Like every year, nations around the world celebrated 5th June as the World Environment Day to stimulate worldwide awareness of environmental issues and encourage political action in line with this year’s theme of ‘Many Species.
One Planet. One Future’, which celebrates the incredible diversity of life on earth.
This day reminds us of the pressing need to undertake more sustainable measures to save our environment while ensuring healthy living for the future generations. With depleting natural resources, nations have begun switching to non-conventional sources to meet their energy needs.
Although the world cannot completely replace the use of fossil fuels like oil, gas and coal among others, which are primarily responsible for environmental damage, they have begun switching to non-conventional energy resources for a cleaner and greener tomorrow.
But a time will come when rising prices of crude oil and natural gas coupled with dwindling supplies will force countries around the world to tap non-conventional sources of energy for power generation as they will not only help the environment but also keep global warming at bay.
Under the Kyoto Protocol agreement signed among the industrialized countries, the nations will have to reduce their collective emissions of greenhouse gases by about 5% compared to the levels of the year 1990.
Countries including the European Union, US, Japan, Russia, Australia and China among other nations have huge pressure to bring down their emissions. Consequently, it is expected that dependence and use of renewable sources of energy will increase manifold in the years to come.
Currently renewable energy accounts for about 5% – 7% (solar energy is not even half a per cent) of the total global power generation capacity, but it holds promise as most resources are yet to be harnessed fully.
Only a fraction of the existing resources such as wind, solar energy and hydraulic energy have been utilized globally. This is also the reason why opportunities are immense in this space.
INDIAN SCENARIO
India’s total installed power generation capacity is 140000 MW at present. This is expected to go up more than three times or almost 422000 MW by the end of 2022. However, capacity addition will be higher in the case of alternative sources of energy.
The total estimated medium-term potential (till year 2032) of power generation from renewable energy sources such as wind, hydro, solar, waste to energy and biomass in the country is about 183000 MW, which is nearly 14 times higher than the current installed capacity from these sources of energy. In non-conventional energy, opportunities are immense, especially in the area of solar energy.
SOLAR POWER
Unlike wind and other sources of alternative energy, solar power has not been tapped fully in India. Solarbased power generation capacity is over 200 MW in India. However, this is only a fraction of India’s potential to harness more than 50000 MW of solar energy.
Nevertheless, the government has begun making efforts to take the present capacity to almost 1000 MW in the year 2012, 7000 MW by 2017 and finally to almost 20000 MW by the end of 2020.
So, in the next one decade, solar-based power generation capacity in India will go up by a whopping 200 times. There is no other industry, which offers such a big opportunity to grow. Considering the immense potential of solar energy, achieving this goal is possible.
For instance, even if we use 1% of the potential of Thar desert in Rajasthan, which measures about 20,000 km, the amount of electricity generated could be almost 6,000 MW, which is fairly large and a doable task.
PROGRESS SO FAR
The progress so far has been very slow given various factors like high capital cost, large land requirements and its availability only during the day. However, things have started moving in the right direction.
Under the prime minister’s renewable energy plan, the government has created a national solar mission, under the national action plan on climate change, which has targeted to increase the share of solar energy in the total energy mix significantly.
It has not just put targets, but also devised plans such as incentivizing tariffs and providing subsidies for several years. Also, a single window clearance has been provided for generation and manufacturing parks, which will help achieve the rapid scale up and bring down overall costs.
Additionally, it has mandated deployment of solar rooftop or onsite applications in government buildings, public sector undertaking buildings, hospitals, hotels, guest houses and nursing homes as well as residential complexes. There are many more things that have been targeted to enhance and take the solar-based power generation capacity to 7000 MW by the end of 2017.
REGULATORY CHANGES
Considering this as a lucrative area, many companies have begun making inroads into this space. Besides, the government has given the opportunity to earn higher returns of nearly 16% on equity investment on such projects as against the 14% earned in case of traditional power projects or those run on fossil fuels.
More recently as capacities are increasing along with the increasing number of players, the cost of building such projects is coming down. For instance, it used to cost Rs 19 crore to build every MW of solar-based power generation capacity, but it has now come down to almost Rs 16-17 crore and is expected to decline further to Rs 13-14 crore over the next two to three years.
This is still high compared to Rs 4.5-5 crore investment required in the case of a coal-based plant. But solar energy has greater payout in the long run considering that the input cost is virtually zero as compared to a thermalbased power plant, which will require coal to burn at growing prices. So in the case of solar-based power plants the supply of input is abundant and cost of raw material is literally zero.
COMPANIES
There are a few listed companies that provide the technology (photovoltaic power systems, etc) required for solar power. Webel SL Energy, Moser Baer, XL Telecom and Euro Multivision are some of the wellknown listed companies in this space.
Websol Energy Systems (formerly Webel SL Energy Systems) is a leading manufacturer of photovoltaic monocrystalline solar cells and modules in India. The company has an integrated production facility at Falta SEZ. The company is increasing its presence and expanding its capacities from the present capacity of 42 MW to 60 MW by May ’11 and finally to 120 MW by the year 2012.
The expansion in capacity will increase the company’s ability to service more customers and make a wider range of products. The company’s turnover has increased to Rs 139 crore in FY09 from Rs 56.63 crore in FY05. During the same period, net profits went up to Rs 10.46 crore from Rs 2.5 crore.
XL Telecom is also a known player in this segment. It has over 18 years experience in manufacturing solar photovoltaic modules and systems. The company is diversified into telecom equipment and energy business.
The company had a sales turnover of Rs 425.70 crore in FY09, where energy accounted for almost 95% of the total revenue. The company has clients in the domestic and international market. Its current production capacity is about 192 MW per annum.
Moser Baer is known for its disc business, but the company has huge plans in the solar energy area through its subsidiary Moser Baer Photo Voltaic. The company’s current production capacity is 80 MW Crystalline Cells, 80 MW Crystalline Modules and 40 MW thin films with huge expansion plans on the radar.
Euro Multivision, which is also into the manufacture of disks, has entered into the solar energy sector having a capacity of about 40 MW. The company is further planning to take its capacity to 180 MW in the future. But compared to others, the company is still small and lacks the necessary experience in this segment.
