Map of India States and Union Territories

Clean Energy in India. 

Perspectives for Swiss businesses 

and research institutes. 

September 2009 

osec.ch 

MARWAS

Clean Energy in India. 

Title. Clean Energy in India. 

Perspectives for Swiss businesses and research institutes. 

Language. English 

Number of pages. 88 pages 

Publisher. Osec 

Stampfenbachstrasse 85 

P.O. Box 2407, CH-8021 Zurich, Switzerland 

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Author. MARWAS AG 

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Clean Energy in India Perspectives for Swiss businesses and research institutes 

© 2009 Osec. All rights reserved. 

2

Table of contents 



1 Executive summary ............................................................................................ 5 

Part 1: Perspectives 2 Clean energy - a definition ................................................................................. 7 

3 Required technologies and feasible business models ..................................... 11 

Biomass ........................................................................................................... 14 

Solar ................................................................................................................. 16 

Wind ................................................................................................................. 18 

Geothermal ...................................................................................................... 19 

Small hydropower ............................................................................................ 20 

Ocean power .................................................................................................... 21 

Energy efficiency .............................................................................................. 22 

Transportation .................................................................................................. 23 

Architecture & building ..................................................................................... 24 

Research & developoment ............................................................................... 25 

4 Barriers and pitfalls .......................................................................................... 26 

Part 2: Background information 5 Economic profile ............................................................................................... 30 

6 Political structure .............................................................................................. 36 

7 Energy policy and administration ..................................................................... 38 

8 Energy in India ................................................................................................. 44 

9 Clean energy in India: status and potential ...................................................... 53 

Biomass ........................................................................................................... 57 

Solar ................................................................................................................. 60 

Wind ................................................................................................................. 63 

Geothermal ...................................................................................................... 65 

Small hydropower ............................................................................................ 66 

Ocean power .................................................................................................... 68 

Energy efficiency .............................................................................................. 69 

Transportation .................................................................................................. 71 

Architecture & building ..................................................................................... 73 

Research & developoment ............................................................................... 75 

Annex I Exhibitions, fairs and conferences in India ....................................................... 80 

II Useful addresses ............................................................................................. 81 

III Map of India ..................................................................................................... 87 

IV Sources consulted for this study ...................................................................... 88 

3

Executive summary 



4

Chapter 1: Executive summary 

Executive summary 

This study attempts to provide readers with an insight into the market for clean energy 

in India. Its was written with a focus on the interests and needs of Swiss small 

to mid size enterprises as well as research & development institutions. 

We, the authors of this study, firmly believe that clean energy in India bears many 

opportunities for Swiss businesses and researchers. However, in order to seize these 

opportunites one needs to arrive at a balanced evaluation of some of the most relevant 

factors. 

This study is structured in a way that should allow readers to assess if and how they 

may participate in India’s clean energy market. In PART 1 we propose a common 

understanding of the most important technical terms relevant to what is discussed 

in this study, followed by specific perspectives and market opportunities one may expect 

in India. An overview of the barriers and pitfalls one may have to face provides 

an aditional viewpoint. 

PART 2 is a high-level discussion on the one hand of the general economic, political 

and administrative framework in India. On the other hand, it provides detailed background 

information about India’s energy sector as well as the status of and potential 

for 10 sources or types of clean energy. 

Generally, manufacturing clean energy technology products in India perhaps is the 

most appealing way of seizing market opportunities. This may be done if a Swiss 

company sets up its own manufacturing site or, perhaps more convenient and involving 

less investments, by entering license agreements with another company in 

India. This would involve transfer of technology which is another main area of opportunities, 

both commercially and non-commercially. Exporting goods to India, 

however, will be attractive only if the Swiss manufacturer covers a very specific niche 

or offers technology which is unavailable in India or of insufficient quality. The same 

is valid for offering consultancy services to Indian companies. 

What drives India’s market opportunities in the area of clean energy is its sustained 

growth of economic output and thus its dependence on energy. Factories, office 

buildings and public infrastructure require ever more electricity and fuels. Household 

incomes are growing, allowing people to buy more electronic home appliances. 

At the same time, damages to the environment are increasing. 

The government of India has been introducing and implementing new policies and 

measures to better protect the country’s environment and secure sufficient supply of 

energy. Foreign as well as domestic companies and research & development institutions 

are attracted with a set of incentives and a favourable policy framework. 

Zurich, Switzerland, September 2009 



5

Part 1: Perspectives 



6

Chapter 2: Clean energy - a definition 

Clean energy – a definition 

Clean energy is a term which is commonly used to describe sources of energy that 

are expected to be more environmentally friendly and far less polluting than fossil 

fuel-based technologies. On the one hand, technologies for generating clean energy 

use naturally replenished resources such as sunlight, wind, rain, tides, geothermal 

heat and plants. On the other hand, these technologies apply processes to use energy 

more efficiently. 

The term clean energy is often used interchangeably with renewable energy, alternative 

energy, green energy, good energy, clean technologies, etc. The synonymous 

usage of these terms might cause confusion. 

In order to ensure a common understanding throughout this study, clean energy is 

used as the umbrella term for: 

1. Renewable energy 

a) Biomass 

b) Solar power 

c) Wind power 

d) Geothermal power 

e) Hydropower 

f) Ocean power 

In addition, this study discusses the following special areas relevant to clean energy 

and related technologies: 

2. Energy efficiency 

3. Advanced technologies and alternative fuels for transportation 

4. Standards for architecture and building. 

However, the total energy (whether with or without the usage of fossil fuels) to develop, 

manufacture or implement clean energy technology (commonly referred to as 

emobodied energy or grey energy) is not within the scope of this study. 

The sources and processes involved in each of these areas are outlined below. 


a) Biomass 

Biomass is biological material derived from living or recently living organisms. Another 

type of biomass is waste from a city’s municipal waste system, from farms and 

from other agricultural operations, or waste from commercial and industrial operations. 

Biomass can be used directly to generate electricity or to produce heat. It can also 

be processed into fuels. Examples of biomass fuels are liquid and gel fuels such as 

oil and alcohol as well as pelletized biomass for gasification and combustion. Liquid 

fuels derived from biomass can be used as substitutes for or as additives to fossil 

fuels. 



7


Biomass is part of the carbon cycle. Through photosynthesis, carbon from the atmosphere 

is converted into biological matter. When biomass is combusted, carbon 

dioxide (CO 2 ) is emitted into the atmosphere. This may contribute to global warming 

if the plant matter used as a fuel is not fully replaced by planting for new growth. In 

order to ensure a reasonably stable level of atmospheric carbon, the natural carbon 

equilibrium has to be maintained. 


Solar power is generated when light and heat from the sun are converted into useful 

energy. Sunlight can be converted directly into electricity using photovoltaic (PV) 

technology. Photovoltaic panels are typically incorporated into systems that combine 

batteries and electronic control equipment to provide fulltime direct current 

(DC) and/or alternating current (AC) power. Typical applications include lighting, 

electronics, telecommunications and small-scale water pumping. In the indirect conversion, 

concentrating solar power (CSP) most commonly focuses the sun’s energy to 

boil water which is normally used to drive large electric power plants. 

Thermal systems collect and store solar heat for air and water heating applications. 

Solar power systems produce little or no emissions and have minimal impact on the 

environment. 

c) Wind power 

Wind power technology uses wind turbines to convert energy in the wind into electricity 

or to move resources (e.g. water by operating a pump). Wind power is seen 

as the fastest growing segment of the electricity sector globally. It is comparatively 

cheap, its projects can be developed and installed in short time, and governments 

provide favourable policies. 

Large wind power generating plants can either be installed onshore on plain land, 

hills and mountains exposed to strong winds. Or they can be put up offshore where 

turbines are installed in the shallow waters of coastal areas. Usually, wind farms 

supplement or replace grid power on farms and other commercial or industrial sites. 

Small wind turbines may be used for household, water pumping or village power 

applications. 

Wind power consumes no fuel and causes no air pollution. While environmental lobby 

groups say that wind turbines pose a potential danger to birds and bats promoters 

of wind power argue that the such damage would be negligible if ever proven. 


Geothermal power is power extracted from heat stored in the earth. The underground 

sources include steam, hot water and heat stored in rock formations. 

A variety of technologies is used to generate electricity from geothermal resources, 

such as dry steam power plants, flash steam plants and binary-cycle plants. While 

dry steam power plants and flash steam plants release small amounts of gases and 

steam into the atmosphere, binary-cylce plants emit no gases. 



8


e) Hydropower 

Electricity is generated through hydropower by using the gravitational force of falling 

or flowing water, driving a water turbine and generator. 

The most commonly used systems for hydropower are pumped storage hydroelectricity 

plants, run-of-the-river plants and tidal power plants. While these systems are 

applied at large power plants, small hydropower plants with capacities ranging from 

a few kilowatts to several megawatts are typically diversion systems. 

Once a hydroelectric power plant is constructed, the project produces no direct waste 

and has a low output level of greenhouse gases. However, hydroelectric plants may 

disrupt surrounding aquatic ecosystems, both upstream and downstream. Although 

the natural hydrological cycle replenishes the resource, it also makes it vulnerable to 

droughts. Also, the reservoirs of power plants in tropical regions may produce large 

amounts of greenhouse gases due to decaying plant material in flooded areas. 


Ocean power technology makes use of kinetic energy in the ocean to generate electricity 

or to desalinate water. It is not required to build dams. The technology involved 

in such processes is still in the development phase. 

Some systems use either the vertical motion of waves or the horizontal motion of 

ocean currents, converting the energy in moving water into electricity. Other systems 

use temperature differences at different levels of the ocean to generate electricity. 

A by-product of ocean thermal energy systems is cold water, which can be used 

in cooling systems of buildings, in agriculture and in fisheries. 

Ocean power systems can negatively influence migration patterns in ocean species 

and cause other environmentally troubling consequences. Systems employing barrages 

can cause silt buildup that affects tidewater and coastal ecosystems. 


Energy efficiency means using less energy to provide the same level of useful energy. 

It is achieved primarily by using more efficient technologies or processes that 

provide equivalent or better energy service using less energy. The value of the saved 

energy typically covers the cost of deploying the new technologies and processes. 

The combination of energy efficiency and renewable energy are considered to be the 

key elements of a government’s or other organisation’s sustainable energy policy. 

If the growth of energy demand is not reduced and coordinated with the supply of 

renewable energy, more fossil fuel capacity would be required to meet the growth. 

A combined policy, however, takes advantage of the temporal synergy of the two 

approaches: Energy efficiency programmess can meet shorter term goals because 

efficiency measures can be implemented quickly and at relatively low cost. Energy 

from renewable resources helps meeting longer term goals. 

Many energy service providers apply load management to balance the volume and 

time of electricity supplied on the network with the electrical load. However, de- 



9


mand-side management (DSM) uses both, load management and energy efficiency 

to save the amount of energy required to deliver the energy service. It attempts to 

change energy consumption patterns in order to reduce the need for new energy 

generation capacity. 


Advanced transportation technologies include electric vehicles, hybrid electric vehicles, 

mobile idle reduction systems and diesel retrofits. Alternative fuels for transportation 

include biodiesel, ethanol, natural gas and propane. 

4. Standards for architecture and building 

When designing, building and operating homes, factories, storages, offices or other 

types of buildings the impact on the natural environment and human health can 

be reduced by applying certain standards. Simultaneously, a building’s energy efficiency 

can be improved. 

Among the terms used for buildings that meet such standards are “sustainable 

building” and “green building”. Although these and other terms are often used interchangeably, 

the commonly shared opinion is that the following criteria must apply 

to a building in order to meet generally accepted standards: 

During site selection and site planning 

- Conservation and efficient usage of resources such as energy, water, materials, 

etc. 

- Protection of the occupants’ health, improving wellbeing and employee productivity 

During building planning and construction 

- Conservation and efficient usage of resources such as energy (end use, embodied 

and construction, renewable), water (recycle, recharge, and reuse of water), materials, 

etc. 

- Reduction of waste, pollution and environmental degradation 

- Protection of the occupants’ health, improving wellbeing and employee productivity 

During operation and maintenance 

- Energy audit and validation 

- Innovation 



10

Chapter 3: Required technologies and feasible business models 

Required technologies and feasible business models 

Introduction 

It is an uncontested conventional wisdom that India needs much more energy than 

it has today. And it will require even more in the decades to come. The country’s 

geographic expansion is huge, its population large and its economic output growing 

at a scale which has the potential to raise envy in the more industrialised countries 

in the western part of the world. 

If India is to achieve a sustained annual growth rate of 8 per cent of its gross domestic 

product (GDP), it will have to expand its primary energy supply by at least three 

to four times and its electricity supply by five to seven times of its current consumption. 

1 Already this illustrates that India bears numerous opportunities for businesses 

and research and development institutes. 

What makes India even more attractive is that the Government 

of India wants 10 per cent of its power to be 

generated from renewable resources by the year 2012. 

If achieved, this would mean that the market for renewable 

energy generation would grow to seven times 

of its size today, requiring suitable technologies and 

processes. 

In spite of the many opportunities one is well advised 

not to be too impressed by size and numbers. India has 

a set of its own problems which may or may not pose 

hurdles for foreign companies. It is commonly known 

that widespread poverty, poor rate of literacy and a malfunctioning 

infrastructure have an impact on the country’s 

social and economic development that must not 

be ignored. But there are further limiting factors which 

foreign companies have to face. For example, public 

tenders are often intransparent and leave foreign bidders 

with small chances to win a contract. Also, Indian 

businesses are quite price sensitive and add pressure 

on the foreign vendor’s profit margin. And, in the case 

of transfer or technology, prevailing case law in India 

tends to favour the Indian party over the foreign one. 

TABLE 3.1: Energy supply-demand gap 

Year 

Total required 

energy 

(billion kWh) 

Projected peak 

demand (GW) 

Required installed 

capacity 

(GW) 

At an average gross domestic product (GDP) growth rate of 8% 

2011 - 12 1,097 158 220 

2016 - 17 1,524 226 306 

2021 - 22 2,118 323 425 

2026 - 27 2,866 437 575 

2031 - 32 3,880 592 778 

Source: India Brand Equity Foundation, India, 2008 

1 U.S. Department of Commerce, International Trade Administration, “Clean Energy: An Exporter’s Guide to India”, USA, 2008 



Key market drivers 

Supply-demand gap 

- Companies of any size and sector have to rely on back-up generators 

or captive energy generation which are usually operated using fossil 

fuels. But these fall-back installations are expensive. Small companies 

that cannot afford captive generation often go without power. They suffer 

from high costs due to idle times of their staff and damages to their 

machinery, raw materials and products. 

- 44 per cent of households in Indian towns and cities and 66 per cent in 

rural areas have no electricity at all. 

Poor transmission and distribution 

- Networks are overloaded, they underperform and loose electricity mainly 

because there have been far too little investments in transmission and 

distribution. 

- 75 per cent of the technical losses and almost all of the commercial 

losses occur at distribution. 

- According to calculations by the Government of India, the country could 

save around USD 172 million (approx. CHF 182 million) if these losses 

could be reduced by only 1 per cent. 

Commercial losses 

- Only 70 per cent of all generated electricity is billed because metering is 

either incorrect or absent. 

- Only 66 per cent of billed electricity is paid for because of lax accounting, 

poor enforcement and corruption in public administration. 

- Because of a governmental initiative to relieve rural areas from the effects 

of rising consumer prices and losses of crop, those farmers who 

manage to buy electrical machinery (e.g. pumps for irrigation) are supplied 

with free or highly subsidised electricity that is often unmetered. 

- Many private households receive electricity below cost or sometimes 

without being metered. 

- Commercial consumers are charged tariffs far above the cost of supply 

and about ten times greater than agricultural tariffs, which reduces the 

competitiveness of their business. 

Sectoral development 

- Since the government has been paying more attention to clean energy, 

the number of local businesses and research & development institutes is 

on the rise. 

- Local capacities and capabilities have developed but not yet saturated 

the market. 

Public awareness 

- More and more members of the Indian civil society are becoming aware 

of environmental, social and health concerns over fossil fuel development 

and are demanding that clean energy be supplied. 

11


It should be noted here that transfer of technology (or 

TOT as it is commonly referred to in India) is not just 

a buzz word. From an Indian perspective it is perhaps 

the most favoured model of co-operation with foreign 

companies and research & development institutes. For 

obvious reasons: Technology which is transferred to 

India becomes a commercially exploitable indigenous 

resource. As such, it can contribute much more value to 

the national economy than imported goods or services 

availed from companies without a set up in India. This 

is why in the following sub chapters this specific model 

of co-operation will recurringly be suggested as a strategy 

for Swiss small to mid-size enterprises to access the 

Indian clean energy market. 

Transferring technology out of its country of origin is 

rarely a trivial idea, and Swiss companies in particular 

have shown little interest in doing so in the past. 

However, one of this study’s key messages is that many Swiss companies which have 

invested in the research and development of clean energy technology may face a 

much bigger market in India if they can find a model which is compatible with their 

organisation’s policy yet business-minded enough to seize an opportunity. 

Key chapter 

This chapter points out where and how Swiss businesses and research institutes could 

develop trade and co-operation in India’s clean energy sector. It keeps opportunities 

as well as limitations in view, lists technologies and areas of know-how that are in 

demand, and outlines which incentives are offered by the Indian government. 

This chapter is structured according to the definitions provided in CHAPTER 2: 

CLEAN ENERGY - A DEFINITION: 


a) Biomass 


c) Wind power 


e) Hydropower 




4. Standards for architecture and building. 



Key policy drivers 

For each of these areas of clean energy, readers will find an individual sub chapter. In 

these sub chapters four tables display in an easily accesible format if, how and where 

one may find an opportunity in the Indian market: 

The risk that green house gas emissions will increase rapidly if no alternative 

sources and technologies to generate energy are found prompted the 

Government of India to provide a long-term policy perspective. CHAPTER 

7: ENERGY POLICY AND ADMINISTRATION provides details about the 

government’s Integrated Energy Policy. 

The Electricity Act of 2003 allows trading in power and provides for further 

deregulation. The electricity industry was restructured: the vertically integrated 

electricity supply utilities in each state of India are now unbundled 

into a transmission utility, and a number of generation and distribution 

utilities. Consumers with a load greater than 1 MW are free to buy electricity 

from any generator, which has created open access to the transmission 

system. Each state’s Regulatory Commission is required to specify 

the minimum percentage of electricity that every distribution utility must 

source from renewable energy sources. And, not least, electricity has to 

be supplied to all rural and urban areas. 

The Energy Conservation Act of 2001 requires large energy consumers 

to adhere to energy consumption norms. New buildings have to follow the 

Energy Conservation Building Code (which falls under the Energy Conservation 

Act of 2003), and appliances need to meet energy performance 

standards and display energy consumption labels. 

12


- Opportunities - the technology perspective 

- Opportunities - business and co-operation models 

- Opportunities - the incentives perspective 

- Opportunities - the geographic perspective. 

The business and co-operation models considered for this study are: 

- Exporting products and equipment to India 

- Importing products and equipment from India 

- Setting up a sales and marketing company in India 

- Assigning one or more distribution partners in India 

- Manufacturing products and equipment in India (including strategic partnership 

models such as joint ventures) 

- Project business (e.g. architecture for green building; power generation, transmission, 

distribution) 

- Commercial transfer of technology (e.g. selling licenses to Indian manufacturers; 

R&D collaboration with Indian companies) 

- Non-commercial transfer of technology (R&D collaboration with Indian institutes, 

with the potential of transferring know-how in both directions) 

- Consulting services 

- Combinations of these models. 

These business and co-operation models are evaluated in terms of their attractivity 

and feasability. 



13


Biomass 

TABLE 3.2: Opportunities - the technology perspective 

General 

- Critical control equipment (e.g. pollution control systems) 

- High efficiency turbines 

Biomass 

- Development of megawatt-scale fluidized bed biomass gasifiers, hot 

gas clean-up systems and optimum integration of systems in accordance 

with Integrated Gasification Combined Cycle (IGCC) standards 

- Development of poly-generation facilities for the production of liquid 

fuels, chemicals and hydrogen 

- Establishing concepts for biorefineries 

- Raising efficiency of atmospheric gasification to 25 - 30% along with 

cooling systems, complete tar decomposition and safe disposal of 

wastes in commercial production 

- Raising systems efficiency of small (up to 1 MW) combustion and 

turbine technologies to 20% or more 

- Design and development of high-rate anaerobic co-digestion systems 

for the production of biogas or synthetic gas 

- Development of gasifier systems based on charcoal or pyrolyzed 

biomass 

- Development of efficient kilns or systems for charcoal production/pyrolyzation 

of biomass 

- Design and development of engines, stirling engines and micro-turbines 

for biogas, producer gas, biosyngas 

- Design and development of direct gas-fired absorptive chillers, driers, 

stoves etc. 

