The Indian government is set to add 17,000 MW of renewable-based power generation capacity between 2012 and 2017, an investment of close to $34 billion. With a growing economy that suffers from frequent energy shortages and relies on coal and oil for approximately 65% of its energy needs, the government is committed towards building the capacity of more sustainable energy sources. According to Indian Energy Secretary, Uma Shankar, the country expects electricity demand to increase from 900 billion kilowatt hours to 1,400 billion kilowatt hours by 2017, which will require additional capacity of 100,000 MW during the next five year plan.

By Rakesh Sharma and Eric Yep
NEW DELHI – India plans to add 17,000 megawatts, or 17 gigawatts, of renewable-based power generation capacity between 2012-17, requiring an investment of up to 1.5 trillion rupees ($33.8 billion), as the country attempts to bridge its energy deficit and move to cleaner energy sources, the renewable energy secretary P. Uma Shankar said Thursday.
India, the world’s second-fastest growing major economy, is aiming for double-digit gross domestic product growth in the next few years, which needs to be sustained with massive energy supplies.
But the South Asian nation suffers from chronic energy shortages and relies heavily on imports of fossil fuels to meet this energy demand.
Its ambitious renewable energy targets reflect global climate change commitments, energy security, tightening global supply, rising energy costs, environmental concerns and increasing opposition to nuclear power.
According to the International Energy Agency, coal accounts for about 40% of India’s total energy consumption, oil for about 24% and natural gas for 6%.
“India’s electricity demand is expected to increase from 900 billion kilowatt hours to 1,400 billion kwh by March 2017. To meet this demand we will need a capacity addition of 100,000 megawatts during the next five-year plan” Mr.Shankar said at a conference.
More than half of India’s current power generation capacity of 173.6 gigawatts is based on coal and this is expected to continue for future capacity additions.
India currently has 20,000 MW of renewable energy capacity, constituting more than 11% of the country’s total power generation capacity, Deepak Gupta, secretary at the Ministry of New and Renewable Energy, said Thursday.
Renewable energy under the ministry includes energy sources such as solar, wind, biomass and small hydroelectric projects, but excludes large-sized hydroelectric projects.
A significant chunk of renewable energy investment in the next five-year economic plan is expected to come from the private sector, Mr. Gupta said.
“We estimate that India’s climate economy will grow around five-fold over this next decade, from $23 billion in 2009 to $135 billion in 2020, implying a compounded annual growth rate of 17% over 2009-20,” HSBC said in a note earlier this year.
“By 2020, India’s climate economy will be equivalent to 3.3% of India’s estimated GDP–50% larger than the global average of 2.1%,” HSBC said.
India’s power sector overall will need an investment of $300 billion to $400 billion during the next five-year economic plan that starts April 2012 and ends March 2017 to meet its generation targets, power secretary Mr. Shankar said.