Energy in India
- The Indian energy and environment scenario is expected to witness various changes, which would help the sector to become at par with the global stipulations on carbon emissions and sustainability. The launch of Jawaharlal Nehru National Solar Mission (JNNSM)—a joint initiative of the Ministry of New and Renewable Energy (MNRE) and Ministry of Power and the first of its kind in the world—is one of the most important environment-friendly energy solutions available in India.
- mission of greenhouse gases leading to climate changes has become a major concern globally. Under the Kyoto Protocol's terms, industrial country parties will be under obligation to limit their greenhouse gas emissions by 2008-12. India has also signed the treaty and under the protocol, India now focuses to drive a Clean Development Mechanism (CDM) aimed at protecting the environment by reducing carbon emissions.
Power generation and capacity
- India has made remarkable progress in the power sector during the Eleventh Plan. During the Eleventh Plan period the country has added about two-and-a-half times of the capacity that was added during the Tenth Plan period. He said that 80,000 MW capacity is under construction for the Twelfth Plan./li>
- The wind energy sector picked up momentum again by adding over 2800 MW capacity resulting in grid-connected renewable power capacity crossing the 22,000 MW milestone. During 2011, grid-connected solar power plants crossed the 100 MW milestone as well. Further, over 1000 remote villages were electrified through renewable energy systems during this year.
- Wind power is the fastest growing renewable energy sectors in India. A total capacity of 15,880 MW of wind power has been installed in the country. A capacity of around 2827 MW has been installed during 2011.
- FDI inflows from non-conventional energy sources during the period April 2000 to November 2011 were US$ 1.3 billion
- The petroleum and natural gas sector has attracted cumulative FDI worth US$ 3.3 billion from April 2000 to November 2011
- India has been ranked as the third best investment destination in renewable energy sector, next only to China and the US. An investment of about Rs. 4900 crore has been received as FDI equity inflows in the renewable energy sector during the last three years and the current year, till June 2011.
- India's power sector is expected to generate revenue of about Rs 13 lakh crore (US$ 294 billion) during the 12th five year plan (2012-17). Government is looking at revenue estimates of Rs 2.5 lakh crore (US$ 56 billion) from transmission and Rs 4 lakh crore (US$ 91 billion) from distribution in addition to Rs 6.5 lakh crore (US$ 147 billion) from generation.
- India's petroleum refining capacity is expected to rise to 240 million tonnes per annum (MTPA) by March 2012 from the current 188 MTPA, attracting an estimated investment of US$ 13.5 billion – US$ 14.6 billion. This will boost the country's exports of petroleum products.
- Renewable energy contributes around 70 per cent of the total power business in India, as compared to 10 per cent in 2000, in terms of project numbers and dollar value. Renewable energy is central to climate change mitigation efforts. Broad estimates have shown that mitigation from existing renewable energy portfolio is equivalent to around 4-5 per cent of total energy related emissions in the country. Moreover, India has become an attractive destination for CDM projects owing to the vast market potential and well-developed industrial, financing and business infrastructure.
- India had 727 registered CDM projects, which is around 21 per cent of worldwide registered projects. With 520 projects, renewable constitute around 72 per cent Indian CDM registered projects. Within renewable, wind has the maximum number of 225 projects followed by hydro 82 and 6 for solar energy.
Investment Policy Updates
- The Indian government has proposed incentives of up to US$ 0.258 per kilowatt hour for power plants, 10-year tax holidays, electricity tariff exemptions and other preferential tariffs. There are also subsidies for solar power systems and small hydro power projects.
- To promote solar power for off-grid applications for both thermal as well as photovoltaic, the Government is offering financial support through a combination of 30 per cent subsidy and/or 5 per cent interest bearing loans for companies in the business.
- The Union Cabinet has approved the implementation framework of the National Mission for Enhanced Energy Efficiency (NMEEE), which seeks to strengthen the market for energy efficiency by creating conducive regulatory and policy regime. NMEEE has been envisaged to foster innovative and sustainable business models to the energy efficiency sector. The Cabinet approval includes implementation plan of NMEEE, funds to the tune of US$ 5.07 million.
- As per the Ministry of New and Renewable Energy (MNRE) Proposal for 11th Plan for Renewable Energy for Urban, Industrial and Commercial Applications - Subsidy / incentive is valid for only 2.5 million square metre targetted during first two years of the Plan (11th Five Year Plan – 2007-12).
- Following the Central Government's decision to enforce the Energy Conservation Building Code (ECBC) in new buildings to minimise the use of energy and recommendations to the state governments to follow the same with suitable amendments warranted by local circumstances and requirements, the state of Haryana has enforced the provisions of the code. The code is applicable to all buildings and complexes having a connected load of 500 KW and more, or having a contract demand of 600 KVA and more. Buildings not using electricity or fossil fuel and those using energy for manufacturing, are exempt from application of the code.
- FDI up to 100 per cent under the automatic route is permitted for oil and natural gas exploration activities, infrastructure for marketing of petroleum products, petroleum product pipelines and natural gas LNG pipelines
- FDI up to 49 per cent is permitted under the Government route in petroleum refining in the private sector.
- 100 per cent FDI into renewable energy through automatic route has been allowed by the Government.
Investment policies have been initiated to bolster investments through regulated means. These include: