Tata Power, part of India‚Äôs Tata Group, is increasingly exploring ways to develop distributed energy networks for India. The company expects its capacity to grow from 3,000 megawatts of power currently to 25,000 megawatts within the next ten years. In line with its sustainability plan, it appears that an increasing amount of power will be generated from clean and renewable energy, particularly hydro-power. BOSTON–For the most part, the world’s energy system is highly centralized. Tata Power of India is exploring whether smaller-scale distributed energy can work in a country where hundreds of millions of people don’t have access to electricity.

Earlier this month, I met with Avinash Patkar, the chief sustainability officer of Tata Power, which is the power division of India-based Tata, an industrial giant with businesses in steel, software, autos, chemicals, and telecommunications.

As electricity service is extended to more people in India, Tata Power is projecting rapid growth from about 3,000 megawatts of capacity now to 25,000 megawatts later this decade. As part of a long-term sustainability plan, Tata Power intends to beef up its use of clean, renewable power, notably hydropower, where it already has some projects under development, Patkar said.

But the company is putting smaller bets on other clean-energy technologies for distributed power generation, something U.S.-based utilities would not likely pursue. It has invested in an Australian enhanced geothermal company, a concentrating solar power company, and is bullish on the use of thin-film solar cells. In many cases, it’s a question of finding a business model that works with the distributed energy technology.

In one project, for example, Tata Power is pursuing a model where a cooperative of farmers would sell agricultural residue to Tata Power, which would operate an on-site power generation unit to sell power to that community. To generate power, Tata expects to use a small-scale 100-kilowatt biomass gasification system, Patkar said. But other technologies, such as wind or solar, should be explored as well, he said.

“It’s the ‘bottom of the pyramid’ idea: there are millions of people (who are potential customers) as long as you can customize a solution for them,” he said. “We have not yet come up with a model that works…(but) there is a market here, profits to be made if we could come up with a good distributed power system.”

While he was in Boston, Patkar visited Sun Catalytix, which Tata also invested in and hopes to test its product later this year. Sun Catalytix, which was spun out of the Massachusetts Institute of Technology, has developed a relatively cheap catalyst that can split water to make oxygen and hydrogen, which can be used to make electricity in a fuel cell. Its second-generation product, still a few years from commercialization, seeks to make electricity directly from water and a solar cell.

In the U.S., stationary fuel cells are typically used at commercial locations, such as retail stores or office buildings, which want reliable on-site power. But in India, the application of the technology is very different. Instead, it could be used to provide power to a village or a cell phone tower because telecommunication companies need to rely on costly diesel generators in the face of regular power outages.

“We feel this 25-kilowatt distributed power system will fit very well. You don’t even need a fuel cell. You could take the hydrogen and burn it in an internal combustion engine, which are available today,” Patkar said.

In another project, Tata will be investing a few million dollars in an algae biofuels project that will reduce carbon dioxide and provide the material for nutritional products and biofuel. Tata Power doesn’t have any immediate mandates that require it to reduce its carbon emissions, but the company is investing to improve its long-term strategy, Patkar said.

“First of all, it’s the right thing to do, but we think we’ll have a competitive advantage when CO2 regulation comes down the pike two or five years from now,” he said. “From a clean-tech point of view, we are taking a proactive approach…We think in the longer term, grid parity will be achieved cost-wise.”

One of the primary considerations for clean-technology deployment is the use of land, Patkar said. In hydropower projects, the company has said its goal is to not displace people from agricultural land.

If Tata Power does have an economic interest in pursuing distributed clean energy, its near future is mostly centralized dirty power. Of its 3,000 megawatts of generating capacity, about two-thirds of that comes from coal, gas, or oil. There are another 450 megawatts from hydro and 200 megawatts from wind. In the next 10 to 15 years, much of the new power to come online will come from burning fossil fuels.

“The nation and Tata Power are on a growth path and it is difficult in this hill which we are passing to suddenly become clean. We hope that once we are at that plateau, the next phase of growth after 2025, we will really need these [clean] technologies and expand on those,” he said. http://news.cnet.com/8301-11128_3-20047974-54.html