- Improvement in biomass furnaces, boilers etc. 

- Modifications of engines for using more than 20% biodiesel as a 

blend with diesel 

- Development of second generation bioliquid fuels 

- Methods for sustaining biogas production during winter months 

- Development of biogas micro-turbines and engines 

- Local power grids compatible with dual fuel engines and gas engines 

and turbines 

- Removal of hydrogen sulfide from biogas produced in night soilbased 

biogas plants 

- Additional treatment methods for effluent from night soil-based 

biogas plants 

Waste-to-energy 

- Design, engineering and equipment for large-scale projects, including 

technologies for biomethanation, combustion, incineration, pyrolysis, 

gasification, landfill gas recovery, densification, pelletization 

Already existing or available 

- Capability for manufacturing equipment and machinery to establish 

and operate biomass projects 

- Experience and technology in atmospheric gasifiers 

- Technological combinations such as condensing, single extraction 

condensing, double extraction condensing, back pressure, including 

after sales services 

- Biomass research centres 

- Gasifier research centres 



TABLE 3.3: Opportunities - business and co-operation models 

Model Rating Comments 

Biomass and waste-to-energy 

Export products and 

equipment to India 

Import products and 

equipment from thirdparty 

vendors in India 

Set up a sales and 

marketing company 

in India 

Assign one or more 

distribution partners 


Manufacture products 

and equipment in 

India 

Develop and execute 

projects 

Transfer technology 

commercially 


non-commercially 

Offer consulting 

services 

+ - High-tech niche products with little 

competition and/or reasonable price 

points may find a market in India 

+ - Sourcing of low-cost (and mid range 

technology) products for integration 

in Switzerland 

+ - High-tech products for niche or mass 

markets, if high sales turnover can 

be achieved 

- Consider strategic partnership models, 

such as joint ventures 




- High-tech products for niche or mass 


be achieved 



+++ - Will allow supplying high-tech products 

at locally accepted price points 



++ - Will allow procurement of domestic 

products in order to meet price 

sensitivity 

- If sufficient business can be generated, 

the establishment of a company 

in India might be perceived as more 

appealing to clients in India 

+++ - Consider selling licenses to Indian 

manufacturers or system integrators 

- Consider R&D collaboration with 

Indian companies 

- Can help overcome the hurdle of not 

being a domestic market player 

+++ - Consider joint R&D with Indian R&D 

institutes 



- Consider the benefits of transferring 

know-how in both directions 

- - Unlikely to be seen as an added 

value in India 

Waste-to-energy only 


services 

++ - If high level of competence based on 

multiple years of experience can be 

offered to municipalities 

14


TABLE 3.4: Opportunities - the incentives perspective 

Incentives common to all clean energy technologies 

- Customs duty for projects under 50 MW is fixed at 20% according to 

value (ad valorem) 

- Central sales tax exemption 

- Minimum purchase rates of USD 0.057 (approx. CHF 0.06) per unit 

of electricity 

Incentives specific to biomass 

Central level 

- 10.75% subsidy on interest rates to biomass projects (off-grid and 

grid-interactive) 

- 11.25% subsidy on interest rates to bagasse projects 

- Capital subsidies to bagasse-based cogeneration projects if developed 

in co-operation with public sector sugar mills 

- 80% depreciation allowed on equipment in the first year 

- Tax breaks for 5 years (30% exemption for projects with a power 

purchase agreement) 

State level 

- Buy-back tariffs for bagasse implemented in the states of Andhra 

Pradesh, Chhattisgarh, Gujarat, Haryana, Karnataka, Kerala, Madhya 

Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttar 

Pradesh 

- Additional fiscal and financial incentives provided by certain state 

governments 

- Public private partnerships encouraged through further incentives 

Incentives specific to waste-to-energy 

Central level 

- Subsidy in the range of INR 15 million to INR 30 million 

(CHF 330,000 to 660,000) per generated MW 

- Subsidy of up to 50% of the capital cost to compost plants 

- At least 50% of grants provided to urban local governments (in India 

commonly known as urban local bodies) have to be utilized to support 

the cost of collection, segregation and transportation of waste 

State level 


governments 




TABLE 3.5: Opportunities - the geographic perspective 

Biomass 

- Installed capacity with potential for expansion are mainly in the states 

of Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu, Uttar 

Pradesh 

- Additional potential is mainly in the states of Assam, Bihar, Chhattisgarh, 

Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, 

Madhya Pradesh, Punjab, Rajasthan, West Bengal 

- Main potential in sugar production is in the states of Andhra Pradesh, 

Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Punjab, Tamil 

Nadu, Uttar Pradesh 

- Biodiesel production promoted particularly in the states of Andhra 

Pradesh, Chhattisgarh, Gujarat, Tamil Nadu 


- Projected potential is mainly in the states of Andhra Pradesh, Gujarat, 

Haryana, Karnataka, Maharashtra, Tamil Nadu, Uttar Pradesh, 

West Bengal 

15


Solar 


General 

- Cost-effective technologies 

- Solar-powered equipment and applications to become mandatory in 

all government buildings 

Solar thermal 

- Technology for high temperature power generation systems 

- Integration of solar thermal technology in energy efficient buildings 

- Evacuated tube collectors (ETC) 

- Solar Cities planned in 60 locations with a population of 500,000 to 5 

million 

- Solar parks planned in various states 

Photovoltaic 

- Technology for megawatt-scale power generation 

- Grid-interactive power plants 

- Deployment of mini and smart grids 

- Thin film solar cell technology 

- Polysilicon technology 

- Semiconductor technology 

- Improvements in crystalline silicon solar cell or module technology 

- Integration of photovoltaic technology in energy efficient buildings 

- Innovation and improvement in quality, reliability and efficiencies in 

the balance-of-system 

- Base stations and backup power systems for telecommunication 

operators 

- Roof-based captive systems for individual industries 

- Solar lanterns mainly for public lighting (e.g. streets, highways, traffic 

lights, billboards) 

- Standalone home lighting systems 

- Irrigation pumps 

- Wafer manufacturing 

- Installations working in conjunction with wind energy installations 

- Railways, telecommunication companies, military and government 

organizations largest consumers of photovoltaic energy 


- India is the world’s 7 th biggest producer of solar photovoltaic cells, 

and the 2 nd largest manufacturer of photovoltaic panels based on 

crystalline solar cells 

- Huge reserves of high quality silica in the states of Orissa and Andhra 

Pradesh 

- Manufacturing facilities for equipment and components used in solar 

photovoltaic technology 

- Solar thermal applications developed in India (including water and 

air heating, cooking, drying of agricultural and food products, water 

purification, detoxification of wastes, cooling and refrigeration, heat 

for industrial processes, electric power generation) 





Solar thermal and photovoltaic 
















projects 


commercially 




services 









be achieved 








be achieved 









sensitivity 












institutes 







16









Incentives specific to solar thermal 

Central level 

- Subsidy of up to 20% of capital expenditure during first 10 years for 

projects located in special economic zones (SEZ) 


projects located outside of special economic zones (SEZ) 

- Feed-in tariff: up to INR 12 (approx. CHF 0.22) per KWh 

- Accelerated depreciation up to 80% 

State level 


governments 

- Feed-in tariffs in certain states 


Incentives specific to photovoltaic 

Central level 

- Funds available for companies that offer loans for the purchase of 

photovoltaic systems 


projects located in special economic zones (SEZ) 


projects located outside of special economic zones (SEZ) 

- Feed-in tariff: up to INR 12 per KWh 

- Accelerated depreciation up to 80% 

State level 

- Subsidies available for water pumping projects 


governments 

- Feed-in tariffs in certain states 





Solar thermal 

- Across India 

Photovoltaic 


17


Wind 


Wind 

- Technologies with generating capacities in the range of greater than 

1 - 2 MW 

- Wind machines for low-wind regimes 

- Better designed rotor blades, gear boxes and control systems 


- Wind electric generators with up to 1,650 kW (with the involvement 

of foreign companies in joint ventures or as subsidiaries, the most 

common business model being licensing) 

- Wind turbine manufacturers, also investing in further research & 

development 








Incentives specific to wind 

Central level 

- Loans for setting up wind power projects 

- Subsidies of 10.25% to interest rates on loans 

- Income tax holidays for 10 years for wind power generation projects 

- 80% accelerated depreciation on newly procured equipment during 

the first year 

- Concessional custom duty on specified items (e.g. custom duty for 

the import of permanent magnets decreased from 7.5% to 5%) 

- Excise duty exemption 

- Sales tax exemption 

- Liberalized foreign investment procedures 

State level 

- Buy-back tariffs offered by certain states 





Wind 
















projects 


commercially 




services 









be achieved 








be achieved 









sensitivity 












institutes 








Wind 

- Predominantly in coastal areas in the states of Andhra Pradesh, 

Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, 

Rajasthan, Tamil Nadu, West Bengal 

18


Geothermal 


Geothermal 

- A need to assess the potential of geothermal resources 

- Project development to harness geothermal energy 

- Equipment to harness geothermal energy (space heating, greenhouse 

cultivation, cooking) 

- 350 potential geothermal energy locations identified in the country 


- No noteworthy production or supply of equipment to harness geothermal 

energy 








Incentives specific to geothermal 

Central level 

- Financial assistance for meeting up to 90% of project costs 

- Financial assistance for maintenance up to 10 years 





Geothermal 
















projects 


commercially 




services 









be achieved 








be achieved 









sensitivity 












institutes 





+ - If high level of competence based on 




Geothermal 

- Mainly in the states of Chhattisgarh, Gujarat, Himachal Pradesh, 

Jammu & Kashmir, Jharkhand, Punjab, Uttarakhand 

19


Small hydropower 



- Improvements to focus on projects with maximised capacity utilisation, 

low cost (equipment, generation, maintenance) and system 

reliability 

- Improvement and standardisation of civil design and hydraulic structures 

to reduce construction time 

- Compact equipment which requires laying few cofferdams only 

- Concepts and technologies which can be installed and operated in 

difficult and ecologically fragile regions such as the Himalayas 

- Solutions for transmission of energy from off-grid power plants to 

load centres 

- Adaptation of high-pole permanent magnet excitation generators 

- Direct-drive low speed generators for low heads 

- Optimal use of low and variable head sites 

- Projects for flexible small hydropower turbines for very low head 

(< 2.5 metres) 

- Submersible turbo generators 

- Turbine designs suitable to electrical output below 1 MW 

- Standardised control and monitoring hardware packages 


- Capacity for design, construction and operation 

- Electronic governors and digital systems 

- Automization from start to grid synchronisation 








Incentives specific to small hydropower 

Central level 

- Subsidy of 10.75% on interest rates for loans 

State level 

- Public private partnerships supported in certain states for setting up 

commercial small hydropower projects, including wheeling of power, 

banking, buy-back tariffs and quotas 





















projects 


commercially 




services 









be achieved 








be achieved 









sensitivity 












institutes 









- Predominantly in the states of Andhra Pradesh, Arunachal Pradesh, 

Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Madhya 

Pradesh, Maharashtra, Tamil Nadu, Uttarakhand, Uttar Pradesh 

20


Ocean power 


Ocean power 

- Assessment of full potential to generate energy from the ocean’s 

movement or temperature 

- Project development for harnessing ocean power 

- Equipment for harnessing ocean power 


- No specialised equipment supplier known 








- Financial assistance for up to 90% of project costs and for comprehensive 

maintenance for periods up to 10 years 





Ocean power 
















projects 


commercially 




services 









be achieved 








be achieved 









sensitivity 












institutes 








Ocean power 

- Predominantly in the Ganges River’s delta in the Sunderbans region 

in the state of West Bengal as well as in the Gulf of Kuchch and Gulf 

of Khambhat, both in the state of Gujarat 

21


Energy efficiency 



- High-efficiency, low-emission coal thermal electric power generation 

- Reductions in losses in electricity distribution (e.g. employing supercritical 

steam parameters) 

- Industries with a particular need: aluminium; automobile; cement; 

chemicals; coal mining; fertilizers; furnaces; heating, ventilating and 

air conditioning (HVAC); pulp and paper; petrochemicals; steel, 

textile 

- Equipment for architecture & building 

- Railways: methods to conserve energy and regulate consumption of 

power 

- Reduction of initial cost of EFF1 motors 

- Provision of energy efficiency-related services on a performance 

contracting basis, instead of the traditional fee for service model 

(energy service companies, ESCOs) 


- Equipment available, but at insufficient scale and sophistication 








Incentives specific to energy efficiency 

- Financial assistance for investments and research & development 























projects 


commercially 




services 









be achieved 








be achieved 









sensitivity 












institutes 










- Across India: agricultural demand-side management systems 

- Across India: municipal demand-side management systems 

- Across India: energy efficiency in architecture & building 

- Thanks to early policy implementation predominantly in the states 

of Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Tamil Nadu, 

Delhi 

22


Transportation 



- Advanced batteries (particularly in terms of operations range performance, 

durability) 

- Super capacitors and components for electric vehicles 

- Hybrid vehicles (fuel cell and battery) 

- Electric vehicles 

- Production, storage and transportation of hydrogen fuel 

- Use of alternative fuels such as biodiesel, ethanol, compressed 

natural gas (CNG), propane, liquified petroleum gas (LPG) 

- Mobile idle reduction systems 

- Diesel engine retrofits 

- New diesel motors 

- Clean fuel two-wheelers 

- Monitoring fuel efficiency standards 


- Many companies with the capability to manufacture the entire range 

of auto components (e.g. engine parts, drive, transmission parts, 

suspension and braking parts, electrical parts, body and chassis 

parts, equipment etc.) 








Incentives specific to transportation 

- Support for research, development and demonstration projects at 

different institutions and industries 





















projects 


commercially 




services 












be achieved 








be achieved 









sensitivity 












institutes 








23


Architecture & building 



General 

- Building envelope 

- Lighting 

- Thermal performance of walls, roofs and windows 

- Heating, ventilating and air-conditioning (HVAC) 

- Electrical systems 

- Water heating and pumping 

- Solar thermal (high temperature) power generation and energy efficiency 

Materials 

- Fly ash-based blocks 

- Recycled flooring tiles 

- Carpets certified by the Carpet and Rug Institute 

- Recycled materials 

- Paints of low volatile organic compounds (VOC) 

- Recycled particle & gypsum boards 

- Recycled aluminum works 

- Wood certified by the Forest Stewardship Council (FSC) 

- Energy efficient windows 

- High performance glazing & glass 

- High albedo roofing paints 

- Eco-friendly modular materials 

- Bamboo products 

Equipment 

- High efficiency chillers based on hybrid fiber coax (HFC) 

- Variable frequency drives 

- Automation systems for buildings 

- Solar photovoltaic 

- High efficiency light sources 

- Waterless urinals 

- Composting toilets 

- Living machines 


- Materials and equipment available in India, but not in sufficient numbers 

or volume 








Incentives specific to architecture & building 

- Financial assistance for investments and research & development 























projects 


commercially 




services 












be achieved 








be achieved 









sensitivity 












institutes 








24


Research & development 



General 

- Compact fluorescent lighting (CFL) 

- R&D oriented towards specific goals 

- Improvement of available technologies 

- Ultra super critical technologies (material development to withstand 

high pressure, high temperature, oxidation, erosion and corrosion 

for steam generator tubes, main steam piping and high pressure 

turbines) 

- Heat transfer, pressure drop, flow stability at ultra super critical conditions 

- Energy storage systems 

- Energy efficient buildings, building components, appliances 

- Facility to manufacture polysilicon for producing single crystals of 

silicon 

- Light emitting diodes (LEDs) 

- Electric vehicles (EVs) and hybrid electric vehicles (HEVs) 

- Photovoltaic technology 

Fuels 

- Biomass gasification and combustion 

- Cultivation, harvesting and primary processing, including next generation 

bio fuels 

- Production, storage, transportation, delivery, utilization of hydrogen 

- Hydrogen fuel cells 

- In-situ gasification of coal and lignite, coal-to-oil conversion, coal bed 

methane, carbon capture and storage 

- Gas hydrates, oil shale 

- New materials in general 

Special areas 

- Promote available energy technologies in rural areas 

- Technology specifically for small to mid size enterprises 

- Energy specifically for Indian Railways 


- Wide array of R&D activities in the field of clean energy technology 








Incentives specific to research & development 

- General budget for promotion of research, development and demonstration 

projects 

- Subsidy for the purchase of battery-operated vehicles (BOVs) 

- Financial support up to 50% for in-house R&D projects in private 

companies 

- Financial support up to 50% for in-house R&D projects in consortiums 

of private companies, academic institutions and research 

laboratories or institutions 

- Financial support up to 50% for R&D projects commissioned to private 

or public institutions by private companies through the Ministry 

of New and Renewable Energy (MNRE) 

- Financial support up to 100% for R&D projects from universities or 

government research institutions 

- Right to commercialise R&D outcome if private company and/or R&D 

institution had contributed at least 50% of R&D cost 








- Not applicable 




- Not applicable 











projects 


commercially 




services 

+ - May make sense for Swiss companies 

with own patents or other intellectual 

property 

- - Unlikely to be a commercially attractive 

model 

- Distribution partners unlikely to meet 

requirements for negotiations with 

end clients 

- - Not applicable 

- - Not applicable 







+++ - Consider joint R&D with Indian institutes 



++ - If consulting involves specific assignments 

for R&D 




25

Chapter 4: Barriers and pitfalls 

Barriers and pitfalls 

When doing business with India, Swiss companies may face certain barriers. India 

continues to be a protected market if one compares its structure for import duties 

and tariffs with those in other Asian countries, such as the members of the Association 

of Southeast Asian Nations (ASEAN). Depending on which goods are being 

imported to India, customs duties can be as high as between 24 and 40 per cent. 

Although the Government of India has set a concessional rate of 20 per cent for the 

import of clean energy equipment, but it is recommended to check if a specific item 

falls under this rule. 

As it would go beyond the scope of this study to list all barriers, this chapter addresses 

only those which are specific to clean energy and related technologies. 

Complexity 

Perhaps the biggest barrier for Swiss companies interested in doing business in the 

area of clean energy technologies in India has to do with domestic suppliers there. A 

considerable number of local manufacturers, distributors and service providers offer 

a broad variety of equipment, installation and maintenance. The equipments are 

mainly for small hydropower, wind and solar energy. Domestic competition tends to 

challenge any foreign market entrant’s ability to cope with comparatively low prices 

and high market complexity. Quite obviously, locally manufactured technologies will 

be cheaper than imported ones from Switzerland, whether at poorer or equal quality. 

Moreover, India cannot be seen as a single, monolithic market. It consists of a multitude 

of markets, with written and unwritten rules of conduct which may differ from 

state to state, or region to region. For example, the supply of solar lanterns tends to 

be organised in a decentralised way in north India. In the south these items are supplied 

by fewer outlets that are organised centrally, but keeping a bigger stock. 

Policy barriers 

By disentangling the dense network of roles and responsibilities at the central and 

state level, the Government of India has taken steps to decrease the high degree of 

complexity. It has issued or announced new laws to ease the implementation of more 

clean energy technology. However, these initiatives only add to the complexity. Similar 

to Switzerland, India is a federation of widely autonomous states. Legislation, 

interpretation of laws, governance and performance vary from state to state. Some 

states aim at implementing the Electricity Act of 2003 by promoting as many sources 

and technologies for generating energy as possible. Other states only promote certain 

sources and technologies. 

As a result, there tends to be a lack of coordination between ministries and other 

governmental organisations. Rules and regulations are often unclear and inconsistent 

with India’s declaration to pursue an integrated energy policy. Subsidies are different 

from state to state and case to case, and feed-in tariffs are uneven. This makes 

it sometimes difficult to understand what is exactly applicable in a given case. Even 

though the legal and regulatory environment would be clear, one has to face delays 

when applying for permissions or registering projects. 



26


It is not mandatory to meet the targets set by the Indian government for giving clean 

energy technologies a larger share in the overall energy mix. The targets are neither 

enforceable nor do they provide for a penalty system in cases where they are not 

met. Thus, Indian companies and private households are not pressed by the legal or 

regulatory framework to introduce clean energy technologies. 

However, it may be assumed that the increasing damages to the environment will 

heighten the pressure on the government to enforce existing policies and, if necessary, 

introduce new ones. 

