Energy | February 07, 2012 |
India: Renewable Energy Investment Outpaces Rest of the World
Investment in India's renewable energy is out-pacing the rest of the world, thanks to the improving cost-competitiveness of wind and solar.
Renewable energy investments reached $10.3 billion in 2011, 52 percent higher than the $6.8 billion invested in 2010, the highest growth of any significant economy in the world.
India now accounts for 4 percent of global investment in clean energy.
Policy measures like the India's National Solar Mission and declining prices for wind and solar have made this a record year.
India's National Solar Mission has set a target of producing 10 percent of its energy - 20,000 MW - using solar by 2022, equivalent to 18 nuclear reactors.
India will exceed its Five Year Plan (2007-2012) target, installing 14.2 gigawatts (GW) of renewables compared to its target of 12.4 GW, according to Bloomberg New Energy Finance.
Funding for solar projects has grown seven-fold since 2010, from $0.6 billion in 2010 to $4.2 billion in 2011, almost reaching that for wind at $4.6 billion.
India added 277 MW of solar in 2011, up from 18 MW in 2010, and will add another 500-750 MW this year.
India ranks third in the world for wind capacity after China and the US. It added a record 2,827 MW of wind capacity in 2011, up from 2,140 MW in 2010. An estimated 2,500 - 3,200 MW will be added in 2012, according to Bloomberg New Energy Finance.
Most of the investments are for utility-scale projects at $9.5 billion, but there was also $425 million invested in companies through venture capital and private equity in 2011, more than four times the amount in 2010.
"India's record performance in 2011, and the momentum it is carrying into 2012, is one of the bright spots in the clean energy firmament. With support mechanisms falling away in the US, the ongoing financial crisis in Europe, and China already going flat out, it is gratifying to see some of the world's other major potential markets coming alive." says Michael Liebreich, CEO of Bloomberg New Energy Finance.
"The surge in installation of renewable energy shows that it is becoming cost competitive and scalable. To carry this momentum forward, federal and state governments will have to ensure four things. First, that transmission lines are available for projects; second, that the grid can handle an increased flow of renewable energy; third, that renewable purchase obligations are enforced; and, fourth, that project developers are paid on time for the power they produce," says Ashish Sethia, head of India research at Bloomberg New Energy Finance.
Last month, we reported that solar has become cheaper than diesel for back-up power in India. And the country is using auctions to drive down the price of solar.
Photo by Ho John Lee/flickr/Creative CommonsReprinted with permission from SustainableBusiness.com