With the roaring conventional fuel scarcity and environmental problems all over the world, a shift towards clean resources is need of hour now. This report summarizes, present opportunities and challenges, for a new company entering the renewable market in India.

1. A Report on Renewable Energy Conference
(Explore and Discover Opportunities in India’s Renewable Sector)
Taj Mahal Palace, Mumbai, India, 25-26 September 2012
PAWAN SHARMA
(pgcim12.pawans@spjimr.org)
MBA INTERNATIONAL MANAGEMENT
SP JAIN INSTITUTE OF MANAGEMENT AND RESEARCH

2. Acknowledgement
With a sense of gratitude, I would like to
acknowledge the support of Mr. Shrikar Dole,
Regional Manager, European Business and
Technology Centre Mumbai who gave me this
opportunity to be the part of the knowledgeable
conference. I would also like to thank Mr. Rajesh
Parab for his valuable support.

3. RENEWABLE ENERGY: DRIVING CONCERNS
To shift to renewable energy resources is need of hour. Global warming is no longer a topic
under discussion in fact it has become the most debatable environmental issue of 21st
century. The concept of depletion and exhaustion of fossil fuel resources is a fundamental
question for the future extraction of coal and oil. To retain these resources, is also very
important.
Although still there are challenges before the whole world like efficient, reliable and low cost
technologies to utilise tidal, geothermal resources. On the same ground, German solar power
plants produced a world record 22 GWs1 of electricity per hour - equal to 20 nuclear power
stations at full capacity - through the midday hours.
In the similar way whole world is ready to set and
break records in the sector. So, on the basis of feasibility study to choose the most suitable
alternative fuels according to energy resources in each country, new projects are coming up.
Considering the potential of India in this field, there exist huge opportunity to invest.
EBTC, an organisation protecting the interest of European companies and guiding European
business in India, organised this conference on Renewable energy sector including policy,
regulation, and technology and finance structure in India. This was valuable effort to give
business market insight to European delegates to enter in India. A few concerns and positive
opportunities, European business leaders may meet while entering in India are as follows.
1
http://www.reuters.com/article/2012/05/26/us-climate-germany-solar-idUSBRE84P0FI20120526

4. Main Concerns while setting up a plant in India are shown below:
India-Set up a Clean Energy plant
Inception of idea (Driving Parameters: Why to Invest??)
Huge potential
Huge Demand-Generation gap
Need of hour: Shift to Renewable Energy Resources
Environmental Issues: Global Warming
Retain Coal and Oil Reserves
Technology selection
Life of plant: Sustainable Technology
Technology: Promoters to convince Investors
Technology: Efficient and Innovative
Finance
Debt: Strong Balance sheet and Cash flow Statement
Technology: Sustainable for life of the Plant
Power Purchase agreements
Evacuation Infrastructure
Erection and Commissioning
Legal Activities: Clearances and Permits
Practical Issues on ground
Land Acquisition
Health, Safety and Environmental Issues:Safe Erection practices
Commercial Operation
Certain power demand and payments
Skilled Man-power for plant operation
Debt Service structure: Payment

5. 1. Inception of idea:
 India has huge potential of renewable energy sources. As per Ministry of New
and Renewable Energy2 potential and installed capacity of India is as follows:
CAPACITY IN MW
TYPE POTENTIAL INSTALLED
WIND 49130 17876
SOLAR 20000 1137
BIO 18000 4021
SMALL HYDRO 15380 3421
GEOTHERMAL 10000
There is focus on Wind and Solar power practices, but plant load factor
for these technologies is 20-30 percent only. So focus should shift towards Geo-
thermal energy resources also, as PLF will be very high in this case. The GSI
(Geological Survey of India) has identified 350 geothermal energy locations in the
country. Hybrid technologies like solar-biomass, wind-solar should also be
promoted to achieve a high plant load factor. Technologies are available, just
insight and investment is suggested.
 The production and consumption gap in India is very high. Total production in
India has reached to 206,526 MW. In December 2011, over 300 million Indian
citizens had no access to electricity. Over one third of India's rural population lacked
electricity, as did 6% of the urban population. So there is huge Demand-supply gap.
One of the reasons is the transmission loss incurred.
 Conventional technologies come up with a lot of environmental wastes and to
retain our coal and oil reserves is the need of hour. So this is the right time to
click the renewable energy sector.
 Government should harmonize policies across all states so that all potential
sites in different states are utilized.
2. Technology Selection:
 New technologies like floating solar panels are introduced in the market; so,
much of land is not required.
 Rooftop solar panels can be utilised in well planned cities like Chandigarh, to
set up an example and then thrive through all cities and villages.
 Gujarat government has planned for rooftop panels for Gandhinagar.
 These Technologies must sustain for full life of the plants.
 These technologies should be selected considering environmental issues. After
25 years when the panels will be disposed, electronic waste like crystalline
silicon should not harm marine life when used as floating solar panels and land.
 Promoters should back the technology to convince investors and lenders.
2
http://www.mnre.gov.in/