Investment barriers 

The intermittent nature of how clean energy can be generated, and the high ratio of 

initial capital costs to operating costs augment the price of consumed energy. Like 

in many other countries, the Indian market cannot be considered to be penetrated 

with appropriate technology. And because experience with broad-scale clean energy 

is still in its early years, returns on investment can most probably only be earned in 

the mid to long term. 

In order to overcome this constraint on return on investment, project developers 

would need financing instruments at affordable rates, and at long term. However, 

most such projects are of small scale. They often do not attract commercial financing 

structures due to their weak prospects to be commercially successful within a time 

frame acceptable to lending institutions. Also, banks usually do not extend loans 

to new clients with unfamiliar business concepts that involve new technologies because 

this may mean a high perceivable risk. In fact, project developers and sponsors 

are often new to clean energy technologies. Because of their lack of experience, they 

might not be able to complete their projects on time or operate them properly. Thus, 

their creditworthiness is rated low by lenders. 

Mentality, negotiation and the jungle metaphor 

Since the Indian market has been booming, Indian businesspeople participating in 

international trade fairs and business forums have been emphasising the slogan: 

“India Everywhere!” This expresses not just the fact that everyone really is talking 

about their country, but also that there is an “Indian way of doing business” and that 

it is a real asset. 

Ten years ago, when you met an Indian businessman it often seemed as if he was 

apologetic for being the way he was. Nowadays you meet Indian businesspeople who 

are both focussed and demanding and who know what they want. They are proud of 

their economic achievements, which they have worked hard for since the liberalisation 

programme that was set in motion in 1991, and they are happy to emphasise that 

India is the world’s fastest-growing free market democracy. 

This makes contact with Indian businesspeople a less-delicate matter than some etiquette 

guides may suggest. The opening up of the Indian market brings with it the 

fact that Indians are also growing more accustomed to dealing with foreign partners, 

resulting in a certain amount of bilateral adjustment. 

Nevertheless, it is useful to be aware of certain particularities of doing business in 

India. For example, Indian businesspeople do not tend to distinguish between their 



27


private and professional lives. Around 70 per cent of all Indian firms are family businesses. 

Some 75 per cent of all employed people work in family businesses, where 

loyalty and permanence are significant success factors. It is worth investing in developing 

good personal relationships. 

Considering this requirement to invest extra time and energy, it becomes clear that 

money cannot be easily earned at short term. Any foreign company is well advised to 

develop a mid to long term strategy if it wants to be successful in India. 

However, many foreign businesspeople complain that their Indian counterparts 

have a short term investment planning only. Indian customers negotiate diligently 

and adamantly over prices but compromise on quality too readily. Indeed, selling expensive 

high-tech products from Switzerland to the price sensitive Indian customer 

requires mature negotiating skills. 

Drafting, reviewing and implementing contracts can be equally demanding. The 

Swiss and the Indian legal systems are rooted in differing concepts. They involve 

language and content which require the negotiating parties to discuss at length in 

order to reach a shared understanding. Once a contract is signed, one should follow 

through its implementation on both sides to be sure that the shared understanding 

is sustained in practice too. 

Paying attention to the relationship, the correlation of money and time, and the importance 

of preparing and negotiating sound contracts are means to the same end: 

making deals that are commercially and personally appealing. And that in spite of 

a framework in India that usually is intransparent to the outsider. In fact, many 

foreign businesspeople feel like they are in a jungle in India. The many sections and 

subsections of laws and regulations, the conflicting roles and responsibilities of government 

offices, and the multitude of required approvals might overwhelm the newcomer. 

Public tenders can be discouraging, the regulatory framework confusing, and 

the malfuntioning infrastructure frustrating. 

The jungle metaphor suggests inscrutability and no path ahead, unpredictability, 

and risk. However, it is perhaps exactly this which makes India an attractive business 

destination. After all, coping with the uncertain and unknown is a typical trait 

of entrepreneurship. 



28

Part 2: Background information 



29

Chapter 5: Economic profile 

Economic profile 

Until around 1770, India used to be the second largest economy in the world, contributing 

more than 20 per cent of total world economic output. With the Industrial 

Revolution, which emerged mainly in Britain and mainland European countries 

(and later in the USA), India’s importance to world economy began to diminish. By 

the 1970s, India’s economic productivity had fallen to 3 per cent after two centuries 

of relative economic stagnation. After India had become independent from its foreign 

colonial powers in 1947, it introduced inward-looking and state interventionist 

policies. In an attempt to shed all political, economic and cultural effects of colonisation, 

the government of India decided to wall off its economy. It implemented strict 

rules of regulation, restricting trade and economic freedom severely. The result was 

decades of low growth and an almost bankrupt national economy. 

Since the mid-1980s, successive reforms have 

progressively moved the Indian economy 

towards a market-based system. In 1991, a 

comprehensive programme was introduced 

to gradually remove obstacles to economic 

freedom. State intervention and control over 

economic activity have been reduced and the 

role of private sector entrepreneurship increased. 

However, government regulation in 

India is still comparatively high. TABLE 5.1 

shows how India and other markets are rated 

in terms of product market regulations. The 

indicator score runs from 0-6, representing 

the least to most restrictive regulatory regime. 



TABLE 5.1: Product market regulations: an international comparison 

India Latin 

America 

Although private entrepreneurship is on the rise, companies owned or controlled by 

the government continue to dominate sectors such as utilities, mining, banking, communications, 

as well as others. India’s government shows no intention to privatise 

its many holdings. Rather, its present economic focus is oriented towards improving 

infrastructure, health care and education. However (and to varying degrees), liberalisation 

has touched on most aspects of economic policy including industrial policy, 

fiscal policy, financial market regulation, trade and foreign investment. Since 2003, 

India has been one of the fastest growing economies, leading to rapid increases in 

per capita income. It is now integrated well in the global economy. 

In spite of the positive economic development, it cannot be ignored that around one 

third of India’s population has to manage their lives with less than one US dollar 

per day. Between 1999 and 2004, however, the absolute number of people living 

under the poverty line has fallen for the first time since 1947. According to UNICEF, 

only 66 per cent of all adults and 82 per cent of youth are literate. Further problems 

which could not be satisfactorily tackled through economic development are social 

inequality based on religion, caste and ethnic belonging as well as corruption and 

bad infrastructure. 

OECD 

emerging 

markets 

Euro 

area 

USA 

Overall indicator 2.85 2.08 1.98 1.49 1.03 

Indicators by functional areas 

Administrative regulation 3.02 1.99 2.17 1.68 1.09 

Economic regulation 2.70 2.10 2.04 1.91 1.30 

Inward and outward oriented indicators 

Inward-oriented policies 3.02 2.04 2.17 1.91 1.20 

Outward-oriented policies 2.62 2.36 1.72 0.88 0.78 

Source: Organisation for Economic Co-operation and Development (OECD), “OECD Economic 

Surveys: India”, 2007 

30

Chapter 5: Economic profi le 

India’s fi ve-year plans 

The Indian government implements its economic policies through fi ve-year plans. 

These are developed, executed and monitored by the Planning Commission. The fi rst 

fi ve-year plan was introduced in 1951. Performance in meeting the planned targets 

has improved, largely as a result of economic reforms. While traditionally the gross 

domestic product’s (GDP) growth rate has been the central objective, the current 

11 th fi ve-year plan also sets targets for other dimensions of economic performance, 

including reversing the slowdown in agricultural growth and providing education 

and health services to all citizens. 

The role of the federal states in meeting targets has been expanded. Many of the 

focus areas in the current plan, such as health, education, drinking water, urban 

infrastructure and agriculture, are the responsibility of the states, with substantial 

assistance from the central government. 

Market indicators 

While the annual average growth rate of India’s GDP was 6 per cent in the 1990s, 

it has risen remarkably since 2003. Among the biggest contributors to this growth 

have been manufacturing, trade, information technology, and banking services. The 

Asian Development Bank estimates that India’s economic output will grow 5 per 

cent in 2009, and 6.5 per cent in 2010. 1 The government of India hopes to achieve 

a GDP growth of 10 per cent in the year 2011, which some economists think is more 

than ambitious. Some Indian commentators argue that such a high rate of growth 

would not only ask too much of all civil and institutional stakeholders in India, but 

also bear the risk of the economy to overheat. 

The World Bank Group provides further indicators for an economy’s structure and 

productivity. Some of these indicators, such as foreign direct investments, gross 

domestic product, gross national income, internet users, mobile cellular subscriptions 

and population are shown in TABLE 5.2 for Brazil, India, the Russian Federation 

and the People’s Republic of China. 

With the economic development, 

the profi le of India’s 

income classes has 

changed as well. In the 

year 2002, there were only 

3 million Indian households 

with an annual income 

of more than 10,000 

US Dollars. Today, seven 

years later, this number 

has more than tripled to 

10 million households. In 

the same period of time, 

the broad Indian middle 

class grew from 50 million 

to about 95 million households 

with an annual in- 

1 Asian Development Bank (ADB), “Asian Development Outlook 2009”, 2009 



CHART 5.1: Share of GDP by sector 

Services 

54.6% 

Agriculture 

17.5% 

TABLE 5.2: Market indicators, India compared with BRIC (Brazil, Russian Federation, India, 

People’s Republic of China) countries 

Industry 

27.9% 

2004 2005 2006 2007 

B R I C B R I C B R I C B R I C 

FDI 18 15 6 55 15 13 7 79 19 30 17 78 35 55 23 138 

GDP 664 592 701 1932 882 765 810 226 1072 991 915 2658 1313 1290 1177 3206 

GDP-g 6% 7% 8% 10% 3% 6% 9% 10% 4% 7% 10% 12% 5% 8% 9% 13% 

GNI 610 491 681 1938 727 639 807 2273 895 826 915 2640 1122 1070 1071 3126 

WWW 19 13 3 7 21 15 4 9 31 18 7 11 35 21 7 16 

Mobile 36 51 5 26 46 84 8 30 53 106 15 35 63 115 21 42 

Pop 184 144 1080 1296 187 143 1095 1304 189 142 1110 1311 192 142 1125 1318 

Pop-g 1% -1% 1% 1% 1% -0% 1% 1% 1% -0% 1% 1% 1% -0% 1% 1% 

Legend 

FDI: foreign direct investment, net infl ows, at current billion US$ 

GDP: gross domestic product, at current billion US$ 

GDP-g: annual growth of gross domestic product 

GNI: gross national income, Atlas method, at current billion US$ 

WWW: internet users per 100 people 

Mobile: mobile cellular subscriptions per 100 people 

Pop: total population in millions 

Pop-g: population growth 

Source: World Bank Group, “World Development Indicators”, 2008 

31

Chapter 5: Economic profi le 

come of between USD 2,000 and 10,000 (approx. CHF 2,130 - 10,600). 

At the lower end of the income scale, the development was inversed. 

While in 2002 the number of households with an income of less than 

2,000 USD was 135 million, this number has shrunk to about 110 million 

households. These income classes are spread across the country. 

However, households with more income tend to be concentrated in cities 

with a population of more than 1 million, of which there are 42 in 

India. Moreover, richer states are growing faster and reducing poverty 

more quickly. 2 

Better off states are typically located in India’s south and west: Andhra 

Pradesh, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, 

Maharashtra, Punjab, Tamil Nadu. 

States with small or moderate household incomes are in India’s north 

and east: Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Jammu & 

Kashmir, Jharkhand, Mad- 

36 º 

hya Pradesh, Manipur, Meghalaya, 

Mizoram, Nagaland, 

Orissa, Rajasthan, Sikkim, 

Jammu & Kashmir 

Tripura, Uttar Pradesh, Ut- 

Srinagar 

32 º 

taranchal, West Bengal. 

Agglomerations with a population 

size of one million 

people and more is another 28 º 

indicator relevant to this 

study. An agglomeration 

includes a central city and 

neighbouring communities 24 º 

23.5 º 

linked to it by continuous 

built-up areas or commuters. 

Some agglomerations 

have more than one central 20 º 

city. 

Drivers of growth 

India’s economic development 

is owed to an interlinked 

growth of services 

and industry. Private information 

technology and biotechnology 

fi rms have seen 

continued growth of around 

30 per cent in their sectors 

and are among their best 

in class globally. 3 16 º 

12 º 

8 º Industry 

has experienced faster 

gains than in the decades 

2 Organisation for Economic Co-operation and Development (OECD), “OECD Economic Surveys: India”, 2007 

3 Goldman Sachs Bank (Switzerland), “BRICs-KOMPASS”, 2006 

4 International Energy Agency (IEA), “World Energy Outlook 2007”, 2007 



CHART 5.2: Income distribution among 

Indian households (HH) 

2002 2010 

3 

50 

135 

10 

95 

110 

Total: 188 m HH Total: 215 m HH 

Sources: Citigroup, 2008. National Council for 

Applied Economic Research (NCAER), 2007 

68 º 72 º 76 º 80 º 84 º 88 º 92 º 96 º 

Jodhpur 

Gujarat 

Ahmedabad 

Rajkot 

Rajasthan Agra 

Jaipur 

Kanpur 

Gwalior 

Karnataka 

Bangalore 

Kerala 

Thiruvananthapuram 

Amritsar 

Punjab Ludhiana 

Chandigarh 

Vadodara 

Haryana 

Meerut 

New Delhi 

Uttar Pradesh 

Lucknow 

Madhya Pradesh Jharkhand 

Bhopal Jabalpur Ranchi 

Indore 

Jamshedpur 

Tamil Nadu 

Chennai 

Map of India 

Wealth distribution 

Bihar 

Patna 

Varanasi 

Better off states 

States with small or 

moderate household 

incomes 

Population 5 million or more 

Population 1 to 5 million 

Assam 

Guwahati 

Dhanbad 

Asansol 

West Bengal 

Kolkata 

Surat 

Nagpur 

Chhattisgarh 

Bhilai 

Nashik Shambajinagar 

Maharashtra 

Mumbai 

Pune 

Solapur 

Orissa 

Bhubaneshwar 

Andhra Pradesh 

Hyderabad 

Kolhapur 

Visakhapatnam 

Kozhikode 

Coimbatore 

Kochi 

Madurai 

Allahabad 

Tiruchirappalli 

Vijayawada 

32


since India’s independence in 1947. The main reason 

for higher output growth since 2003 is owed to higher 

manufacturing productivity which is contrary to the 

conventional wisdom that India’s economic growth is 

largely services-led. In fact, a quarter of service activity 

is directly linked to industrial activity, in sectors such 

as trade, transport, electricity and construction. The 

underlying factors behind the increase in productivity 

were acceleration in international trade, an increased 

availability of financial services and investments in 

information and communication technology. Thus, 

services and manufacturing are expected to remain the 

main drivers of India’s economic development. 

Further, although India’s industrial sector contributes 

a comparatively moderate share of roughly 26 per cent 

(manufacturing, mining, utilities and construction) to 

the country’s GDP, domestic as well as foreign investments 

in industrial projects are on the rise. The industrial 

sector is likely to grow considerably in the short to 

medium term and that, as seen in many industrialised 

countries, at the cost of the agricultural sector. As an 

additional indicator, the GDP per capita grew by about 

5.4 per cent per year in 2000-2005 and is expected to 

grow by 6.4 per cent in 2005-2010. 4 

Another driver of growth is the food industry that caters 

to the needs of the ever growing middle class, as shown 

above. Also, the 4 million tourists who visit India every 

year consume local products and avail services, contributing 

around 5 per cent to India’s GDP. 5 

Various governmental and non-governmental agencies 

estimate that India will be the most populated country 

in the world by the year 2034. The same sources calculate 

that the country’s per capita GDP in the year 2050 

would be 35 times bigger than today. Whether these es- 

timates prove to be right or wrong, one of India’s greatest potentials for growth lies 

with its young population. One third of all Indian inhabitants are younger than 15 

years. This combined with the fact that India is a free market democracy, eager to 

become a fully industrialised, wealthy, modern country, doubtlessly is a favourable 

precondition for further growth. 

On the downside, India still suffers from problems such as poverty, overpopulation, 

migration into cities and environmental pollution. Eradicating poverty, for example, 

is a challenge which the government of India hopes to tackle through further 

liberalisation, deregulation and its commitment to “inclusive growth”, meaning that 

resources should be allocated equally across the country and the benefits reaped by 

every section of society. 

5 Goldman Sachs Bank (Switzerland), “BRICs-KOMPASS”, 2006 





Special economic zones (SEZ) 

The success of software parks in stimulating the development of the 

information technology service industry has led the government to progressively 

introduce laws to enable the development of special economic 

zones (SEZs), oriented to the manufacturing sector. The development 

of SEZs has, until recently, been slow. Even though India created the 

first such zone in Asia in 1965, only eight existed by 2004, providing 

only 5 per cent of goods’ exports. Because of this slow development, the 

government introduced a new policy in early 2006. Although the previous 

policy provided for considerable tax advantages, it did not help overcome 

the administrative barriers to businesses nor did it address shortcomings 

of the infrastructure, notably for road and electricity. 

The new policy relies on private developers to create an SEZ and provide 

all infrastructure. This should generate additional economic activity and 

create employment. The new laws and regulations that govern SEZs 

allow: 

- Single window clearance for development in an SEZ; simplified administrative 

procedures and exemptions from many restrictive policies; 

exemption from selected central laws. 

- Application of all municipal and many state laws by the SEZ authority. 

- Separate court system with internal security provided by the SEZ authority. 

- Labour laws have also been modified in a number of states, abolishing 

previous constraints, freely allowing contract labour, and a significant 

number deeming all enterprises in a SEZ to be public utilities and hence 

making wildcat strikes (i.e. those without due notice) illegal. 

Significant tax concessions have also been granted: 

- Total corporate tax exemption for five years, 50 per cent for a further 

five years and a further exemption for reinvested earnings derived from 

exports, with developers allowed a ten year window of tax exemption; 

SEZ developers are exempted from the minimum alternate corporate 

tax and the dividend distribution tax. 

- Imports into the SEZ are tax and tariff free, but sales to the domestic 

market are regarded as imports into India. 

There are doubts about the efficacy of SEZs as a way of fast-tracking 

economic development. Also, the Reserve Bank of India (RBI) has recently 

raised the cost of lending to SEZs. Supporters think that they could 

contribute to developing the country’s comparatively small manufacturing 

sector. The broader debate is focused on whether the gains in investment 

(estimated by the Ministry of Commerce to be a potential USD 22 billion; 

approx. CHF 23.4 billion) and employment (estimated by the same Ministry 

to be some 500,000 jobs over the next few years), will outweigh the 

loss of revenue from tax concessions. The Finance Ministry and Reserve 

Bank of India have also voiced concerns that the scheme will work only if 

the SEZs are very large and are built in coastal regions, as in China. 

Sources: Swiss Business Hub India, India, 2009. Economist Intelligence 

Unit (EIU), 2006 

33


Reforms 

In its economic survey of India, the Organisation for Economic Co-operation and 

Development (OECD) suggests that there is considerable scope for improving economic 

performance and reducing income disparities across states. These goals could 

be achieved by bringing government regulation in product markets into line with 

best practices. 6 The OECD applies indicators of product market regulation (PMR) to 

see to which extent state control, barriers to entrepreneurship and barriers to international 

trade and investment promote or inhibit competition. 

Although there are a number of areas where the regulatory framework in India is 

now comparable with best practices in the OECD area, the overall level of product 

market regulation is still quite high, restricting competition to a greater extent than 

in all OECD member countries. Reforms in India are usually designed with caution 

and with a particular view to satisfy concerns of domestic businesses and to safeguard 

market stability. Also, the government owns and operates many firms in a 

range of sectors, many of which are inherently competitive. But there are no signs 

that these companies may be privatised fully or partially in the near future. 

On the positive side, the sub indicators imply minimal direct government interference 

in the conduct of private sector firms. The level of direct government control 

over private firms is broadly comparable with that in emerging OECD economies. 

Price formation, for example, is in most segments of the Indian retail market free of 

government interference. 7 

Those areas that have been liberalised have responded well and had a beneficial 

impact on the economy. In service sectors where government regulation has been 

eased significantly or is less burdensome, such as communications, insurance, asset 

management and information technology, output has grown rapidly. In those 

infrastructure sectors which have been opened to competition, such as telecoms and 

civil aviation, the private sector has proven to be effective and growth has been significant. 

