India pushes alternative fuels

Posted in India | 05-Oct-06 | Author: Siddharth Srivastava| Source: Asia Times

Siddharth Srivastava is WSN Editor India.

NEW DELHI - Though oil prices have settled down a bit, a serious attempt is being made to push alternative energies, to meet future contingencies. India produced 32 million tons of crude oil and imported nearly 99 million tons, which is nearly 80% of its requirement in 2005-06.

India has scaled up its estimate of power requirements to between 800,000 and 950,000 megawatts by 2030 to achieve the targeted economic growth of more than 8%. The choices China and India make in the next few years will lead the world on a path based on efficient technologies or growing ecological instability, the US-based World Watch Institute in its State of the World 2006 report has said.

Recently, the Indian minister for non-conventional energy sources, Vilas Muttemwar, said in parliament that US and German companies have made investment proposals worth Rs100 billion (US$2.1 billion) in a special economic zone (SEZ) for manufacturing renewable energy devices and systems. "Very soon we will identify the location for setting up the SEZ. We are studying locations in Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra and Chhattisgarh,' the minister said.

Extending support to alternative energy sources, Rural Development Minister Raghuvansh Prasad Singh said India can save Rs95 billion each year from bio-diesel produced from jatropha, an oilseed plant. The National Oilseeds and Vegetable Oils Development (NOVOD) board, the designated agency of the farm ministry to promote biofuel crops, has projected 3.1-million-hectare coverage under jatropha plantation by 2008-09, he said.

NOVOD has estimated that the said acreage would produce about 3 million tons of bio-diesel (at the rate of 0.94 ton per hectare) annually. "This would result in a likely saving of foreign-exchange equivalent to about Rs95 billion,' the minister said.

So as not to hurt the country's agriculture produce, the government has identified 43 million hectares of available cultivable wastelands, of which 32 million hectares would be suitable for jatropha plantation.

Echoing similar sentiments, Agriculture Minister Sharad Pawar has said that India will soon launch a special mission to promote cultivation of non-edible oilseeds as well as other biofuel crops. "This mission would comprise 14 central ministries involved in the promotion of biofuels and state governments,' Pawar said.

Emphasizing the need for making biofuel cultivation economically viable for farmers as an alternative crop, Pawar said the Agriculture Ministry has been playing an active role in including constituting the NOVOD board to undertake research and popularization of non-edible oilseeds such as jatropha and karanja. [1]

Private-sector giant Reliance Industries Ltd has set aside $500 million to set up a bio-diesel-refining plant and earmarked 200 hectares of land at Kakinada in Andhra Pradesh as a pilot project to cultivate jatropha shrubs. The plant is expected to be ready by 2008 near the existing 33-million-ton-per-annum crude-oil refinery at Jamnagar, Gujarat.

In a first, two trains in India have recently started running on bio-diesel derived from jatropha. The two narrow-gauge trains in the state of Chhattisgarh travel 300 kilometers a day.

"The experiment is proving to be a great success, and the engines are working smoother and are jerk-free,' said a railway spokesperson.

And, as an example, chief minister of the central state of Chhattisgarh, Raman Singh, who has set upon the task of growing jatropha with a missionary zeal, became the first head of a state government to use jatropha diesel for his official vehicle. The state government also plans to replace imported diesel with jatropha fuel for all state-owned vehicles by next year.

Another area of focus has been wind energy. The Global Wind Energy Outlook 2006 report, by the Global Wind Energy Council and Greenpeace International, provides an industry blueprint that explains how wind power could supply 34% of the world's electricity by 2050.

Suzlon Energy, a home-grown Indian company, dominates the Indian market and is expanding rapidly abroad, having erected factories in locations as far away as Pipestone, Minnesota, and Tianjin, China. Four-fifths of the orders to Suzlon now come from outside India. Not on the list of the world's top 10 wind-turbine manufacturers as recently as 2002, Suzlon overtook Siemens of Germany last year to become the fifth-largest producer by installed megawatts of capacity.

This year, Pune-based Suzlon acquired for $600 million a Belgian company that makes gears for windmills.

Tulsi Tanti, the chairman of Suzlon Energy, has said that China is a promising market. The $60 million investment that Suzlon is making in its China factory is the first by an Indian company in the Chinese energy sector and one of the largest by any Indian firm in China.

Suzlon Energy has also decided to set up a 100MW farm project near Udupi, Karnataka. The company will spend Rs4 billion of the Rs14.96 billion raised through an initial public offering in September 2005.

Suzlon still trails the market leader, Vestas Wind Systems of Denmark, as well as General Electric, Enercon of Germany and Gamesa Tecnolgica of Spain. However, Suzlon's rapid growth showcases how a company can prosper by tackling the special needs of a developing country.

In the mid-1990s, the wind-energy business was seen as uncertain because of the predominance of fossil fuels. With oil prices, rising this is no longer the case.

India is well positioned to reap the benefits of the wind boom. The country's monsoon winds, particularly the southwest monsoon, which provides 80% of the wind-energy generation potential, contribute to a current annual power production of about 4,300MW from wind projects, standing fourth in the world behind Germany, Spain and the United States.

The Ministry of Non-conventional Energy foresees added capacity of 5,000MW from wind by 2012. India is seen not only as the largest market for wind energy in the Asia-Pacific region, but also as a manufacturing hub for wind turbines and related parts and equipment.

Recently, Vestas announced it was investing Rs5 billion to set up wind farms in Maharashtra. At the outset, it acquired more than 485 hectares of land in Dhule district, with infrastructure development for an installed wind-energy capacity of more than 100MW to commence soon. The company has also acquired land in Sourashtra and Kutch regions of Gujarat, and an investment of more than Rs9 billion is envisaged during 2006-08.

Vestas also plans to establish a research base in Singapore to meet Asia's growing appetite for such energy supplies. The company will invest up to US$322 million over the next 10 years to set up the wind-technology research and development center.

However, much more needs to be done. The Indian government should grant a 10-year exemption of excise and customs duties as well as federal and state levies on bio-diesel or jatropha oil to encourage large-scale corporate plantation and reduce India's massive crude-oil import bill, the Federation of Indian Chambers of Commerce and Industry said recently.

1. Jatropha curcas is a species of plant indignenous to the Carribbean and brought to the subcontinent by Portuguese traders. Karanja belongs to the genus Pongamia.

Siddharth Srivastava is a New Delhi-based journalist.