Monday, June 7, 2010

Energy: To lighten a Billion smiles

Chennai, India – 22 May 2010 – I am touring India to meet the leaders of the emerging renewable energy industry. I’m on my way to The Siva Group, just after a visit to Orient Green Power, when I see a billboard promising the people of India: “Energy: To lighten a billion smiles.”

This billboard cannot come to my attention at a better time. It reminds me how important renewable energy is for developing countries and the rest of the world as well. The day before, when I arrived in Bangalore to visit GVK, the local newspapers were reporting long outages and explaining that a city that aspires to be the Silicon Valley of India still depends on generators for its electric power.

The Times of India reported on 19 May: “This is one of the worst situations in the past two decades. Five to six hours of intermittent power cuts every day have crippled industry. All process industries have come to a halt as production costs have increased by 60% and the output has come down by 10%."

The reason for the long outages is the low quality of the coal and therefore poor efficiency of the turbines. In short, the energy sources of today cannot light a billion smiles here, at least for now. But there is great hope in Modern India of developing new technologies to harness the sun, the wind and biomass to generate the energy this country needs.

The Future of Energy in Modern India
Solar energy is starting to develop in India thanks to the Jawaharlal Nehru National Solar Mission, and to private enterprise initiatives as well. One of the most promising technologies being developed is Thermal Solar, also known as Concentrated Solar Power (CSP).

Expectations for the growth of CSP are high, as evidenced by these recent reports:
  • In its Global Outlook 09, Greenpeace predicts that CSP could meet up to 7% of the world’s power needs by 2030 and fully one-quarter (25%) by 2050 in its most optimistic yet possible scenario;
  • The International Energy Agency predicts in its 2010 Technology Roadmap that CSP could provide 11.3% of global electricity needs by 2050;
  • iSuppli predicts that CSP will be the fastest-growing solar sector and will expand by a 37X factor from 2009 to 2014, compared to just a 6X increase for PV during the same period.
Some key reasons for the soaring development of CSP, include:
  • It is clean, generating a low level of carbon emission compared to photovoltaic (PV) solar cells, which produce toxic waste in manufacturing;
  • It has the capacity to store heat energy for later conversion to electricity, unlike PV;
  • It is simpler and easier to manufacture, and more land-efficient, than PV;
  • Because it costs less than PV, it offers the possibility of reaching grid parity faster than PV alone;
  • It can be used to improve the output of existing power plants (such as Bangalore’s Peenya unit) by producing steam to optimize the use of installed turbines;
  • It can be used to supply the specialized demands for electric power by industrial applications ranging from food processing to desalination;
  • It suits large-scale utilities, compared to PV, which is typically installed locally, such as on rooftops.
CSP is in fact a small but fast-growing part of global energy production already. Annual global CSP installations are projected to reach 10.8 GW in 2014, up from just 0.29 GW in 2009 and an estimated 1 GW in 2010. In comparison, PV installations will amount to 45.2 GW in 2014, up from 7.0 GW in 2009 and an estimated 15 GW in 2010.

Even with all this momentum, “lighting a billion smiles” won’t be easy. The Jawaharlal Nehru National Solar Mission launched in 2009 with the ambitious targets of generating 1 GW of solar power by 2013 and reaching grid parity by 2022 through the generation of 20 GW of solar power. Such targets should ignite major industrial development in the coming years, and face challenges such as land acquisition and financing. CSP, which accounts for approximately 60% of the solar energy target, will require $8 Billion in equity financing and $17 Billion of debt financing.

Do you think India will achieve this ambitious solar mission?