At the state level, economic performance is better in states with a relatively 

liberal regulatory environment than in the relatively more restrictive states. 8 

The key areas where further reforms are required are: 

- Openness Among the BRIC countries (Brazil, Russian Federation, India, People’s 

Republic of China), India has the lowest share of foreign trade: while China’s share 

is 51 per cent, India’s is as low as 31 per cent. Given the fact that India’s share in 

1980 was even lower at 15 per cent, further relaxing the regulatory framework 

for foreign trade in both directions would certainly become a major driver for 

growth. 

- Education A vast number of India’s young people receive no or only the most basic 

education. Although there are many highly educated people in India, and that 

with good to very good English skills, the fact remains that from a total population 

of 1.1 billion too many people are not literate or educated; the literacy rate of 

Indian adult males is 70 per cent, of adult females it is only 48 per cent. Without 

hundreds of millions of Indian citizens receiving a better elementary and secondary 

education, it will be virtually impossible for India to seize its potential. 




34


- Increase agricultural productivity Especially in these times of rising prices, agriculture 

should be a great opportunity for India. Better specific and defined plans 

for increasing productivity in agriculture are essential, and could allow India to 

benefit from the BRIC-related global thirst for better quality food. 

- Control inflation Although India has not particularly suffered from dramatic inflation 

it is currently experiencing a rise in inflation similar to that seen in a number 

of emerging economies. 

- Infrastructure There is a high and rapidly growing demand for infrastructure 

services across a range of sectors. Access to infrastructure is extremely low by 

world standards, and the capital stock in public utilities lags far behind today’s requirements. 

Currently, investment in roads in India is of the order of 0.4 per cent 

of GDP. According to the OECD’s economic survey, India looses some USD 4 - 6 

billion (approx. CHF 4.2 - 6.3) each year because of its poor infrastructure. International 

trade is affected too. Goods shipped from the USA arrive in India after 8 

to 12 weeks. In comparison, the transit time from the USA to China is 2 to 3 weeks. 

In sectors that have been reformed, such as mobile cellular telephony and civil 

aviation, private businesses operate more productively and deliver higher quality 

to customers. Last but not least, the supply of energy needs to improve, both in 

terms of quantity and quality, and its efficiency needs to be raised substantially. 

- Environment If not managed better, urbanisation, industrialisation and ongoing 

global climate change will damage India’s environment perhaps beyond repair. Its 

high population density, extreme climate and dependence on its natural resource 

base are an unfavourable mix of factors which a sound policy needs to overcompensate. 

However, in the power sector alone, the Indian government plans to add 

some 70,000 MW between 2007 and 2013, and the dominant source of power 

will be coal which accounts for some 60 per cent of power generation. Coal has 

significant environmental effects, including gaseous emissions, high ash content, 

problems with disposal of ash and large emissions of carbon-dioxide. The regulatory 

agencies are equipped with promising environmental policies, but these need 

to be enforced more strictly. For example, the World Bank estimates that small 

and medium enterprises in India account for 70 per cent of total industrial pollution. 

But in certain states, companies violating environmental standards are not 

penalised while those who fulfil the rules are not rewarded (e.g. through tax cuts). 

Other state governments are moving to enforce legislation following Supreme 

Court judgements requiring them to respect their constitutional duty to protect 

the environment. This led New Delhi to convert its public transport fleet to run on 

compressed natural gas (CNG). 9 


10 Swiss Business Hub India, India, 2009 



35

Chapter 6: Political structure 

Political structure 

India is a federal republic of twenty-eight states and seven union territories. All 

states and the two union territories of Puducherry and the National Capital Territory 

of Delhi have elected governments. The other fi ve Union Territories have centrally 

appointed administrators and are under direct rule of the President. India became 

an independent state in 1947. Its constitution came into force on January 26, 1950. 

India’s constitution defi nes the administrative and legislative relationship between 

the central and state governments as well as the union territories. It lays out the 

concurrent subjects over which the central and state governments share responsibility, 

including electricity, economic and social planning, education, forests, trade 

unions and industrial and labour disputes. Policy and laws are set either at the centre 

or by the states, depending 

on the subject concerned. 36 º 

In cases where central law 

is in confl ict with state law 

on a concurrent subject, the 

central law prevails. Hindi 

32 º 

and English are the two 

offi cial languages of communication 

for the central 

government. The state gov- 

28 º 

ernments use their own language, 

together with English 

for communication with the 

central government. In- 

24 º 

dia has 22 constitutionally 23.5 º 

recognised languages, plus 

many further languages and 

dialects. 

The legislature of India is 

the bicameral Parliament, 

which consists of the upper 

16 º 

house called the Rajya Sabha 

(Council of States, 250 

members) and the lower 

house called the Lok Sabha 

12 º 

(House of People, 545 members). 

India’s current President 

is Mrs. Pratibha Patil, 

while Prime Minister Mr. 

Manmohan Singh heads the 8 º 

20 º 

state’s affairs. Ministers are 

appointed by the president 

on the recommendation of 

the prime minister. India operates a multiparty system and enjoys a high turnout 

at election time. Thanks to its democratic pluralistic self-image, India is politically 

stable. Communal, religious and regional tensions erupt occasionally, but these do 



68 º 72 º 76 º 80 º 84 º 88 º 92 º 96 º 

Gujarat 

Gandhinagar 

Goa 

Panaji 

Punjab 


Rajasthan 

Jaipur 

Karnataka 

Bangalore 

Kerala 



Srinagar 

Himachal Pradesh 

Shimla 

Uttaranchal 

Dehradun 

Haryana 

New Delhi 

Daman & Diu 

Diu Dadra & Nagar Haveli 

Daman & Diu Silvasaa 

Daman 

Maharashtra 

Mumbai 

Lakshadweep Islands 

Kavarati 

Madhya Pradesh 

Bhopal 

Uttar Pradesh 

Lucknow 


Hyderabad 

Pondicherry (Yanam) 

Tamil Nadu 

Chennai 

Jharkhand 

Ranchi 

Chhattisgarh 

Raipur 

Pondicherry (Puducherry) 

Pondicherry (Karaikal) 


States and Union Territories 

National Capital 

State Capital 

Union Territory Capital 

Mi 100 200 300 

Km 100 200 300 400 

Sikkim 

Gangtok 

Bihar 

Patna 

West Bengal 

Kolkata 

Orissa 

Bhubaneshwar 

Assam 

Guwahati 

Meghalaya 

Shillong 

Tripura 

Agartala 

Arunachal Pradesh 

Itanagar 

Nagaland 

Kohima 

Manipur 

Imphal 

Mizoram 

Aizwal 

Andaman & 

Nicobar Islands 

Port Blair 

36

Chapter 6: Political structure 

not cause any lasting damage to the intrinsic peace of the country. India has a strong 

and proactive civil society as well as a free and vibrant press. 

India’s judiciary is independent of the executive and the legislature. Investors can 

have confidence in national and state laws which, in principle, offer considerable 

protection. However, the World Bank writes in its country briefing about India that 

in practice the legal system is characterised by serious delays and that there are cases 

of corruption and undue interference by government bodies. There is a huge backlog 

of court cases. In 2005 the Indian government enacted the “Right to Information 

Act” in an effort to make information about the working of the country’s administration 

and government more accessible and transparent to its citizens. 

Size 

India’s capital city is New Delhi while the largest city is Mumbai. It is the seventh 

largest country by geographical area, the second most populous country, and the 

most populous democracy in the world. According to the national census of 2007, 

India has a population of 1,129,866,000 people who share a total area of 3,287,365 

square kilometres (of which around 80,000 are in dispute with Pakistan). India’s 

area is almost 80 times larger than the one of Switzerland (41,290 km 2 ). 

Historical background 

In the course of its history India has been conquered, settled and colonised on numerous 

occasions. Its strategically favourable location, its abundance of natural resources 

and the early development of its civilisation have attracted people from all 

parts of the globe since time immemorial. Indo-Aryans, who came from the Caucasus 

to conquer India from 3000 BC onward, managed to push through to the southernmost 

tip of India. In the course of their rule they spread Vedic teachings which created 

a civilisation where a common belief system and a similar way of thought, feeling 

and behaviour developed. Later settlement through Persians, Greeks and Central 

Asians served to intensify this culture. When European colonial powers arrived in 

India in the 15 th century, the situation changed dramatically. The English royal family 

founded the East India Company in an attempt to dominate trade with Asia. India 

was selected to act as a hub, became an English dominion and was colonised not only 

economically, but also politically, militarily and culturally. 

India launched its independence movement in the middle of the 19 th century and 

became a free nation in 1947. 

Time difference 

The time difference between Switzerland and India is 4.5 hours during winter and 

3.5 hours during summer time. 

Currency 

The Indian Rupee is subdivided into 100 Paise. Its ISO-4217 code is INR. Further 

common abbreviations are Rs, iR and Re. 



37

Chapter 7: Energy policy and administration 

Energy policy and administration 

There are four major characteristics that drive 

India’s energy policy: 

1. The economy is growing rapidly, which calls 

for dependable and reliable supply of electricity, 

gas and petroleum products; 

2. Because household incomes are growing, 

electricity and clean cooking fuels are being 

required in bigger volumes and at affordable 

prices; 

3. Although India is harnessing fossil fuels domestically, 

it needs to import big volumes of 

gas, crude oil, coal and petroleum products 

because its own reserves are limited; 

4. Environmental impacts that are created indoor 

(mainly in private homes, farms, repair 

shops, small factories) make it necessary to 

adopt cleaner fuels and cleaner technologies. 

In its policy making processes the Government of 

India tries to find trade-offs between these four 

major drivers. This is often difficult to achieve. 

For example, the supply of adequate, yet affordable 

electricity generated and used cleanly is a 

continuing challenge. Adopting clean energy 

technologies and using more sources of renewable 

energy usually means that such electricity 

is too expensive for many Indians, particularly 

in rural areas. 

Overall, the main issues the energy sector is confronted 

with are a high level of network losses, 

huge financial losses, an inadequate generation 

and transmission capacity as well as a poor quality 

of supply. In recent years the challenge to address 

these problems has led the Government 

of India to introduce a wide set of reforms and 

restructuring. 

In its Integrated Energy Policy Report of 2006, 

the Government of India’s Planning Commission 

provides a long term energy policy and guidance 

on the further growth of the country’s energy 

sector. The key measures to be taken based on 

the new policy framework are shown in TABLE 

7.1. 



TABLE 7.1: India’s Integrated Energy Policy: priority recommendations of 

the Expert Committee 

Recommendation Goals 

Ensure adequate 

supply of coal of 

consistent quality 

Address the concerns 

of resource-rich 

states 

Ensure availability of 

gas for power generation 

Reduce the cost of 

power 

Rationalise fuel 

prices 

Enhance energy efficiency 

and demandside 

management 

Augment resources 

for increased energy 

security 

Use more energy 

abroad 

Enhance role of nuclear 

and hydropower 

Enhance role of 

renewable energy 

resources 

Ensure energy 

security 

Boost energy related 

research & development 

Improve household 

access to energy 

Enable environment 

for competitive efficiency 

Address climate 

change concerns 

- Make more coal blocks eligible for development by private 

companies or joint ventures 

- Build infrastructure to facilitate steam coal imports 

- Rationalise coal pricing 

- Facilitate private participation 

- Allow the states to share profits 

- Revise royalty rates 

- Create a national policy on domestic natural resources 

- No new gas fired capacity to be built until firm gas supply 

agreements are in place 

- Reduce losses through use of automated meters and 

separate metering of agricultural pumps 

- Proper setting of cross-subsidy surcharges, wheeling and 

backup charges 

- Create an efficient interstate and intrastate transmission 

system 

- Refurbish power stations, generation and transmission 

projects built on tariff-based bidding 

- Price energy at trade-parity prices 

- Remove administered pricing scheme 

- Improve power generation efficiency from 36 per cent to 

38 - 40 per cent 

- Information dissemination 

- Minimum fuel standards 

- Carry out surveys of energy resources 

- Enhanced recovery of domestic resources 

- Private sector involvement 

- Invest in captive fertilizer and gas liquefaction facilities 

- Tap thorium reserves 

- Create more hydro storage facilities 

- Link incentives to outcomes like energy generation, not 

installed capacity 

- Enact policies to promote alternatives like plantations, 

gasifiers, solar thermal and photovoltaics, biodiesel and 

ethanol 

- Expand equity base of the Indian Rural Energy Development 

Agency (IREDA) 

- Maintain strategic oil reserves in line with International 

Energy Agency (IEA) standard of 90 days 

- Engage in bilateral agreements to reduce supply risk 

- Set up a national energy fund to finance energy research 

& development 

- Provide electricity to all households by 2009/10 

- Have more targeted subsidies using debit card systems 

- Improve efficiency of cook stoves and kerosene lanterns 

- Use more distributed generation 

- Increase access to financing for microenterprises 

- Involve rural communities in decision-making 

- Devolve regulatory responsibilities from ministries to the 

state level 

- Regulators should mimic competitive markets 

- Enhance energy efficiency in all sectors 

- Increase mass transit 

- Use more renewable and nuclear resources 

- Invest in clean coal technologies 

- More research and development 

Source: Federal Planning Commission, India, 2006 

38


In order to improve generation, transmission and distribution of energy, governmental 

offices and agencies have recently been putting a special focus on foreign direct 

investment (FDI), rural areas, mega power projects, ultra mega power projects, 

captive generating plants, transmission, open access to transmission, and distribution. 

These focus areas are discussed as follows. 

Automatic approval for foreign direct investment (FDI) 

In order to facilitate FDI, automatic approval for 100 per cent foreign equity without 

any upper ceiling on the quantum of investment is permitted in generation, transmission 

and distribution of electricity. 

Rural areas 

Anyone who generates electricity is now allowed to distribute electricity in a rural 

area without acquiring any license. However, the Central Electricity Authority (CEA) 

may demand that certain technical and procedural requirements are met. 

Mega power projects 

In 1995 the Government of India sought greater private investments for generation 

projects with a capacity of 1,000 MW or more. These mega power projects have to 

supply electricity to more than one state. 19 projects (14 in the public and 5 in the 

private sector) were declared to be mega power projects. The Power Trading Corporation 

(PTC) was set up to purchase power from the identified projects and to sell 

it to the respective State Electricity Boards (SEB). The government not only applied 

more competitive bidding than before, but exempted customs duty on the import of 

capital equipment for such projects. The projects were also granted a holiday from 

income tax for 10 years. Because of its success, this policy was further liberalised. All 

inter-state thermal projects and all inter-state hydro projects of 1,000 MW and more 

were accorded mega project status. Also these projects are able to secure duty free 

import of capital goods. 

Ultra mega power projects 

Under the current 11 th five-year plan, significant capacity additions to electricity generation 

are being planned. Recognising the fact that large size power projects can 

supply cheaper power thanks to economies of scale, the Ministry of Power (MoP), 

the Central Electricity Authority (CEA) and the Power Finance Corporation (PFC) 

are working towards the development of five new projects. These ultra mega power 

projects will be coal-based and shall have a capacity of 4,000 MW or more. These 

projects will be awarded to developers on tariff-based competitive bidding. As of 

July 2009, ultra mega power projects were planned in the states of Andhra Pradesh, 

Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Orissa 

and Tamil Nadu. The projects planned in Chhattisgarh, Madhya Pradesh, Orissa 

and Jharkhand shall be built near coal mines and use domestic fuel, while the other 

projects will be situated in coastal locations with access to imported coal. 

Captive generating plants 

Any company or individual may build, maintain or operate a captive generating plant 

and dedicated transmission lines. 

Transmission 

In order to increase India’s transmission lines from 265,000 circuit kilometres (ckm) 

today to 294,000 ckm, the Government of India plans to build interstate transmis- 



39


sion super highways. The PowerGrid Corporation of India, a company controlled by 

the government, is responsible for the interstate transmission and for creating a national 

grid. Both, the expansion of transmission lines and the creation of a national 

grid, will be partially open to private sector participation. 

Open access to transmission 

In order to promote competition, generating companies may now use transmission 

lines to sell electricity to different distribution licensees across the country. Also, 

operators of captive generating plants have open access to transmission, so that they 

can carry electricity from their captive generating plant to the destination of their 

own use (provided that appropriate transmission capacity is available). 

Distribution 

In 2002, the Government of India introduced the Accelerated Power Development 

Programme (APDP) in order to reduce aggregate technical and commercial losses, 

improve the financial viability of state utilities, improve customer satisfaction as well 

as to increase the reliability and quality of power supply. At present, between 18 to 

62 per cent of energy is lost due to unplanned extensions of distribution lines, overloaded 

transformers and conductors as well as lack of reactive power support. Low 

efficiency of metering, power theft and pilferage cause commercial losses. As part 

of the APDP, 11 kV feeders and consumers are in the process of being metered and 

energy audits conducted. 1 

Administration 

National level 

Three ministries play a key role at the national level: 

1. Ministry of Power (MOP) 

2. Ministry of New and Renewable Energy (MNRE) 

3. Ministry of Environment and Forests (MoEF). 

These key ministries are assisted or supported by further line ministries, government 

commissions and agencies, as well as public sector undertakings. 

State level 

State governments in India have considerable responsibilities and authority in the 

energy sector. The Indian parliament cannot legislate over certain aspects of this 

sector in the states. As in most federal systems, the states are responsible for implementing 

national laws, but can also issue state laws and regulations in their own territory. 

As a result, the evolution of power sector reforms and the level of penetration 

of renewable energy sources, particularly biofuels, differ widely among states. 2 

The policy and regulatory framework related to clean energy is defined and implemented 

at the national and state levels. CHARTS 7.1 and 7.2, and TABLES 7.2 and 

7.3 provide details about the organisational structure and administrative responsibilities 

of the involved governmental organisations. 

1 India Brand Equity Foundation (IBEF), India, 2009 




40


Planning 

Commission 

State Electricity 

Regulatory Commission 

(SERC) 

Ministry of Coal Ministry of Power 

(MoP) 

CHART 7.2: State Government 

Department of 

Environment 

(DoE) 

State Pollution 

Control Board 

(SPCB) 

- Central Electricity 

Regulatory 

Commission 

(CERC) 

- Central Electricity 

Authority (CEA) 

- Bureau of Energy 

Efficiency 

(BEE) 

- Utilities 

- NTPC Ltd. 

- National Hydroelectric 

Power 

Corporation Ltd. 

(NHPC) 

- Power Finance 

Corporation Ltd. 

