Report-2

Depth of Industry Mapping

Introduction:
Energy has been universally recognized as one of the most important inputs for economic growth and human development. There is a strong two-way relationship between economic development and energy consumption. On one hand, growth of an economy, with its global competitiveness, hinges on the availability of cost-effective and environmentally benign energy sources, and on the other hand, the level of economic development has been observed to be reliant on the energy demand.
Recent technical developments and reductions in the cost of all major categories of renewable energy technologies have been substantial. Some sources suggest that the application of all renewable technologies have expanded by nearly three orders of magnitude over the past 15 years. Renewable energy technologies such as photovoltaics (PV), solar thermal, wind, and biomass are now being used successfully
for both subsidized and commercial small-scale applications. Wind power is increasingly being used for large-scale commercial power generation projects.

Demand and supply scenarioIn the recent years, India’s energy consumption has been increasing at one of the fastest rates in the world due to population growth and economic development. Primary commercial energy demand grew at the rate of six per cent between 1981 and 2001 (Planning Commission 2002). India ranks fifth in the world in terms of primary energy consumption (Table E.1), accounting for about 3.5% of the world commercial energy demand in the year 2003. Despite the overall increase in energy demand, per capita energy consumption (Table E.1c) in India is still very low compared to other developing countries.
India is well-endowed with both exhaustible and renewable energy resources. Coal, oil, and natural gas are the three primary commercial energy sources. India’s energy policy, till the end of the 1980s, was mainly based on availability of indigenous resources. Coal was by far the largest source of energy. However, India’s primary energy mix has been changing over a period of time. Despite increasing dependency on commercial fuels, a sizeable quantum of energy requirements (40% of total energy requirement), especially in the rural household sector, is met by non-commercial energy sources, which include fuelwood, crop residue, and animal waste, including human and draught animal power. However, other forms of commercial energy of a much higher quality and efficiency are steadily replacing the traditional energy resources being consumed in the rural sector.Resource augmentation and growth in energy supply has not kept pace with increasing demand and, therefore, India continues to face serious energy shortages. This has led to increased reliance on imports to meet the energy demand.
Concentrating particularly on the power industry , the statistics are dismal.
The table below shows the gap between the electricity demanded and electricity made available in the country. This is apart from the fact that many villages in India are still not electrified.

1Indicator
2004
2005
2006
2007
2008
Electricity requirement
591373
631757
690587
739345
777039
Electricity availability
548115
578819
624496
666007
691038
Electricity shortages
43258
52938
66091
73338
86001
Electricity shortages as per cent of requirement
7.31
8.38
9.57
9.92
11.07








% Shortage of electricity required 1


In spite of the long-term decline in costs for installed capacity of renewable energy technologies, and a large demand for renewable energy in developing countries, large-scale investments remain elusive.

First, there is a need to provide grant or technical assistance funds to identify renewable energy programs and to conduct project preparation so that they can be incorporated within subsequent implementation loans. Second, market potential can be enhanced by increasing the awareness within the energy industry of the possibilities created by new and more cost efficient renewable technologies. This can be accomplished by providing education and training to people in the energy industry, financiers and regulators. Third, structural reform of the energy sector in many countries can provide the opportunity for
commercial supply of electricity, private investment and hopefully improve the returns on
renewable energy investments. Finally, to ensure long-term success of a renewable energy investment program there must be adequate attention to the preparation and financing of the program at the outset followed by continuous training, maintenance and support services for the life of the project.