6. 3. Finance:
 Investors and lenders always look for strong balance sheet and cash flow
statements seeking confidence.
 Seeking confidence in the project investors and lenders look for technology
that is sustainable for the expected life of the plant and backed by the
promoters.
 Power purchase agreements are important to ensure revenue generation to
pay back the debt. But in case of renewable energy resources where
capacity of plant is not that high and power generation is vulnerable to
weather conditions, it is not easy to follow PPA’s as they can result huge
penalties.
 So Government should come up with the policies to promote hybrid
technology based power plants like solar-wind, solar-biomass, wind-
biomass etc. This will help to improve the plant load factor to improve and
PPA’s can also be followed with certain power generation capacity.
 Under RPO stipulation, state distribution companies (discoms) must
purchase a certain percentage of power from renewable energy resources.
Government of India must enforce discoms to implement RPO stipulation.
 Government should increase budget to strengthen distribution infrastructure
to achieve free-wheeling of power between states and better evacuation
and distribution. This will lead to build confidence in investors and lenders
about the certainty of revenue generation and collection out of the power
project.
4. Erection and Commissioning
Any foreign investor or company will look for the on ground, practical problems
associated with the setting up the plant.
 Legal Clearances: These clearances are must to set up a plant in any area
of the world. One can always find out a particular set of regulations to follow
and steps to get all the clearances. But this becomes a problem when many
players in the market come in and because of the system takes time to
approve.
So to promote these projects government should focus to speed up the
process of clearances and approvals.
 Land acquisition: Landowners are always reluctant to give their land at first.
But through good compensation and Rehabilitation scheme they are
convinced. Sometimes help of Police and Local or State Administration is
also taken to resolve these issues.
So this is also not a big problem.
Government should support at times to speed up the land acquisition or can
create a pool of land for particular Renewable energy power projects to
promote it.

7.  Through “Corporate Social Responsibility” known as CSR, activities can be
done so as to help landowners understand that how these kinds of projects
will help developing them in the future. Under CSR activities unskilled
people can be trained to work in the plant. This way a message with positive
harmony is passed among them.
 Safe erection practices are most important issue. To ensure safety, health
and environmental issues a particular HSE department is deployed. Any
breach in safe practice may cause casualty of any manpower which may
lead to riot kind of situation.
5. Commercial Operation and Evacuation of Power:
 To ascertain power demand a power purchased agreement is required. As
discussed earlier, Power purchase agreements are important to ensure
revenue generation to pay back the debt. But in case of renewable energy
resources where capacity of plant is not that high and power generation is
vulnerable to weather conditions, it is not easy to follow PPA’s as they can
result huge penalties.
 Under RPO stipulation, state distribution companies (discoms) must
purchase a certain percentage of power from renewable energy resources.
Government of India must enforce discoms to implement RPO stipulation.
 Government should increase budget to strengthen distribution infrastructure
to achieve free-wheeling of power between states and better evacuation
and distribution. This will lead to build confidence in investors and lenders
about the certainty of revenue generation and collection of the power
project.
 Government should focus to strengthen infrastructure. For example,
Tamilnadu is having huge capacity and potential but no evacuation
infrastructure to other states. Government should also focus on micro grids
and off grid systems.
 Training of skilled man-power to run the plant based on new technology is
also required.
So, Government better increase the budget towards clean energy projects rather
subsidising crude oil. To support biomass based power generation, government should
direct Municipal corporations to maintain a proper supply chain arrangement or
promote algae production for sustainable supply of raw material to plants to attract
investors for Biomass based energy. This model is working very well in Europe.
Push based mechanism to shift towards
renewable energy seems to be over, now government policies seem to be working on
pull based. There are generation based incentives available in India but government
should also support in plant set-up issues i.e. support in land acquisition process while
setting up the plant.

8. Conclusion:
Indian government has taken a lot of steps to promote green energy on push based
mechanism and pull based mechanism. Achievements of Indian Government till
31/08/2012 are shown in the table3 below. A lot more private investment is invited to
achieve total potential of 103,510 MW from renewable energy resources.
New & Renewable Energy
Cumulative deployment of various Renewable Energy Systems/ Devices in the country as
on 31/08/2012
Renewable Energy Programme/ Systems Target Deployment during Total Cumulative
for Deployment achievement up
2012-13 to 31.08.2012
August, 2012 in 2012-13
I. POWER FROM RENEWABLES:
A. GRID-INTERACTIVE POWER (CAPACITIES IN MW)
Wind Power 2500 92.1 614.5 17967.15
Small Hydro Power 350 12.56 38.76 3434.07
Biomass Power 105 17.5 59.5 1209.6
Bagasse Cogeneration 350 30 124.5 2109.73
Waste to Power -Urban - 4 93.68
-Industrial 20 - - -
Solar Power (SPV) 800 3.5 102.88 1044.16
Total 4125 155.66 944.14 25858.39
B. OFF-GRID/ CAPTIVE POWER (CAPACITIES IN MWEQ)
Waste to Energy -Urban 20 - 4.59. 106.34
-Industrial
Biomass(non-bagasse) Cogeneration 60 2.25 15.9 398.4
Biomass Gasifiers -Rural- 1.5 - 0.128 16.248
Industrial 10 0.86 3.56 137.65
Aero-Genrators/Hybrid systems 0.5 - 0.1 1.74
SPV Systems (>1kW) 30 - 11.4 96.61
Water mills/micro hydel 2.00(500 (33 nos) (68 nos) 2121 Nos.
Nos.)
Total 126 3.11 35.68 756.99
II. REMOTE VILLAGE ELECTRIFICATION
No. of Remote Village/Hamlets provided - - - -
with RE Systems
III. OTHER RENEWABLE ENERGY SYSTEMS
Family Biogas Plants (No. in lakhs) 1.25 - - 45.45
Solar Water Heating - Coll. Areas (Million 0.6 0.1 0.37 5.83
m2)
3
http://www.mnre.gov.in/