(PFC) 

- Rural Electrification 

Corporation 

Ltd. (REC) 

- Power Grid Corporation 

(PGC) 

- Power Trading 

Corporation 

(PTC) 


Power (DoP) 

- State utilities 

- Energy generation 

companies 

(GENCOs) 

- Distribution 

companies (DIS- 

COMs) 

- Transmission 

companies 

(TRANSCOMs) 

Electrical Inspectorate 

CHART 7.1: Government of India 

Ministry of 

Petroleum & 

Natural Gas 

(MOP&NG) 

Upstream and 

downstream 

companies 

State Renewable 

Development 

Agency (SRDA) 




New & Renewable 

Energy (MNRE) 

Indian Renewable 

Energy Development 

Agency 

(IREDA) 


Atomic Energy 


Environment & 

Forests (MoEF) 

Central Pollution 

Control Board 

(CPCB) 

41


TABLE 7.2: National level energy policy and administration 

Planning Commission 

- Formulates India’s five-year plans 

- Assesses energy, capital and human resources in the country 

- Formulates plans for their effective utilisation 

- Appraises progress in meeting targets 

Ministry of Power (MoP) 

Responsible for 

- Long term power sector planning 

- Policy making 

- Assigning investment priorities 

- Monitoring the implementation of power projects 

- Training and manpower development 

- Enactment and implementation of legislation with regard to thermal and 

hydropower generation, transmission and distribution 

Key player in the area of clean energy policies and administration 

Ministry of New and Renewable Energy (MNRE) 

- Responsible for carrying out a national programme to increase wind, 

small hydro and biomass-based power generation capacity 

- In charge of policy making in the field of biofuels 

- Aims to expand the use of renewable energy in urban, industrial and 

commercial applications and, in remote rural areas, its application, 

particularly in cooking, lighting and motive power 


Ministry of Environment and Forests (MoEF) 

- Responsible for planning, promoting, coordinating and overseeing the 

implementation of environmental and forestry programmes 

- Approves and administers clean development mechanism projects in 


- Functions as a nodal ministry for Clean Development Mechanism 

(CDM) projects in India 


Ministry of Petroleum & Natural Gas (MOP&NG) 

- Oversees the exploration and production of oil and natural gas, their 

refining, distribution and marketing as well as the import, export and 

conservation of petroleum products and liquefied natural gas 

- Responsible for development and implementation of pricing policy and 

for supervising the marketing of biofuels 

- Promotes clean energy through the promotion of compressed natural 

gas (CNG) and liquefied petroleum gas (LPG) as well as end use 

energy efficiency in oil-fired equipment such as boilers and furnaces 

Ministry of Coal 

- Responsible for determining policies and strategies with respect to the 

exploration and development of coal reserves 

- Supervises Coal India (largest coal mining company in India and in the 

world; owned by the government) and its subsidiaries, as well as Neyveli 

Lignite Corporation (government-owned lignite mining company) 

- Promotes clean technologies for coal production, coal gasification and 

coal bed methane 

Ministry of Finance 

- Provides support for clean energy by determining tax benefits in the 

overall assessment of excise duties, central taxes and provision of tax 

exemptions as well as fiscal incentives for clean technologies 

Government of India 



Assisted by 

- Central Electricity Regulatory Commission (CERC): regulates all activities 

related to power at the central and interstate level; responsible 

for managing electricity trading, regulating interstate transmission and 

tariffs, generating the tariffs of central utilities and regulating transmission 

lines 

- Central Electricity Authority (CEA): advises the central government on 

matters relating to the national electricity policy; formulates short term 

and perspective plans for the development of the electricity system 

- Bureau of Energy Efficiency (BEE): coordinates energy efficiency and 

conservation policies and programmes; implements action plans with 

the help of state nodal agencies 

- NTPC Ltd. and National Hydroelectric Power Corporation Ltd.: thermal 

and hydropower-generating utilities 

- Power Finance Corporation Ltd. and Rural Electrification Corporation 

Ltd.: financial institutions operating under the Ministry of Power 

- Power Grid Corporation (PGC) and Power Trading Corporation (PTC) 

Assisted by 

- Indian Renewable Energy Development Agency (IREDA): finances 

renewable energy and energy efficiency projects 

- State nodal agencies: develop projects and finance renewable energy 

programmes 

Assisted by 

- Central Pollution Control Board (CPCB) to formulate policies, rules, 

regulations, guidelines, standards and action plans related to the environment 

and pollution control at the national level 

42


TABLE 7.2: National level energy policy and administration (continued) 


Ministry of Rural Development 

- Responsible for developing biodiesel projects across the country (e.g. 

by promoting jatropha plantations) 

Ministry of Agriculture 

- Handles research and development for the production of biofuel feedstocks 

Ministry of Small-Scale Industries 

- Promotes clean technologies in small-scale industry sectors 

Department of Atomic Energy 

- Responsible for administration of India’s nuclear programme 

Department of Science and Technology 

- Provides support for clean energy by providing funds to technology 

development projects for clean energy (e.g. research into biofuel crops, 

biotechnology etc.) 

Source: Government of India, 2009 

TABLE 7.3: State level energy policy and administration 

State Electricity Regulatory Commission (SERC) 

- Deals with licensing, tariffs and competitive issues 

Department of Power (DOP) 

- Implements policies and action plans through state utilities (generation, 

transmission and distribution) and the electrical inspectorate 

State Renewable Development Agency (SRDA) 

- Implements policies and action plans related to renewable energy 

- Serves as a nodal agency for implementing energy efficiency policies 

and action plans 

- In some states and union territories, renewable energy falls under the 

jurisdiction of the Department of Power (DOP) 

Department of Environment (DOE) 

- Implements policies and action plans for the environment and pollution 

control 

Source: Government of India, 2009 

State Government 



Assisted by 

- State utilities 

- Energy generation companies (GENCOs) 

- Distribution companies (DISCOMs) 

- Transmission companies (TRANSCOMs) 

Assisted by 

- State Pollution Control Board (SPCB): responsible for ensuring compliance 

during project inception, construction and implementation 

43

Chapter 8: Energy in India 

Energy in India 

Yesterday, today and tomorrow 

India’s electrification began almost simultaneously with the developed world. 

In the 1880s, a small hydroelectric power station was established in Darjeeling 

(state of West Bengal). Commercial production and distribution started in 

1889, in Kolkata (West Bengal). When India became independent in 1947, the 

country had a power generating capacity of 1,362 megawatts (MW), but power 

was available only in a few urban centres. From the 5 th five-year plan (1974-79) 

onward, the Government of India ventured to set up large power projects in 

order to develop coal and hydroelectric resources in the country. However, it 

was only in 1995 that a policy for mega power projects with a capacity of 1,000 MW 

or more and supplying power to more than one state was introduced. As a result, 

India had a total installed capacity of almost 147,402 MW in May 2009. 

In spite of these capacity additions, the energy sector has not been able to catch up 

with the growing demand for electricity. In fact, the demand-supply gap is growing. 

The Indian Ministry of Power calculated that the country was faced with energy 

shortage to the volume of 10.6 per cent between April and September 2008. In its 

“Load Generation Balance Report 2009 - 2010“, the Central Electricity Authority 

(CEA) writes that out of the country’s total installed capacity of 147 gigawatts (GW), 

only 85 GW is operational at any point. 

It may be noted here that India’s overall energy intensity, measured as primary energy 

consumption per unit of gross domestic product (GDP), has declined since 1980. 

This was mainly thanks to the growing share of the services sector in GDP, which is 

less energy intensive. Improved efficiency of energy use and a changing fuel mix in 

the industry sector also contributed to the decline. For example, the share of coal in 

total energy use in industry, at around 41 per cent in 1990, had dropped to around 

30 per cent by the year 2005. 

However, the Government of India has not been able to meet its own targets. For 

2008-09, it had planned to add a capacity of 11 GW, but the actual addition was only 

3.5 GW. In the five years prior to that, 21 GW were added against a target of 41 GW. 

Still, 56 per cent of India’s rural population does not have access to electricity. 1 

The International Energy Agency (IEA) believes that India’s primary energy demand 

will necessarily multiply three to four times if the planned economic growth is to 

be achieved. In absolute terms this means an increase in energy demand from 542 

million tons of oil equivalent (Mtoe) in 2006, to 842 Mtoe in 2016, to 1,836 Mtoe in 

2031, an increase that will move India from being the fourth largest energy consumer 

in the world today to the third largest by 2030, after China and the USA. 2 In another 

calculation, consultancy firm McKinsey estimates that India’s energy demand will 

increase to anything between 315 and 335 GW by 2017 if India’s economic output 

continues to grow at an average of 8 per cent over the next 10 years. 

The frequent power shortages and fluctuations in voltage and frequency are due to 

low performance of existing equipment and insufficient investment in new capacity. 

Distribution is the weakest part of the power supply chain in India. Losses of elec- 





TABLE 8.1: Electric power consumption 

(kWh per capita) 

2005 2006 2007 2008 March 

2009 

2012 

476 503 531 560 612 1,000 

Source: World Bank Group, “World Development 

Indicators”, 2008; International 

Energy Agency (IEA), “World Energy Outlook 

2007”, 2007 

44


tricity due to theft and technical factors remain high, averaging around 32 - 35 per 

cent of total generation. Because of poor bill collection, around 40 - 60 per cent of 

the total potential revenue is lost. The central and state authorities have made some 

progress recently in improving payment discipline, reforming the regulatory framework 

and strengthening efforts to improve the financial performance of the State 

Electricity Boards (SEB) and other publicly owned power companies to reduce their 

financial losses. 3 

These problems affect both, poor and relatively better-off states. According to the 

Associated Chambers of Commerce and Industry of India, 61 per cent of small and 

medium sized industries across the country have to operate on generators with massive 

losses in the resultant production. Such unscheduled power cuts also cause considerable 

inconvenience to households. Poor reliability has led some consumers to 

install generators as a backup. The demand for generators, inverters and batteries is 

increasing by an estimated 20 - 25 per cent per year only in Delhi. 

As part of its present 11 th five-year plan (2007 - 2012), the Government of India has 

committed itself to a mission titled “Power for all by 2012”. It calls for 78.5 gigawatts 

(GW) of new electric power to be generated which will grow to a total of 200 GW. 

This would increase the per capita availability of energy from 704 to 1,000 units. 

Further, the government aims to link the current regional grids, so that power generation 

capacity can be used more efficiently. The north eastern region has abundant 

hydropower resources and the eastern and central states have huge coal reserves. 

However, the main centres of demand are on the coast in the west and south, and in 

the Delhi region. 

Increased transmission capacity would ease the tight electricity supply situation 4 , 

This is why the government intends to increase the inter-regional transmission capacity 

from 17,000 MW at present to 37,000 MW. Simultanuously, the government 

has set a target of reducing losses to 20 per cent. And, finally, under the Rajiv Gandhi 

Grameen Vidyutikaran Yojna, a scheme of the Ministry of Power (MoP), 120,000 

villages shall be electrified. 

In order to meet this ambitious target, India’s government knows it will have to do 

both: improve and expand the country’s existing supply of energy. For both fields of 

activities, more co-operations will have to be developed with domestic and international 

organisations, both private and public. These co-operations will require commercial 

as well as technological involvement of all parties. 

The role of non-governmental organisations and advocacy groups 

There are uncountable non-governmental organisations (NGOs) and advocacy groups 

that are pushing government offices, agencies and companies as well as private businesses 

to take bolder steps towards renewable energy and clean energy technologies. 

Many of these organisations and groups also define themselves as watchdogs, intervening 

whenever they suspect anyone of violating laws that protect the environment 

or define standards for energy. 

Most of these organisations and groups oppose the development of further coal-fired 

thermal power plants because energy generated in this way pollutes air, land and 





45


water. They are also quite critical about building dams because such projects usually 

displace people and damage natural habitat. The Narmada Bachao Andolan, an 

Indian NGO, mobilised tribal people, farmers, environmentalists, human rights activists 

and celebrities against the Sardar Sarovar Dam that was being built across the 

Narmada river in the state of Gujarat. The movement gained international attention, 

partly because famous Indian personalities participated, but success was limited. 

The planning and construction of nuclear power plants is another field of agitation. 

Greenpeace India, one of the most prominent groups, is demanding that Prime Minister 

Manmohan Singh put in place a National Renewable Energy Bill no later than 

2010. This would enable a shift towards a more sustainable energy pathway. 

Primary energy demand 

Primary energy demand is expected to increase sharply, primarily because 

both India’s population and economy are projected to further 

grow significantly. Coal is expected to remain the dominant fuel in India’s 

energy mix. Demand for oil will continue to increase, keeping the 

country vulnerable to international price spurts and potentially unreliable 

supplies. Nuclear and hydropower as well as gas will also grow, but 

at lower volumes. Biomass and other renewables (mainly wind power) 

are expected to grow significantly, albeit from a relatively low baseline. 

Coal 

India’s energy sector - and thus its economy - relies heavily on coal. The 

country has vast coal reserves, but most of them are of low quality. Coal 

India Ltd., a government-owned company based in Kolkata (state of West Bengal), 

produces 84 per cent of domestic coal and employs some 450,000 workers. It is 

the second largest national employer after the railways industry. Singareni Collieries 

Company Ltd, another government-owned coal mining company based in Hyderabad 

(Andhra Pradesh), accounts for another 9 per cent of production. The remaining 

7 per cent is shared between domestic private sector companies. 5 India imports 

about 12 per cent of its total coal demand. India is the world’s third-largest coal user, 

after China and the United States of America. About 39 per cent of total primary 

energy demand is covered by coal, delivering about 70 per cent of India’s total electricity 

output. Hence, the coal sector has a large influence on the performance of the 

electricity and other downstream sectors. 

According to the Indian Ministry of Coal and Mines, 38 coal fields with mineable coal 

reserves with more than 2.8 billion tonnes have been identified and are in the process 

of being allocated for captive mining. Tapping these reserves may require capital 

investments of around USD 1.5 - 2 billion (approx. CHF 1.6 - 2.1 billion). Because 

coal has historically been a well accepted source of primary energy in India, the government 

wishes to expand the usage of coal for generating energy. To this end, the 

government is trying to attract domestic as well as foreign investors. However, the 

high degree of government holdings and regulation in the coal sector result in extremely 

restrictive competition. This in return discourages private participation. 

Coal prices are set by long term negotiation and calculated based on the cost-plus 

method (cost of the product plus a mark-up amount, rather than a percentage). As a 




TABLE 8.2: Primary energy demand (million 

tonnes of oil equivalent, Mtoe) 

1990 2000 2005 2015 2030 

Coal 106 164 208 330 620 

Oil 63 114 129 188 328 

Gas 10 21 29 48 93 

Nuclear 2 4 5 16 33 

Hydro 6 6 9 13 22 

Biomass 133 149 158 171 194 

Other renewables 0 0 1 4 9 

Total 320 459 537 770 1,299 

Source: International Energy Agency (IEA), “World 

Energy Outlook 2007” 2007 

46


result, the monopoly coal firm has no incentive to increase productivity. Nevertheless, 

the Ministry of Coal estimates that India will need to import around 50 million 

tonnes of high-quality thermal coal by the end of the 11 th five-year plan (2007 

- 2012). 

Although the coal sector was nationalised in the early 1970s, private sector companies 

have been allowed to mine coal for their own consumption since the early 1990s. 

In practice, only a few captive mines have started production because, for example, 

a steel plant may not want to mine coal as it is an activity clearly outside its expertise. 

Also, a captive mine that wishes to sell surplus coal can only do so to government-owned 

Coal India, which sets the price. If coal is sold in this way, it usually has 

to be transported by another government-owned company, Indian Railways, which 

charges excessive transport charges. 6 

Oil 

India covers about a quarter of its total primary energy demand with oil. This is 

more than twice as much than in 1990. With indigenous oil reserves limited to an 

estimated 700 million metric tons, the country is a large importer of this fossil fuel. 

In 2006, India imported 111 metric tonnes of crude oil (around 70 per cent of total 

required volume) and consumed about 3 per cent of world oil supply. 7 

In spite of its growing dependence on imported crude oil, the Government of India 

allows full private participation under its New Exploration Licensing Policy (NELP). 

A series of bidding rounds were successfully completed in 2006, and upstream exploration 

and production has attracted a number of private investors. In addition, 

India wishes to further exploit its potential in the refining sector. Already today, India 

is a net exporter of petroleum products. 

Gas 

India covers only around 5 per cent of its total primary demand with gas. In the past, 

indigenous gas reserves were believed to be quite limited. However, in 2002 first 

gas reserves were discovered in the Krishna-Godavari basin off the coast in Andhra 

Pradesh state. Further drillings in following years have shown that the gas reserves 

are likely to be to the tune of 700 billion cm 2 . 8 

Thanks to these discoveries the potential for liquefied natural gas (LNG) is likely to 

improve. Before the gas reserves in the Krishna-Godavari basin were found, neither 

public nor private companies were able to build a business case for using LNG. Technology 

was expensive and had to be imported, and processes were not established. 

LNG had to be imported, for example from Qatar and accounted for 17 per cent of 

total gas demand in 2005. 

The International Energy Agency (IEA) believes that India on the one hand will have 

to increase LNG imports in the coming years, for which new terminals are being 

built. On the other hand, India is set to produce LNG thanks to its own reserves. 

In addition, the potential for coal bed methane appears to be promising but needs to 

be developed. 


7 Ministry of Petroleum and Natural Gas, India, 2009; International Energy Agency (IEA), “World Energy Outlook 2007”, 2007 




47


Nuclear 

As of 2008 India had 17 nuclear power plants in operation, generating 4,120 MW of 

electricity (or 3 per cent of the country’s energy needs). India stands 9 th in the world 

in terms of number of operational nuclear power reactors and is constructing 9 more. 

This will increase the contribution of nuclear power to overall electricity generation 

capacity from 4.2 per cent to 9 per cent by the year 2034 (or 63,000 MW), which 

ultimately means that India would have to build 40 new reactors, costing USD 80 

billion (approx. CHF 85 billion). 9 Already in 2010, India‘s installed nuclear power 

generation capacity will increase to 6,000 MW. 

This boost came after a decline of more than 12 per cent in nuclear power between 

2006 and 2008. After a waiver from the Nuclear Suppliers Group in September 2008, 

India was allowed to commence international nuclear trade and has since then signed 

nuclear deals with several countries including Canada, France, Kazakhstan, United 

Kingdom and the United States of America. In early 2009 India signed an agreement 

with the International Atomic Energy Agency (IAEA), allowing the United Nations 

to oversee most of of India’s civilian reactors by 2014. With the signing of the agreement, 

India entered a deal worth USD 700 million (approx. CHF 740 million) with 

Russia, from where India will purchase 2,000 tonnes of nuclear fuel. 

Hydro 

In India’s energy portfolio today, hydropower accounts for 26 per cent of total power 

generation. According to the Indian Ministry of Power (MoP), the country has an assessed 

hydropower potential of delivering about 150,000 MW. But only about 20 per 

cent has been harnessed so far. The government wants to add 45,000 MW of hydro 

capacity by 2020 (mainly in the north and north-east of India), for which private 

participation in the hydro sector will be important. One of the government’s overall 

objectives is an optimum power system mix at 40 per cent from hydropower and 60 

per cent from other sources. 

Renewable 

According to the Ministry of New and Renewable Energy (MNRE) the current installed 

capacity of renewable energy is around 13,451 MW. This constitutes only 

about 8 per cent of India’s total installed generation capacity. 10 

India has vast potential for renewable energy sources, especially in areas such as 

wind power, biomass and solar power. The contribution of wind energy has been 

steadily increasing since the 1990s 11 . India is now the fourth largest in the world in 

terms of wind energy installation. 

It is estimated that about 120 to 150 million metric tonnes of agricultural-based 

biomass and waste are available in India each year. These agricultural and forestry 

residues correspond to a potential of 16,000 MW. 12 In the area of solar power, technological 

breakthroughs for cost-effective photovoltaic technology would generate 

a quantum leap in the renewable energy sector as India is well endowed with high 

solar insolation (average of 6 kWh per m 2 per day). 

Additionally, if one classifies coal bed methane, natural gas and nuclear power to be 

forms of clean energy (by the use of appropriate technology), the potential to harness 

clean or renewable energy should be even bigger. 

9Wharton University of Pennsylvania, USA, 2009 

10Central Electricity Authority (CEA), India, 2008 & 2009 

11International Energy Agency (IEA), “World Energy Outlook 2007”, 2007 

12Government of India (GoI), India Development Gateway, India, 2009 



48


Final Energy Demand 

Industry Sector 

According to the International Energy Agency (IEA), energy demand in India’s industrial 

sector accounted for 28 per cent of final energy demand in the year 2005 and 

is projected to take a share of 34 per cent by the year 2030. The IEA believes that 

growth will be moderate because the end-use efficiency will improve. 

Half of today’s total industrial energy demand is consumed by the iron and steel, 

chemical and petrochemicals, non-metallic and other minerals, food, paper and textile 

industries. These industries are expected to continue to be the main drivers of 

industrial energy demand. Coal and electricity are expected to stay the main fuels 

used in industry, mainly for steel and cement production. The share of natural gas 

will remain unchanged. Much of Indian industrial output is derived from small scale, 

often village-based enterprises which are fuelled by inefficient motors and equipment. 

It is difficult to implement efficiency improvements there because of the very 

small scale and high number of installations. But the scope for such improvements 

is enormous. 

Transport Sector 

The number of vehicles on the road is the principal determinant of fuel demand for 

transport in India. The total vehicle stock in India increased from 19 million in 1990 

to 68 million in 2004, and is projected to reach 295 million by 2030. This rapid 

expansion is likely to happen because of the country’s economic development and 

rising household incomes. There are currently 13 passenger cars per 1,000 people in 

India. The IEA estimates that this ratio will grow to 93 vehicles per 1,000 people by 

the year 2030. Of the total vehicle stock, however, 80 per cent are two-wheelers as 

they are the first step on the ladder to increased personal mobility. They are cheaper 

than cars and well suited to congested cities with poor public transport services. 

Their share in the total vehicle stock is likely to diminish only slightly. 

Road vehicles account for 86 per cent of the total transport energy demand in 2030. 

Aviation takes a share of 9 per cent and railways most of the rest. These shares will 

remain fairly constant in the coming years. In summary, India’s transport sector will 

take a share of final energy of 20 per cent by the year 2030, up from 10 per cent in 

2005. Measured in oil consumption, transport will consume 47 per cent of India’s oil 

demand in 2030, up from 27 per cent in 2005. 

Residential Sector 

The residential sector in India takes a share of 44 per cent of the country’s total final 

energy demand, which is projected to decrease to 29 per cent by the year 2030. This 

trend will be driven by a combination of continuing urbanisation, higher household 

incomes and availability of energy efficient products. 

