 774 MW in the off-grid/decentralized renewable systems Deployment of lakh family biogas plants 8846 remote village/hamlets provided with renewable energy Systems 6.7 lakhs of solar photovoltics home lighting systems 8.2 lakhs of solar lantern supplied R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 15/31

16 Major achievements of India Largest solar-stem cooking system for 50,000 persons/day (in a temple complex at Shirdi) The MNRE programmes established first biogas bottling segment, (at Talwade village in Nashik, Maharashtra with filling capacity of 16 cylinders per day with 9 kg of biogas) Largest size solar dishes at BG Chitale Dairy, Bhilawadi, Dist Sangli, Maharashtra for milk pasteurization Demonstration of the use of biofuels, zero emission vehicles under research, development and demonstration programmes Various research organizations supports R&D in RE and promotes green energy business R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 36/43

17 SMEs role in RE promotion SME s fact Micro, small, and medium enterprises constitute to almost 90% of the total industrial establishments in India accounts ~ 45% of the industrial production and 40% of the total exports in the manufacturing sector. It employs an estimated around 60 million persons Ministry of MSMEs to train 500 million people by 2022 Contributes nearly around 10% in total GDP Dominated sectors in India Agricultural Inputs, Food Processing, Chemicals & Pharmaceuticals, Engineering; Electricals; Electronics Electro-medical equipment, Textiles and Garments Leather and leather goods, Meat products, Bio-engineering, Sports goods, Plastics products, Auto Components, Gems & Jewellery Sea- Food, Pumps,Ceramic Tiles & Sanitary Ware, Computer Software, services etc. R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 17

18 SMEs role in RE promotion Why SEMs in India should look for RE-particularly in rural areas? Use of outdated technologies BEE estimates of saving of per cent of the total energy SME contributes to nearly 70 per cent of industrial pollution ~ above 50% power usage compared to heavy industry Frequent power cuts (10 hr to 18 hr/day!) RE unprecedented growth in the last decade ---huge potential for (a) equipments / products, and (b) services. Low-end products (such as inverters, auxiliary equipments) -expertise in low-end products Promote rural economic growth, reduce the adverse environmental impacts, reduce carbon foot print, promote sustainable development, and become a leader in renewable energy technologies for rural areas R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 18

19 SMEs -RE promotion potential Govt. programs- Ministry of Power, Ministry of New and Renewable Energy (MNRE), Ministry of Rural Development, Ministry of Micro, Small and Medium Enterprises (MSMEs), etc. - promote rural electrification through SMEs. MNRE - a separate ministry to promotes renewable energy for rural applications through schemes- remote village electrification, village energy security projects, solar power and hydro project scheme, family type biogas plants, national biomass cook stoves initiatives, decentralised renewable energy for villages, hybrid renewable technologies, etc. Non-Profit organizations/international bodies in association with government agencies promote renewable energy through SMEs Schemes with subsidy with Small Industry Development Bank of India (SIDBI), Credit Linked Capital Subsidy Scheme (CLSS), National Bank for Agriculture and Rural Development, etc. In National Solar Mission, it is asserted The SME sector forms the backbone for manufacture of various components and systems for solar systems. India s high potential to harvest the renewable energy because of strategic geographic location and world young population. Power cut (10-18 hr/day!) R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 19

20 SMEs -RE promotion potential Currently about 50% of MSMEs are in closer stage due to power crisis! R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 20

21 SMEs -RE promotion models Successful models: Biomass gasification systems for thermal application- textile dyeing, food processing, etc Solar-grid hybrid models for sewing machines (REEEP supported project with SELCO + SEWA BANK) SME clusters model to promote EE and RE (Several units together to install solar power plant) Linking the technology with businesses that support livelihood in rural areas, e.g, TERI model Off-grid/micro grid systems are appropriate for rural energy supply (Village Level Entrepreneur) Cluster Model: UNIDO's ongoing projects + BEE has initiated EE and RE in selected in 12 selected energy-intensive MSME clusters The sectors covered: Brass, Ceramics, Dairy, Foundry and Hand Tools R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 21

22 SMEs -RE promotion challenges Lack of awareness Limited access to information, knowledge and technology Lack of network within SMEs Fragmentation of policies across several government agencies Limited access to finance technological and market uncertainty are particularly high, raising risk premiums Lack of capacity of SMEs in adopting clean technologies Training facilities and innovation in RE field is very less and hence very few SMEs are interested in it. R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 22

23 SMEs -RE promotion challenges Under-pricing and detrimental subsidies on conventional energy favor unsustainable patterns of consumption and greater emissions Remote communities are difficult to reach (increased costs for sales, after- sales service; repair; question of spare parts availability). Supply-side barriers barriers in the supply chain for the delivery of EE/RE technology and services. Demand-side barriers barriers restricting the level of demand for EE/RE technology and services. Barriers to national uptake barriers restricting the national uptake and implementation of EE/RE technology and services. Policy barriers barriers in the policy and knowledge within governmental institutions for the implementation of EE/RE technology and services- No REC for off-grid projects! There are caps R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 23

24 Pondicherry R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 24

25 Pondicherry R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 25

26 Pondicherry R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 26

27 Pondicherry R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 27

28 Pondicherry Thank you very much R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 28

29 Thank you for your kind attention! Dr. R. Arun Prasath Assistant Professor Laboratory for Energy, Materials and Sustainability Centre for Green Energy Technology Pondicherry University, India Office: Mobile: Fax: Web: R. Arun Prasath SEPT20YEAR 2012, Nov 24th, Leipzig 29