These factors progressively reduce people’s reliance on traditional biomass such as 

fuel wood, agricultural waste or dung. While today, 79 per cent of residential energy 

demand is covered through the use of biomass resources, more efficient fuels such as 

liquefied petroleum gas (LPG), kerosene, gas and electricity are gaining importance 

mainly in urban areas. 



TABLE 8.3: Sector-wise final 

energy demand, average annual 

growth rate 

2005 2030 

Industry 28% 34% 

Transport 10% 20% 

Residential 44% 29% 

Other 18% 17% 

Total 100% 100% 

Source: World Energy Outlook 2007, 

International Energy Agency 

49


The most rapid growth is seen in the use of electricity. Lighting accounts for about 70 

per cent of electricity use in the urban residential sector. Refrigeration and air conditioning 

account for almost all the rest. Most high income urban households have a 

backup diesel generator which runs at least a few hours every day due to power outages. 

But because 70 per cent of India’s population lives in rural areas, biomass will 

continue to be the primary fuel in households there. 

Other Sectors 

The services sector accounted for 3 per cent of total final energy consumption in 

2005 and is estimated to rise to at least 4 per cent as this sector is growing rapidly. 

Today, half of this sector’s energy needs are met by biomass fuels, mostly in community 

centres, schools and hospitals. However, by the year 2030 electricity is likely to 

take a share of 67 per cent of the total. Most of this electricity will be used in hotels, 

commercial establishments, residential complexes and shopping malls. Personal 

computers will also drive energy consumption. Today, only 1.2 computers are in use 

per 100 people in India (in comparison: 4.1 in China, 4.5 in Philippines, and 19.2 in 

Malaysia; Switzerland: 81). In the services sector, diesel generators are widely used 

by businesses to cope with India’s chronic power outages. 

India’s agricultural sector accounts for another 4 per cent of final energy demand. 

Here, electricity is used mainly to operate irrigation pumps, while oil is used to run 

tractors and other machinery. 

Governmental dominance 

Today’s installed capacity is dominated by the central or state governments which 

own 83 per cent of all companies in the energy sector. Further, the central government 

has exclusive responsibility for high-voltage bulk interstate transmission, 

through Powergrid, a public company. Transmission within states is in the hands 

of state transmission utilities. The 17 per cent that are in private ownership are held 

and operated by industrial automotive producers and independent power producers 

(IPP). 13 

The erstwhile vertically integrated State Electricity Boards (SEB) have been riddled 

with inefficiencies due to a lack of accountability and administrative bottlenecks. 

State electricity companies generally provide well below optimal levels of production. 

Operational inefficiency and financial losses often lead to poor quality of supply 

and underinvestment. The objective of the state companies has, in most cases, been 

to extend the coverage of the electricity network to rural villages, even though they 

have been in most cases unable to provide a regular power supply. Basic low-level 

investment in distribution systems was neglected and electricity theft is widespread. 

Aggregate technical and commercial losses of electricity from the system have been 

extremely high and have only fallen from 39 per cent to 35 per cent between 2002 

and 2007. The combined losses of the SEBs are estimated to be around 0.6 per cent 

of the country’s GDP. 14 

From a pro state interventionist perspective, the socio-economic importance of the 

government’s control over the energy sector should not be underestimated. After all, 

almost one million people are employed by the central or state governments in the 

supply of electricity, gas and water. 15 



15 Ministry of Statistics and Programme Implementation, “India in Figures”, India, 2007 



50


In recurring responses, the government of India has been introducing policies and 

reforms, primarily aimed at improving the performance of state owned companies 

and establishing an environment conducive to private investment. In 2003, an Electricity 

Act was issued to deepen the reform process by enabling competition in the 

wholesale electricity market and retail electricity supply. Based on the new policy 

framework, 13 SEBs have so far been unbundled into separate generation, transmission 

and distribution companies under the holding structure of the respective SEBs. 

State Electricity Regulatory Commissions (SERC) have been set up in all states and 

have started to ensure that tariffs are set on commercial principles, independent of 

political interference, and transparent. The regulatory challenge is to provide incentives 

for improvement in technical efficiency and financial performance. 

Subsidisation 

For consumers, prices have typically been held below cost or electricity is provided 

without a meter. Three states, namely Punjab, Andhra Pradesh and Tamil Nadu, are 

giving free power to farmers. In other states, farmers are being charged subsidised 

tariffs. Overall, gross subsidies to agricultural and domestic consumers have been 

falling slightly from 1.5 per cent of GDP in 1995 to just less than 1.25 per cent in 

2005. Direct subsidies from the state government budgets amount to 0.4 per cent 

of GDP, with the remainder coming from excess payments by industrial and commercial 

customers as well as enterprise losses. All this uncompensated subsidisation 

results in lower revenues for the state government electricity companies and reduces 

their ability to invest and increase supply. 16 

Consumption 

India is the world’s 6 th largest energy consumer, accounting for 3.4 per cent of global 

energy consumption. The per capita consumption of power in India has gone up 

significantly since the year 2000. In March 2009, the per capita power consumption 

stood at 612 kWh and is estimated to grow even more rapidly during the present five 

-year plan’s span. 




51


TABLE 8.4: Total installed capacity (in MW) 

Region 

Ownership 

Thermal 

Coal Gas 

Oil & 

Diesel 

Total 

Thermal 



Nuclear Hydro 

Renewables 

Total 

Supply 

deficit 

Population 

North State gov. 11,817.50 1,219.20 12.99 13,049.69 0.00 7,141.15 648.82 20,839.66 

Private 0.00 0.00 0.00 0.00 0.00 786.00 1,117.55 1,903.55 

Central gov. 7,050.00 2,311.99 0.00 9,361.99 1,180.00 5,498.00 0.00 16,039.99 

38,783.20 -10.7% 29.9% 30.75% 

West State gov. 15,642.50 1,430.72 17.28 17,090.50 0.00 5,484.50 330.87 22,905.87 

Private 3,290.00 1,658.00 0.20 4,948.20 0.00 444.00 3,692.75 9,084.95 

Central gov. 6,470.00 3,512.00 0.00 9,982.00 1,840.00 1,520.00 0.00 13,342.00 

45,332.82 -13.5% 22.42% 28.93% 

South State gov. 8,282.50 795.60 362.52 9,440.62 0.00 10,724.18 864.40 21,029.20 

Private 510.00 2,500.50 576.80 3,587.30 0.00 0.00 6,183.50 9,770.80 

Central gov. 7,890.00 350.00 0.00 8,240.00 1,100.00 0.00 0.00 9,340.00 

40,140.00 -0.9% 21.79% 19.36% 

East State gov. 6,795.00 100.00 17.06 6,912.06 0.00 3,219.93 227.36 10,359.35 

Private 1,441.38 0.00 0.14 1,441.52 0.00 0.00 0.05 1,441.57 

Central gov. 8,210.00 90.00 0.00 8,300.00 0.00 714.00 0.00 9,014.00 

20,814.92 -2.6% 19.49% 10.52% 

North 

East 

State gov. 60.00 366.50 142.74 569.24 0.00 256.00 170.98 996.22 

Private 0.00 24.50 0.00 24.50 0.00 0.00 0.02 24.52 

Central gov. 0.00 375.00 0.00 375.00 0.00 860.00 0.00 1,235.00 

2,255.74 -8.6% 6.36% 10.19% 

Islands State gov. 0.00 0.00 50.02 50.02 0.00 0.00 5.25 55.27 

Private 0.00 0.00 20.00 20.00 0.00 0.00 0.86 20.86 

Central gov. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

76.13 n.a. 0.04% 0.25% 

All 


State gov. 42,597.50 3,912.02 602.61 47,112.13 0.00 26,825.76 2,247.68 76,185.57 

Private 5,241.38 4,183.00 597.14 1,0021.52 0.00 1,230.00 10,994.73 22,246.25 

Central gov. 29,620.00 6,638.99 0.00 36,258.99 4,120.00 8,592.00 0.00 48,970.99 

Total 77,458.88 14,734.01 1,199.75 93,392.64 4,120.00 36,647.76 13,242.41 147,402.81 -8.4% 100% 100% 

Sources: Central Electricity Authority (CEA), as on 31 December 2008, India, 2008; Ministry of Home Affairs, Office of the Registrar General of 

India, 2009; Punjab State Planning Board, Government of Punjab, India, 2009 

Area 

52

Chapter 9: Clean energy India: status and potential 

Clean energy in India: status and potential 

Introduction 

India is a country with tremendous resources to generate clean energy, a poor track 

record of doing so, but a great opportunity to seize the full potential. 

India has a supply deficit of around 10 per cent against its total installed capacity of 

147 GW. Because the demand for power is expanding rapidly, the Government of 

India plans to add a capacity of over 100,000 MW by the year 2012. Although this is 

mainly based on growth of thermal generation, the contribution of electricity from 

renewable sources is expected to increase, with wind energy continuing to lead the 

way. Whether the demand-supply gap will diminish or not is a question almost impossible 

to answer today. 

The importance of renewable energy was recognised in India in the 1970s. As a result, 

the Government of India established the Department of Non-Conventional Energy 

Sources in 1982 which was upgraded to become the Ministry of Non-Conventional 

Energy Sources in 1992, and renamed to Ministry of New and Renewable Energy 

(MNRE) in late 2006. The MNRE facilitates the implementation of broad spectrum 

programmes including harnessing renewable power, renewable energy to rural areas 

for lighting, cooking and motive power, use of renewable energy in urban, industrial 

and commercial applications as well as development of alternate fuels and applications. 

In addition, it supports research, design and development of new and renewable 

energy technologies, products and services. 

The fact that the Government of India has a separate ministry dedicated to promoting 

renewable energy testifies the level of attention which the Indian administration 

puts into this matter. 1 This seriousness is further reflected in a recent statement by 

India’s Minister of Finance, Pranab Mukherjee: “It is imperative that the contribution 

of new and renewable energy sources of power is enhanced if we have to successfully 

combat the phenomena of global warming and climate change”. 2 

In 2002 India acceded to the Kyoto Protocol and has since then become more active 

in global climate change negotiations. Although India has not yet committed to 

specify its greenhouse gas emissions, the government is encouraging projects under 

the clean development mechanism (CDM). CDM activity in India is second only to 

that of China. According to the International Energy Agency (IEA), India may expect 

emissions reductions from CDM projects of about 54 metric tonnes of carbon dioxide 

(CO 2 ) equivalent per year between 2008 and 2012. Almost 75 per cent of these 

reductions may be realised thanks to energy-related projects with a focus on renewable 

energy (20 metric tonnes of CO 2 equivalent), energy efficiency (12 metric tonnes 

of CO 2 equivalent) and fuel switching (7 metric tonnes of CO 2 equivalent). 

Most of these projects are being developed by Indian companies, while the main 

buyers of credits worldwide are industrial companies and power generators, both in 

the European Union, where they are covered by the EU Emissions Trading Scheme, 

and in Japan, which has a voluntary trading system. 


2 Ministry of Finance (MoF), Budget 2009-2010, Speech of Pranab Mukherjee, Minister of Finance, India, July 6, 2009 



53


In its Integrated Energy Policy Report, the Planning Commission of the Government 

of India has highlighted the need to maximally develop domestic supply options and 

diversify energy sources. Like this, it plans to secure the availability of sustainable 

energy. According to the central government’s present 11 th five-year plan, the share 

of power generated through renewable energy sources in the overall installed capacity 

should increase sharply. This should not only improve India’s problem to supply 

energy but involve socio-economic benefits, particularly in rural, tribal and remote 

areas. 

So far, India’s main achievements in the renewable energy sector have been in developing 

wind power, solar energy (thermal and photovoltaic), biomass and small 

hydropower. 

National Action Plan on Climate Change 

In June 2008 the Government of India launched its National Action Plan on Climate 

Change (NAPCC). The government pledges that the per capita greenhouse gas 

emissions “will at no point exceed that of developed countries even as we pursue our 

development objectives.” To this end, the plan identifies eight core “national missions”: 

1. National solar mission 

- Promote the development and use of solar energy for power generation and 

other uses, with the ultimate objective of making solar power competitive with 

fossil-based energy options 

- Establish a solar research centre 

- Increase international collaboration on technology development 

- Strengthen domestic manufacturing capacity 

- Increase government funding and international support 

2. National mission for enhanced energy efficiency 

- Yield savings of 10,000 MW by the year 2012 

- Decrease energy consumption in large energy-consuming industries, with a 

system for companies to trade energy savings certificates 

- Reduce taxes on energy-efficient appliances 

- Finance public-private partnerships to reduce energy consumption through demand-side 

management programmes in the municipal, buildings and agricultural 

sectors 

3. National mission on sustainable habitat 

- Promote energy efficiency as a core component of urban planning 

- Extend the existing Energy Conservation Building Code 

- Emphasise urban waste management and recycling, including power production 

from waste 

- Strengthen the enforcement of automotive fuel economy standards and use 

pricing measures to encourage the purchase of efficient vehicles 

- Introduce incentives for the use of public transportation 



54


4. National water mission 

- Improve water use efficiency by 20 per cent through pricing and other measures 

5. National mission for sustaining the Himalayan ecosystem 

- Conserve biodiversity, forest cover and other ecological values in the Himalayan 

region where glaciers that are a major source of India’s water supply are 

projected to recede because of global warming 

6. National mission for a “green India” 

- Forestation of 6 million hectares of degraded forest land 

- Expand forest cover from 23 per cent to 33 per cent of India’s territory 

7. National mission for sustainable agriculture 

- Support climate adaptation in agriculture through the development of climateresilient 

crops, expansion of weather insurance mechanisms and agricultural 

practices 

8. National mission on strategic knowledge for climate change 

- Gain a better understanding of climate science, impacts and challenges 

- Establish a climate science research fund 

- Improve climate modelling 

- Increase international collaboration 

- Encourage private sector initiatives to develop adaptation and mitigation technologies 

through venture capital funds. 

In order to create a supportive environment for interested organisations from the 

private sector, the Government of India has lined out a set of fiscal incentives as follows: 

- No industrial clearances are required for setting up a company involved in renewable 

energy 

- No clearance is required from the Central Electricity Authority (CEA) for energy 

generation projects up to an investment volume of INR 1 billion (approx. CHF 22 

million) 

- A five-year tax holiday is allowed for renewable energy power generation projects 

- 100 per cent depreciation in the first year; accelerated 80 per cent depreciation on 

specified projects 

- Soft loans are available through the Indian Renewable Energy Development 

Agency (IREDA) for renewable energy equipment manufacturing 

- Financial support is available to renewable energy industries for research & development 

projects in association with technical institutions 

- Import of power projects are allowed 

- Customs duty concession is available for certain renewable energy spare parts and 

equipment 

- Excise duty on a number of capital goods in the renewable energy sector has been 

reduced or exempted 

- 50 per cent subsidy is available on energy projects based on urban waste. 




55


In this chapter, the energy areas of biomass, solar power (thermal and photovoltaic), 

wind power, geothermal power, hydropower, ocean power, energy efficiency, transportation, 

and architecture & building are discussed individually. In order to provide 

a varied picture, information and data from the Indian Ministry of Power (MoP, or 

its sister organisations and agencies), the International Energy Agency (IEA), and 

Greenpeace India are represented. 

While all these organisations agree that India will require much more energy in 

the coming decades and that the share from renewable sources will have to grow, 

Greenpeace India believes that renewable energy should and can play a far greater 

role than the other organisations. In fact, it believes that if renewable energy is 

emphasised more than planned, India’s demand-supply gap can be narrowed to a 

greater extent, its dependency of fossil fuels (and their partial imports) diminished, 

and India’s CO 2 emissions decreased. 

TABLE 9.1: Energy development potential (in gigawatts) 


7 Ministry of Petroleum and Natural Gas, India, 2009; International Energy Agency (IEA), “World Energy Outlook 2007”, 2007 


Gov/ 

IEA 



2010 2020 2030 2040 2050 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Total generation 207 208 398 406 647 763 954 1,313 1,339 2,050 

Fossil 147 147 286 234 475 367 723 410 1,048 391 

Coal 112 112 215 180 354 228 556 212 841 157 

Lignite 3 3 7 2 12 1 19 1 31 0 

Gas 21 21 52 48 97 137 122 197 143 234 

Oil 11 11 13 4 13 1 26 0 33 0 

Diesel 0 0 0 0 0 0 0 0 0 0 

Nuclear 4 4 13 7 21 6 29 3 37 0 

Renewables 56 56 99 165 150 390 202 899 253 1,659 

Biomass 1 1 2 8 5 19 7 41 10 70 

Hydro 44 44 70 73 104 80 138 80 171 80 

Wind 11 11 24 69 34 143 44 200 56 224 

ST 0 0 0 3 0 23 0 70 0 151 

PV 0 0 3 10 7 116 11 485 16 1,093 

Geothermal 0 0 0 2 0 6 0 18 0 30 

Ocean 0 0 0 1 0 3 0 5 0 11 

Fluctuating RES (PV, wind, ocean) 11.8 12 26.2 80 41.4 263 56.5 691 71.8 1,328 

Share of fluctuating RES 5.7% 5.7% 6.6% 19.7% 6.4% 34.5% 5.9% 52.7% 5.4% 64.8% 

RES share 27.2% 27.2.% 24.9% 40.7% 23.2% 51.1% 21.1% 68.5% 18.9% 80.9% 

Legend 

Gov: Indian Ministry of Power (MoP, or its sister organisations and agencies) 

IEA: International Energy Agency (IEA) 

RES: Renewables 

ST: Solar thermal 

PV: Solar photovoltaic 

Sources: Ministry of Power (MoP), India, 2009; International Energy Agency (IEA), 2007; Greenpeace India, India, 2009 

56


Biomass 

Status 

Of its 2,971,000 square kilometres total area (excluding 120,849 square kilometres 

of disputed territories with Pakistan and China), 56 per cent are arable and used for 

agriculture. Hence, agriculture is the predominant occupation in India, accounting 

for about 60 per cent of employment. 

Agricultural-based mass that can be used to generate energy is widely and easily 

available. The most common sources of biomass are agricultural residues such as 

rice hulls, straw, bagasse from sugarcane production, wood chips, coconut shells, 

charcoal, dried dung and energy crops such as sugarcane or switch grass. These 

sources account for about 90 per cent of the total fuel used in rural households, 

mainly for cooking and heating. 

The development of biomass gasification has received a lot of 

attention in India. The Ministry of New and Renewable Energy 

(MNRE) has been implementing a dedicated biomass 

power and cogeneration programme since the mid-nineties. 

Biomass research centres and gasifier action research centres 

were established at various locations all over the country. 

These institutions have been playing a key role in developing 

and adapting (partly foreign made) suitable technologies to 

promote extended use of biomass for generating energy. 

The most popular way of converting biomass to energy is combustion. 

In India cogeneration is mainly applied in industries, 

to a very large extent in sugar mills. 

Most of the equipments required for setting up biomass 

projects can be procured from local developers and manufacturers. 

Almost all steam turbine combinations are available 

domestically, with efficiencies comparable to the best in the 

world and full after sales service. Many foreign companies 

have set up manufacturing and service facilities in India, recognising 

the growing market size for their technology there. 

Certain critical control equipment (e.g. pollution control systems) 

and high efficiency turbines usually need to be imported. 


2 Ministry of Finance (MoF), Budget 2009-2010, Speech of Pranab Mukherjee, Minister of Finance, India, July 6, 2009 



TABLE 9.2 

Capital cost Estimated cost 

(USD per kW) of generation 

(USD per kWh) 

Biomass 

800 - 1,000 0.045 - 0.07 

Bagasse co-generation & 

biomass gasification 

600 - 800 0.045 - 0.047 


100 - 200 0.08 - 0.15 

Source: Government of India, 

Planning Commission, Integrated 

Energy Policy, India, 2006 

TABLE 9.3: Biomass energy and waste-to-energy technologies, 

energy output forms and present maturity levels 

Technology Energy output 

Biomass 

Maturity level 

Combustion (domestic) - Heat - Widely applied 

Combustion (industrial) - Process heat 

- Steam 

- Widely applied 

Gasification for power - Electricity 

- Heat 

- Demonstration phase 

Gasification and fuel 

production 

- Hydrocarbons 

- Methanol 

- Hydrogen 

- Development phase 

Hydrolysis (fermentation) - Ethanol - Commercially applied 

for sugar crops 

- Production from wood 

under development 

Pyrolysis (production of 

liquid fuels) 

Pyrolysis (production of 

solid fuels) 

- Bio oils - Pilot phase 

- Some technical barriers 

- Charcoal - Widely applied 

- Wide range of efficiencies 

Extraction - Bio diesel - Applied 

- Relatively expensive 

Digestion - Bio gas - Commercially applied 


Combustion - Heat 

- Electricity 

Source: Swiss Business Hub India, India, 2009 

- Commercially applied 

- Small and large scale 

applications 

TABLE 9.4: Development potential for biomass energy (in gigawatts) 

2010 2020 2030 2040 2050 

Gov/ Green- Gov/ Green- Gov/ Green- Gov/ Green- Gov/ Green- 

IEA peace IEA peace IEA peace IEA peace IEA peace 

Biomass 

Legend 

1 1 2 8 5 19 7 41 10 70 



Sources: Ministry of Power (MoP), India, 2009; International Energy Agency (IEA), 2007; 

Greenpeace India, India, 2009 

57


Potential 

The MNRE estimates that an annual volume of about 500 million 

metric tonnes of biomass are available in India today. Studies have 

shown that there is a surplus of about 120 - 150 million metric tonnes 

of biomass from agricultural and forestry residues which could be 

transformed to approximately 16,000 - 22,000 MW electricity, but 

are not being used. In addition, another 2,700 MW could be generated 

from waste-to-energy and 5,000 MW through bagasse based cogeneration 

in the country’s 550 sugar mills. However, in order to do 

so these sugar mills would need to acquire appropriate technology. 

As part of its present five-year plan (2007 - 2012), the Indian government 

plans to add a generating capacity of 500 MW through biomass 

and 1,200 MW through bagasse cogeneration. 

Biomass (including bagasse) 

- 77 per cent of the total installed capacity for generating energy from 

biomass and bagasse is located in the states of Andhra Pradesh, 

Karnataka, Tamil Nadu and Uttar Pradesh. The vast majority of 

these installations are distributed, non-grid connected generation 

projects. 

Generating energy from biomass and bagasse (combustion and cogeneration) 

is comparatively well developed in these states. 

76 per cent of the potential for biomass-based energy generation 

is said to be located in the states of Gujarat, Haryana, Madhya 

Pradesh, Maharashtra, Punjab, Rajasthan (bearing ¼ of the potential 

in these states) and Uttar Pradesh. Additional potential is 

seen in the states of Andhra Pradesh, Assam, Bihar, Chhattisgarh, 

Himachal Pradesh, Karnataka, Kerala, Orissa, Tamil Nadu and 

West Bengal. 

Generating energy from biomass is comparatively less developed in these states. 

See TABLE 9.5 for details. 

- The states of Maharashtra and Uttar Pradesh are the two major bagasse producing 

states, accounting for 57 per cent of India’s projected bagasse potential. Additional 

potential for bagasse-based cogeneration was identified in the states of 

Andhra Pradesh, Bihar, Gujarat, Punjab and Haryana. 

Generating energy from bagasse is comparatively less developed in these states. 




TABLE 9.5: National biomass power estimation, by 

state 

State 

Biomass 

generation 

(mt/y) 

Biomass 

surplus 

(mt/y) 

Power 

potential 

(GW) 

Andhra Pradesh 8.3 1.2 0.15 

Assam 6.9 1.4 0.16 

Bihar 20.4 4.3 0.53 

Chhattisgarh 10.1 1.9 0.22 

Goa 0.8 0.1 0.15 

Gujarat 24.2 7.5 1.01 

Haryana 26.2 9.8 1.26 

Himachal Pradesh 2.7 1.0 0.13 

Jammu & Kashmir 1.2 0.2 0.03 

Jharkhand 2.2 0.6 0.07 

Karnataka 23.8 6.4 0.84 

Kerala 9.4 5.7 0.76 

Madhya Pradesh 26.5 8.0 1.06 

Maharashtra 36.8 11.8 1.50 

Manipur 0.3 0.0 0.00 

Meghalaya 0.0 0.0 0.0 

Nagaland 0.1 0.0 0.0 

Orissa 5.4 1.2 0.15 

Punjab 46.3 21.3 2.67 

Rajasthan 204.9 35.5 4.59 

Tamil Nadu 16.0 6.7 0.86 

Uttar Pradesh 50.4 11.7 1.48 

Uttaranchal 0.2 0.1 0.0 

West Bengal 23.3 3.0 0.37 

Total 546.4 139.4 18.0 

Legend 

mt/y: Million tonnes per year 

GW: Gigawatt 

Source: Ministry of New and Renewable Energy 

(MNRE), India, 2009 

TABLE 9.6: Bagassebased 

cogeneration 

potential, by state 

State 

Potential 

(MW) 

Andhra Pradesh 200 

Bihar 200 

Gujarat 200 

Karnataka 300 

Maharashtra 1,000 

Punjab 150 

Tamil Nadu 350 

Uttar Pradesh 1,000 

Others 100 

Total 

Legend 

MW: Megawatt 

3,500 

Source: Confederation of 

Indian Industry (CII), India, 

2007 

58


- The states of Karnataka, Maharashtra, Uttar Pradesh and Tamil Nadu have the 

highest density of sugar mills, their capacity being 2,500 tonnes of cane crushed 

per day. 

Cogeneration is comparatively less developed in these states. 


- As far as non-sugar-based industries are concerned, COGEN Europe and the Tata 

Energy Research Institute (TERI) estimate the total combined heat and power 

(CHP) potential to be over 10,000 MW. The main industries which could make 

use of this cogeneration potential are paper, cotton textile, caustic soda, fertilizers, 

iron and steel, refi neries, rice mills, man-made fi bres, cement, sulphuric acid and 

aluminium. 

Cogeneration is comparatively less developed in these industries. 

- The Government of India identifi ed ethanol and biodiesel as key focus areas to 

substitute or add to fuels from fossil resources. However, neither ethanol nor 

biodiesel have matured to bear commercial potential although the government 

mandated in 2004 that gasoline be blended with 5 per cent of ethanol in certain 

cases. In addition, a National Biodiesel Board was created to promote, fi nance 

and support organisations that are engaged in oilseed cultivation and oil processing, 

so that the production of biodiesel would be promoted. The states of Andhra 

Pradesh, Chhattisgarh, Gujarat and Tamil Nadu created state biodiesel boards 

and are implementing buy-back schemes with farmers. Private players are participating 

in the plantation phase of a biodiesel production chain in the state of Tamil 

Nadu. In the state of Gujarat, private companies are producing quality biodiesel 

(that meets USA standards). Motor companies like Mercedes are trial-running 

cars on biodiesel generated from Indian resources. 


- The states of Andhra Pradesh, Haryana, Gujarat, Karnataka, Maharashtra, Tamil 

Nadu, Uttar Pradesh and West Bengal account for more than 53 per cent of the 

projected waste-to-energy potential. Solid waste, mainly in urban areas, is a special 

cause of concern for municipal authorities. While a majority of solid waste in 

rural areas is recycled, in urban areas these are dumped in non-managed open 

dumps and landfi lls. Between 50 - 90 per cent of the 42 million tonnes of urban 

waste produced in India each year are collected and dumped into uncontrolled 

open landfi ll sites without sorting, with the remainder left to decompose in streets 

and drains or dumped illegally in unmanaged sites. With the rapid increase in the 

population living in urban areas, the volume of municipal solid waste is likely to 

increase considerably. As it decomposes, solid waste bears the risk of explosions. 

It emits odours as well as greenhouse gases, including methane. 

Waste-to-energy generation is poorly developed throughout the country, and particularly 

so in the states mentioned above. 

See TABLE 9.8 and CHART 9.1 for details. 




TABLE 9.7: Potential for 

cogeneration in major 

sugar producing states 

State 

Potential 

(MW) 

Andhra Pradesh 300 

Bihar 300 

Gujarat 350 

Haryana 350 

Karnataka 450 

Maharashtra 1,250 

Punjab 300 

Tamil Nadu 450 

Uttar Pradesh 1,250 

Total 

Legend 

MW: Megawatt 

5,000 

Ministry of New and Renewable 

Energy (MNRE), 

India, 2009 

TABLE 9.8: Waste-to-energy potential, 

by state 

State 

Liquid 

waste 

(MW) 

Solid 

waste 

(MW) 

Total 

(MW) 

Andhra Pradesh 16 107 123 

Gujarat 14 98 112 

Haryana 20 111 131 

Karnataka 26 125 151 

Maharashtra 37 250 287 

Tamil Nadu 14 137 151 

Uttar Pradesh 2 154 176 

West Bengal 22 126 148 

Other 55 349 404 

Total 226 1,457 1,683 

Legend 

MW: Megawatt 

Source: Confederation of Indian Industry 

(CII) India, 2007 

CHART 9.1: Total urban municipal waste 

generation (million tonnes per year) 

14.9 

1971 

25.1 

43.5 

48.5 

97 

1981 1991 1979 2025 

59


Solar 

Status 

In most parts of India clear sunny weather is experienced between 280 and 300 days 

per year. Depending on the location, the daily average solar energy incident varies 

between 4 and 7 kilowatt hours (kWh) per square meter. This results in abundant 

solar radiation at the equivalent of over 5,000 trillion kWh per year. 

Although this is far more than the total energy consumption of the country and in 

spite of the fact that the use of solar energy is on the rise, India produces only a 

negligible amount of solar energy. The high initial cost of solar energy systems is 

hampering its large-scale utilisation. The estimated unit cost of electricity from a 

grid-connected solar energy plant is between 12 and 15 Indian 

Rupees (approx. CHF 0.26 - 0.32) per unit, which is 

very high compared with the cost of between 2 to 6 Rupees 

(approx. CHF 0.04 - 0.13) per unit for conventional thermal 

energy. Because of the high initial cost, solar energy systems 

are mainly being used for stand-alone applications in lighting, 

telecommunication, small power requirements, battery 

charging, water heating and cooking. 

In the year 2008 the Government of India launched a National 

Solar Mission which aims at making the end price of solar 

energy competitive with fossil fuel based power sources. In 

July 2009 the government presented a plan to increase the 

installed capacity for solar energy. According to the plan, a 

total of 20 GW are to be generated by the year 2020, and solar 

energy should achieve grid parity. Further, solar-powered 

equipment and applications shall become mandatory in all 

government buildings. 

The government also encourages private 

companies to produce solar photovoltaic 

panels, so that the dependence 

from imports and thus initial 

costs are brought down. The Indian 

Renewable Energy Development 

Agency (IREDA) provides funds to 

financing and leasing companies that 

offer loans for the purchase of photovoltaic 

systems. Ironically, most of 

the solar panels produced in India 

are exported, mainly to Europe. In 

the year 2008 India exported solar panels which could have produced an estimated 

140 MW of energy. 

Further, the Government of India has pledged to provide 20 per cent of capital expenditure 

during the first 10 years for solar-related technology projects which are 

located in special economic zones (SEZs). For projects located outside of SEZs, 25 



TABLE 9.11: Development potential for solar energy (in gigawatts) 

Gov/ 

IEA 

2010 2020 2030 2040 2050 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

TABLE 9.9 

Capital cost 

(USD per kW) 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

ST 0 0 0 3 0 23 0 70 0 151 

PV 0 0 3 10 7 118 11 486 16 1,093 

Legend 



ST: Solar thermal 

PV: Solar photovoltaicGov: Indian Ministry of Power (or its sister organisations and agencies) 



Estimated cost 

of generation 

(USD per kWh) 

Solar thermal 

n.a. n.a. 

Solar photovoltaic 

5,000 - 6,500 0.19 - 0.40 




TABLE 9.10: Solar energy technologies, energy output forms 

and present maturity levels 


Solar energy 


Photovoltaic solar en- - Electricity - Widely applied 

ergy conversion 

- Rather expensive 

- Further development 

needed 

Solar thermal electricity - Heat - Demonstrated 

- Steam - Further development 

- Electricity needed 

Low-temperature solar - Heat - Cookers with collec- 

energy use 

- Cooking tors applied 

- Drying - Drying demonstrated 

and applied 

Passive solar energy use - Heat - Demonstrated and 

- Cooling 

- Light 

- Ventilation 

applied 

Artificial photosynthesis - Hydrogen or - Fundamental and ap- 

hydrogen rich 

fuels 

plied research 


60


per cent of capital expenditure will be provided. 

Despite India’s shortcomings in generating solar energy at large scale, the solar energy 

industry has become vibrant and does not lack interest from institutional or 

private customers. 

Potential 

Solar thermal 

India is the 9 th biggest producer of solar thermal systems worldwide. Indian companies 

develop solar thermal devices and systems with the objective to meet domestic 

requirements rather than those in highly industrialised countries. Usually, such 

products serve the purpose of water or air heating, cooking, drying of agricultural 

products, water purification, detoxification of wastes, cooling and refrigeration, heat 

for industrial processes and electric power generation. As far as the latter is concerned, 

the Government of India offers 10 Rupees (approx. CHF 0.21) per kWh that 

is fed into power grids. 

In recognition of the vast potential for solar power the Ministry of New and Renewable 

Energy (MNRE) recently launched two major projects which involve solar thermal 

energy at large scales: 

- In February 2009 the MNRE announced to build 60 so-called Solar Cities in cities 

with a population of between 500,000 and 5 million. 

The first such Solar City is to be realised in Nagpur in the state of Maharashtra. 

By the year 2012, 10 per cent of the city’s energy demand is planned to be covered 

with renewable energy sources. While solar thermal heating systems will play a 

key role, energy efficiency measures, particularly for “green buildings”, are to be 

implemented as well. 

Users of solar water heaters, particularly in the domestic sector, will receive a rebate 

on their property tax. 

The municipality of Nagpur is planning to introduce a byelaw which would make 

the use of solar water heating systems mandatory with certain categories of buildings. 

- In August 2009 the state government of Gujarat and the William J. Clinton Foundation 

(headed by the USA’s former president) signed a memorandum of understanding 

for the creation of a solar park that will generate more than 5 GW of 

electricity. Although still in the planning phase, the power station would be built 

in a desert area of Gujarat, and most of the equipment would be procured within 

India. 

Further, the government of Gujarat has signed agreements with about 40 energy 

companies that have signalled interest to generate 5 to 50 MW of power each, 

allocated 1,500 hectares of land for such purposes and pledged to offer financial 

incentives for companies which will start generating energy before December 

2010. 



61


Photovoltaic 

Like power generation from solar thermal technology, 

also the photovoltaic method is poorly represented in India. 

However, the country is the 7 th biggest producer of 

solar photovoltaic cells, having some of the best quality 

silica reserves in the states of Orissa and Andhra Pradesh. 

India is the world’s 2 nd largest manufacturer of photovoltaic 

panels based on crystalline solar cells. 

Photovoltaic systems are most commonly used in rural 

areas and off-grid, consisting largely of mini grids, solar 

home systems, solar lanterns and solar street lights. 

The Government of India offers 12 Rupees (approx. CHF 

0.26) per kWh that is fed into power grids from units that 

generate up to a maximum capacity of 50 MW from photovoltaic 

systems. 

- The number of balance-of-system manufacturers in India 

who produce charge controllers, inverters, switches 

and battery systems is on the rise, and innovation is 

actively sought for. 

- There is no signifi cant wafer manufacturing in India. 

Few companies have proposed projects to build infrastructure 

in this direction, including thin fi lm module 

production lines. 

- Some large projects have been proposed by Indian as 

well as foreign companies. For example, in the year 

1996, a US consortium planned to build a 50 MW solar 

photovoltaic plant in the Thar Desert in the state 

of Rajasthan. The Rajashtan government set aside a 

35,000 km² area of the desert for solar power, suffi - 

cient to generate 700 to 2,100 gigawatts electricity. The 

project was halted because of fi nancial and legal problems 

within the consortium. 



Solar electric rickshaw 

Cycle and auto rickshaws have been a cheap transport for millions of 

Indians for decades. Traditionally, they have been operated using fossil 

fuels. But now they are set to harness the power of the sun. In October 

2008 a prototype of the new Soleckshaw - short for Solar Electric Rickshaw 

- was unveiled in New Delhi. Developed by the state-run Council 

for Scientifi c and Industrial Research (CSIR), the prototype can either 

be pedalled or propelled by a battery which is topped up every 50 - 70 

kilometres from a solar-powered charging station. 

The Soleckshaw has three seats, electric lights, radio, a mobile phone 

charger and it can run at a speed of up to 12.5km/h. Four prototypes 

have been tested in Delhi’s historic Chandni Chowk district. The aim 

is to have Soleckshaws operating before the Commonwealth Games 

which will take place from 3 - 14 October 2010 in New Delhi, not least 

because these games have the environmental motto “Green Games”. 

40 

35 

30 

25 

20 

15 

10 

5 

0 

CHART 9.2: Annual production of solar cells and photovoltaic 

modules (MW capacity) Solar cells PV modules 

5.2 

1996/97 

8.2 

8.3 

1997/98 

11 

6.6 

1998/1999 

9.5 

9.5 

11 

1999/2000 

14 

2000/2001 

17 

20 

20 

2001/2002 

21.5 

23 

2002/2003 

25 

36 

2003/2004 

62


Wind 

Status 

The first wind power programmes in India were initiated in 1984. The Government 

of India adopted a market-oriented strategy, aiming at catalysing the commercialisation 

of wind power. Further policy reforms were introduced in the 1990s. With 

the rise of Suzlon Ltd., a world-wide leading Indian manufacturer of wind turbines, 

wind power became more and more important in India and has attracted significant 

private investments (domestic and foreign) in research & development, as well as in 

manufacturing. 

Most Indian companies who manufacture wind electric generators 

(in most cases with a unit capacity of up to 1,650 kW) 

do so either with the involvement of foreign companies in 

joint ventures or as subsidiaries. In these cases, production 

usually happens under license agreements. 

Although the installed capacity has grown and investments 

have become huge, India does not manage to generate enough 

power from wind because the plant load factor (PLF) is lower 

than average. The PLF of wind energy in India has increased 

only from 13.5 per cent in 2003 - 04 to 15 per cent in 2008. 

There are states like Gujarat or Andhra Pradesh where wind 

energy is functioning at a PLF of less than 10 per cent. 

Winds in India are influenced by the 

strong south-west summer monsoon 

winds, which start in May or June 

with cool, humid air that moves towards 

the land. In October the weaker 

north-east winter monsoon moves 

cool, dry air towards the ocean. From 

March to August the winds are uniformly 

strong over the whole Indian 

Peninsula, except the eastern coast. 

From November to March, winds are relatively weak, except on the coastline of the 

state of Tamil Nadu. As there are allegations that windmills reduce monsoon rainfall, 

the central government has said it will probe the effects. 

The majority of wind resources are found in coastal states, where geographic and 

climatic conditions are favourable for wind farms: 

- With 4,132 MW, Tamil Nadu has the biggest wind generating capacity today. The 

showcase Muppandal wind farm is said to be the largest in Asia, supplying the villagers 

with electricity for work in the once impoverished village of Muppandal. 

- With 1,837 MW the state of Maharashtra has the second largest generating capacity. 

The Vankusawade Wind Park with a capacity of 201 MW is the biggest wind 

park there. 

- The state of Gujarat has a generating capacity of 1,432 MW. 



TABLE 9.12 

TABLE 9.13: Wind energy technologies, energy output forms 



Solar energy 


Pumping - Movement 

(most commonly 

of 

water) 

Capital cost 

(USD per kW) 

- Small wind machines 

widely applied 

Onshore wind turbines - Electricity - Widely applied commercially 

Offshore wind turbines - Electricity - Development phase 


TABLE 9.14: Development potential for wind energy (in gigawatt) 

2010 2020 2030 2040 2050 

Gov/ Green- Gov/ Green- Gov/ Green- Gov/ Green- Gov/ Green- 

IEA peace IEA peace IEA peace IEA peace IEA peace 

Wind 

Legend 

12 12 24 69 34 143 45 200 56 224 







(USD per kWh) 

Wind 

950 - 1,100 0.045 - 0.047 




63


- Karnataka is one of those states in India which have the most number of wind 

farms, but most of them are small. The total generating capacity is 1,184 MW. 

- All other states have an aggregate generating capacity of 215 MW. 

Potential 

The Government of India offers companies or individuals who want to set up wind 

power projects a package of fiscal and financial incentives. This includes concessions 

such as 80 per cent accelerated depreciation, concessional custom duty on specified 

items, excise duty exemption, sales tax exemption, income tax exemption for 

10 years etc. The Indian Renewable Energy Development Agency Ltd. (IREDA) provides 

loans for setting up wind power projects. 

- In order to assess the further potential of wind power, the Wind Resource Assessment 

Programme, coordinated by the Centre for Wind Energy Technology (C- 

WET), has so far covered 25 states and union territories involving the establishment 

of 1,050 wind monitoring and wind mapping stations. 

- Assuming 20 per cent grid penetration in the future and an increase in the availability 

of wind resources in certain provinces - most notably Andhra Pradesh, 

Gujarat, Maharashtra and Tamil Nadu - wind could potentially take a much larger 

share in India’s power mix. 

- The Indian Wind Energy Association estimates that the biggest growth potential 

is on shore because neither existing technologies nor available resources are being 

harnessed at their possible scale. The states of Maharashtra, Andhra Pradesh, 

Tamil Nadu and Gujarat hold 62 per cent of the projected technical potential, 

along with states with smaller but significant potential. 


- The state government of Gujarat has ambitious plans to expand its 1,432 MW 

generating capacity in wind power. It has identified Samana (in Rajkot district) as 

an ideal location to install 450 turbines which shall generate a total of 360 MW. 

To encourage investments in wind energy development in the state, the government 

has introduced a number of incentives. For example, electricity generated by 

wind turbines can be fed into Samana’s high tension transmission grid. Companies 

from Germany (Enercon) and China (China Light Power) are investing large 

sums of money there, along with Indian businesses. 

- Another large wind power project in Gujarat is located at Motisindholi (in Kutch 

district). A wind farm with 34 turbines (1.5 MW each) and a generating capacity of 

around 200 MW is planned to feed electricity into the Gujarat state grid. 



TABLE 9.15: Wind power potential, 

by state 

State 

Gross 

potential 

(MW) 

Technical 

potential 

(MW) 

Andhra Pradesh 8,257 2,110 

Gujarat 9,675 1,900 

Karnataka 6,620 1,310 

Kerala 875 610 

Madhya Pradesh 5,500 1,050 

Maharashtra 3,650 3,060 

Orissa 1,700 1,085 

Rajasthan 5,400 1,050 

Tamil Nadu 3,050 2,150 

West Bengal 450 450 

Total 45,177 14,775 

Legend 

MW: Megawatt 

Source: Confederation of Indian Industry 

(CII), India, 2007 

64


Geothermal 

Status 

The Government of India has not taken any serious steps to promote geothermal 

energy, unlike its incentives and ambitious plans to generate more energy from 

biomass, sun or wind. As a result hardly any company or individual has invested in 

the field of geothermal power. 

There are seven areas in India where geothermal power is generated: 

- The Himalayas (especially in the state of Uttarakhand) 

- In parts of the west coast 

- In the rift area of the rivers Son, Narmada and Tapi 

- In Sohana (state of Punjab) 

- At the Gulf of Khambhat (state of Gujarat) 

- At the Godavari river (across the states of Maharashtra and Andhra Pradesh) 

- At the Mahanadi river (flowing through the states of Chhattisgarh and Orissa into 

the Bay of Bengal). 

But in terms of actual power generation there is little or negligible production of 

electricity from geothermal sources in India. 

Potential 

- The Geological Survey of India (GSI) identified 350 potential geothermal energy locations 

in the country. The GSI estimates that the overall potential for geothermal 

energy in India is about 10 GW. 

- The most promising potential is said to be in the Puga valley in the state of Jammu 

& Kashmir, and in the Himalayan state of Uttarakhand. These areas are endowed 

with vast geothermal springs. 



TABLE 9.16: Development potential for geothermal energy (in gigawatts) 

Gov/ 

IEA 

2010 2020 2030 2040 2050 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Geothermal 0 0 0 2 0 6 0 18 0 30 

Legend 





65



Status 

Hydropower accounts for a share of around 25 per cent (or 36,877.7 MW) of India’s 

total installed capacity. Of this, small hydropower contributes 17 per cent (or 

2,160.48 MW). These small hydropower projects are located predominantly in the 

states of in Andhra Pradesh, Himachal Pradesh, Punjab and Jammu & Kashmir. 

As in other countries hydro power projects in India are categorised in two segments, 

small and large. While the Ministry of Power (MoP) is responsible for large hydro 

power projects, small hydro projects are under the responsibility of the Ministry of 

New and Renewable Energy (MNRE). In India, small hydropower projects are further 

classified into small, mini and micro hydro projects. See TABLE 9.17 for details. 

Most of the small hydropower projects in India are grid connected. However, some 

are decentralised and managed by local communities or non-governmental organisations. 

Communities in remote or inaccessible areas have no or very little electric- 

ity available and benefit particularly from micro hydropower 

projects with a capacity of 100 kW or less, which are more 

affordable. Further, small scale hydropower systems can be 

installed in small rivers or streams without the requirement 

to build dams or major water diversion. In most cases only 

water wheels need to be installed, leaving little or no noticeable 

environmental effects on natural habitat. 

Although hydropower projects of 

these scales may operate at quite 

uneven performance levels due to 

fluctuating flow of water or lack of 

rain fall, hydropower is increasingly 

being used as an alternative energy 

source. In fact, the number of Indian 

manufacturers of equipment for 

small hydropower projects has increased 

over the past years. 

Today, capacity for designing, constructing and operating small hydropower plants 

is widely available. Some of the new technological advances include the replacement 

of mechanical governing systems by electronic governors, and analogue controls by 

digital systems. Many projects are now completely automatic from start to grid synchronization, 

using state-of-the-art equipment procured within India. 

Because of the important role they play in remote and inaccessible areas small, mini 

and micro hydropower projects are among the thrust areas of power generation from 

renewable resources in the Ministry of New and Renewable Energy (MNRE). The 

MNRE is encouraging public and private players to develop such projects, paying 

equal attention to grid-interactive and decentralised projects. Also, the MNRE is 

currently implementing a Global Environment Facility project under the United Na- 



TABLE 9.20: Development potential for hydropwer (in gigawatts) 

Gov/ 

IEA 

2010 2020 2030 2040 2050 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

TABLE 9.17: Classification of 

small hydropower plants 

Class 

Station capacity 

(kW) 

Micro hydro Up to 100 

Mini hydro 101 to 2,000 

Small hydro 2,001 to 25,000 

TABLE 9.18 

Capital cost 

(USD per kW) 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Hydro 44 44 70 73 104 80 138 80 171 80 

Legend 







(USD per kWh) 


900 - 1,300 0.045 - 0.047 




TABLE 9.19: Hydro-power technologies, energy output forms 



Hydropower 


Waterwheels, mills - Electricity - Commercially applied 

in small and large 

scale applications 


66


tions Development Programme (UNDP-GEF) in 13 states of India’s Himalayan and 

Sub-Himalayan regions. 

Potential 

The MNRE estimates that there is a potential of 84,000 MW from hydropower, of 

which about 15’000 MW could be generated through small hydropower projects. So 

far, it has identified more than 4,000 sites with an aggregate capacity potential of 

12’841.81 MW. The MNRE’s aim is that out of the total grid-interactive power generation 

capacity that is being installed, 2 per cent should come from mini and small 

hydropower projects. This means that the market for small hydropower projects is 

expected to increase substantially. 

- The MNRE’s plans focus on setting up projects with maximised capacity utilisation, 

low cost (equipment, generation, maintenance) and systems reliability based 

on technological improvements 

- Much of the hydro-electric potential that remains to be tapped is located in the 

ecologically fragile Himalayan region and in more difficult locations; concepts and 

technologies which can cope with such conditions are required 

- 52 per cent of the sites identified by the MNRE are located in the states of Arunachal 

Pradesh, Himachal Pradesh, Jammu & Kashmir and Uttarakhand; 17 per 

cent in Karnataka; 11 per cent in Maharashtra; from a geographic perspective, 

these locations bear the biggest potential 

- 19 states, namely Andhra Pradesh, Assam, Bihar, Haryana, Himachal Pradesh, 

Jammu & Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, 

Mizoram, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttarakhand, Uttar 

Pradesh and West Bengal have announced policies for setting up commercial 

small hydropower projects with the participation of private businesses; on their 

part, the state governments offer wheeling of power produced (transmission), 

banking, buy-back of power etc. 

- As most small hydropower plants are or will be situated in remote or inaccessible 

areas, the transmission of energy to load centres is a problem; solving this with appropriate 

technology and providing efficient transmission of electric power from 

off-grid hydropower plants is an opportunity for investment and technology. 



TABLE 9.21: Small hydropower 

potential, by state 

State 

Number 

of sites 

Technical 

potential 

(MW) 

Andhra 

Pradesh 

286 255 

Arunachal 

Pradesh 

492 1,059 

Himachal 

Pradesh 

323 1,625 

Jammu & 

Kashmir 

201 1,207 

Karnataka 230 653 

Kerala 198 467 

Madhya 

Pradesh 

85 336 

Maharashtra 234 599 

Tamil Nadu 147 339 

Uttarakhand 354 1,478 

Uttar Pradesh 211 267 

Other states 1,466 2,039 

Total 

Legend 

MW: Megawatt 

4,227 10,324 

Source: Confederation of Indian 

Industry (CII), India, 2007 

67


Ocean power 

Status 

Although experts at the Indian Institute of Technology (IIT) in Chennai (state of 

Tamil Nadu) say that ocean power has great potential in India, no such energy is 

being generated yet. 

Ocean power technology uses the energy which is embodied in the ocean by converting 

it into electricity. Some systems convert the energy in moving ocean water 

into electricity, using either the vertical motion of waves or the horizontal motion of 

ocean currents. Other systems use temperature differences at different levels of the 

ocean to generate electricity. Ocean power systems can impact migration patterns in 

ocean species and cause other environmentally troubling consequences. However, 

these consequences can be mitigated by careful selection of project sites. 

Currently, there is no specialised equipment supplier for harnessing tidal energy in 

India. 

Potential 

The full potential to generate energy from the ocean’s movement or temperature has 

yet to be assessed in India. Recent research projects have identified sites where tidal 

energy may be tapped and have raised the Government of India’s interest: 

- The most promising one seems to be located at the Ganges River’s delta in the 

Sunderbans region in the state of West Bengal. The National Hydro-Electric Power 

Corporation (NHPC) and the West Bengal Renewable Energy Development 

Agency have developed a project to harness 3.6 MW tidal power at the Durgaduani 

Creek of the Sundarbans. 

- Further potential is seen at the Gulf of Kuchch and the Gulf of Khambhat, both in 

the state of Gujarat. 



TABLE 9.21: Development potential for ochen power (in gigawatts) 

Gov/ 

IEA 

2010 2020 2030 2040 2050 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Gov/ 

IEA 

Green- 

peace 

Ocean 0 0 0 1 0 3 0 5 0 11 

Legend 





68



Status 

From all the power that is generated in India today, 25 per cent is lost through transmission 

and distribution. The Bureau of Energy Efficiency (BEE) calculated that if 

these losses could be reduced by only 5 per cent, the supply of electricity would increase 

disproportionately. 

Overall, 50 per cent of all energy is consumed by the industry sector. Low energy 

efficiency and high intensity is widespread particularly in the aluminium, cement, 

fertilizers, pulp and paper, petrochemicals and steel industries. These account for 

two-thirds of the nation’s total industrial energy consumption. India’s coal industry, 

for its part, ranks among the least efficient in the industrialised world. These inefficiencies 

are owed mainly to obsolete and energy inefficient technologies. 

The Government of India hopes to save 10 GW of energy by the year 2012 by implementing 

new policies and offering incentives (i.e. financial assistance for investments 

and research & development). In fact, energy efficiency in the Indian industry 

sector has been increasing. In the cement, steel, aluminium and fertilizers industries 

the average energy consumption has declined thanks to policy reforms and the introduction 

of better technology. 

In August 2009 the Government of India declared that by June 2010, energy efficiency 

ratings will become compulsory for electric appliances such as electric motors, 

colour televisions, air conditioners, refrigerators etc. For example, since 2005 

the production of refrigerators and air conditioners in India has been growing at 

approximately 15 per cent every year. This has led to more air pollution and an increase 

in green house gases. Power distribution transformers and fluorescent lights 

will also have to carry labels providing information about the energy consumption of 

a product and enable customers to make an informed choice. 

Further, India is planning to introduce a domestic trading scheme centred on energy 

efficiency certificates that could possibly expand to renewable energy. This plan 

envisions creating a market-based mechanism, allowing businesses that use more 

energy than stipulated to compensate by buying energy certificates from those using 

less energy or using renewable energy. Companies that will not meet benchmarks 

would have to buy such certificates under a reward and penalty system. 

Potential 

- The biggest potential to ensure higher energy efficiency is where coal thermal 

electric power is generated. With appropriate equipment, efficiency could be increased, 

emissions reduced and losses in distribution diminished. For example, 

the National Thermal Power Corporation (NTPC) is pursuing the idea of setting 

up a 660 MW greenfield project, employing supercritical steam parameters. 

- Industries that consume the biggest share of energy - aluminium, cement, fertilizers, 

pulp and paper, petrochemicals, steel - bear a huge potential for improvement. 



69


- There is significant potential in the building and construction sectors as “green 

building” is becoming popular in India. Some new building codes have already 

been introduced, and it is likely that the central or state governments will get more 

active in this field. Large commercial buildings consume approximately 7 per cent 

of the country’s overall electricity. Their consumption is likely to grow at about 

8 per cent each year. A study by the United Nations Development Programme 

(UNDP) estimates that new buildings can reduce between 30 - 40 per cent of their 

energy consumption by using appropriate design interventions in building envelope, 

lighting, heating, ventilation and air-conditioning systems. 

- 35 per cent of the total electricity consumption in India is taken by electric motors 

which are used mainly in industrial and agricultural sectors. In a survey by 

the UNDP, manufacturers said that the sale of energy efficient motors using EFF1 

technology is only about 2 per cent of total sales because of their much higher cost. 

There is a need to develop or acquire technology that can reduce the initial cost of 

EFF1 motors. 

- Every day Indian Railways transport 16 million passengers and more than one 

million ton of freight. With a network spanning over 63,000 km, it is the largest 

and busiest rail set-up in the world. It is estimated that this sector will grow by 10 

per cent and its demand for electricity will grow by 7 per cent by the year 2020. 

Already now, Indian Railways take a shore of about 2.5 per cent of India’s total 

electricity consumption. There is a need to adopt energy efficient methods to conserve 

energy and regulate the consumption of railway’s power. 

- There are more than 1,200 small and mid-size steel re-rolling mills in the country. 

Almost 57 per cent of the secondary steel is produced in these mills. Steel production 

is a highly energy intensive process. In India, outdated technologies are still 

widely in use. A study by the UNDP estimates that this industry sector has the 

potential to reduce 36 million tonnes of CO 2 over a period of 20 years. Steel rerolling 

mill units need technology and know-how to achieve higher efficiency rates 

to meet governmental rules. 



70



Status 

With India’s economic rise and household incomes 

growing, the number of vehicles on Indian roads is set to 

rise sharply. The Indian Ministry of Heavy Industries & 

Public Enterprises estimates that by the year 2015 three 

million new passenger cars and 21 million two-wheelers 

may be sold each year. This would increase today’s vehicle 

stock of roughly 100 million quite aggressively. Other 

estimates believe that the number of road vehicles will 

even have multiplied to 400 million by the year 2016. 

With the recent launch of the Indian-made Tata Nano 

car, the least expensive passenger car in the world, any 

range between these differing estimates may become true. 

The Indian automotive industry started to actually develop from the year 1991 when 

the central government abandoned the requirement for industries to acquire an industrial 

licence. It also allowed foreign direct investment (FDI) up to 100 per cent. 

Since then, many global as well as Indian manufacturers of vehicles and components 

have set up state-of-the-art manufacturing sites in India. Because of these developments, 

the automotive sector has become highly competitive and is on its path of 

becoming one of the largest in the world. It accounts for almost 4 per cent of the 

country’s gross domestic product (GDP). 

In the year 2008 Indian manufacturers produced a total of almost 11 million vehicles, 

of which one million were exported. Domestic sales have been increasing at a 

compound annual growth rate (CAGR) of 14 per cent since 2002. The increase in 

exports was even higher at a CAGR of 40 per cent, largely owing to components being 

sold to foreign customers. Currently, around 10 per cent of total production is 

exported. The industry employs 10 million people. 

The components industry consists of around 500 companies in the organised sector 

(those parts of the economy which operate through institutions which feed figures 

into official statistics) of a total of 10,000 companies. These companies have the capability 

of manufacturing the entire range of auto components, such as engine parts, 

drives, transmission parts, suspension and braking parts, electrical parts, body and 

chassis parts, equipment etc. 

In its Automotive Mission Plan 2006 - 2016, the Ministry of Heavy Industries & Public 

Enterprises declares that it wants India to emerge as the “destination of choice 

in the world for the design and manufacture of automobiles and automotive components”. 

According to the mission’s targets, India’s automotive sector would be 

manufacturing products worth USD 145 billion (over four times more than today; 

approx. CHF 153 billion) and increasing exports to nine times more than today. All 

this would translate to a GDP share of more than 10 per cent. The industry would be 

employing 35 million persons, three and a half times more than today. 



TABLE 9.22: Classification of vehicles 

Type Fuels 

Passenger vehicles 

- Auto-rickshaws 

- Passenger cars 

- Sport utility vehicles (SUV) 

Commercial vehicles 

- Freight three wheelers 

- Light duty trucks (≤ 3.5 tonnes) 

- Medium duty trucks (3.5 - 7.5 tonnes) 

- Buses 

- Heavy duty trucks (> 7.5 tonnes) 

Two-wheelers 

- Scooters 

- Motorcycles 

- Petrol 

- Liquefied petroleum gas (LPG) 

- Compressed natural gas (CNG) 

- Diesel 

- Petrol 

- Liquefied petroleum gas (LPG) 

- Compressed natural gas (CNG) 

- Diesel 

- Petrol 

71


The rapid growth is contributing to high levels of urban air pollution, among other 

adverse socioeconomic, environmental, health and welfare impacts. Between 10 and 

18 per cent of all emissions to the environment in India come from transportation. Of 

these, road transport has a share of 90 per cent. In order to mitigate these problems, 

the Ministry of New and Renewable Energy (MNRE) is promoting several research, 

development and demonstration projects at different institutions and industries. 

These projects focus on developing advanced batteries (e.g. operations range performance, 

durability), super capacitors and components for electric vehicles. The 

overall aim is to promote alternate fuels for surface transportation. In addition, hybrid 

vehicles with domestically developed exchange membrane fuel cells of 10 kW 

have been tested for performance. Various laboratories are developing different 

technologies for production, storage, and transportation including hydrogen fuel 

which some sources argue has the potential to replace fossil fuels as early as 2020. 

The International Energy Agency (IEA) believes that, in the short term, ethanol, 

compressed natural gas (CNG) and liquefied petroleum gas (PLG) could become the 

primary alternative fuels for vehicles. In the medium term biodiesel, electricity and 

hybrids (electricity and fuel) could be added. In the long term a combination of hydrogen 

and fuel cells could take a greater share. 

On its part, the National Urban Transport Policy of the Ministry of Urban Development 

promotes integrated land use and transport planning in cities. The aim is to 

achieve greater use of public transport and non-motorised modes of transportation. 

In spite of public and private initiatives and the goodwill clean transportation technology 

enjoys, India has not mandatory fuel efficiency standards for passenger vehicles. 

The Bureau of Energy Efficiency (BEE) is now being put under pressure by 

various non-governmental and advocacy groups to draft fuel efficiency legislation. 

Potential 

Generally, there is a potential for clean transportation technology in the following 

areas: 

- Use of alternative fuels such as biodiesel, ethanol, CNG, propane and LPG 

- Electric vehicles and hybrid electric vehicles 

- Mobile idle reduction systems 

- Diesel engine retrofits 

- New diesel motors (of all passenger cars in India, 25 - 28 per cent are equipped 

with diesel motors; growth in this sector was slower than in the other ones mainly 

because new cars and trucks with improved efficiency were introduced; also, 

trucks and vehicles for public transportation were switched to using CNG in some 

major cities; however, the share of diesel motors is estimated to decrease only 

slightly, providing ample potential for clean technology) 

- Monitoring fuel efficiency standards. 



TABLE 9.23: Domestic vehicle sales in 

the year 2008 

Type Number % 

Passenger vehicles 1,551,880 16.0 

Commercial vehicles 486,820 5.1 

Two wheelers 7,250,000 3.8 

Three wheelers 364,700 75.1 

Total 9,653,400 100 

Sources: Society of Indian Automobile 

Manufacturers, India, 2008; India Brand 

Equity Foundation, India, 2009 

72



Status 

Construction is one of the most rapidly growing sectors in India and 

contributes 10 per cent to India’s gross domestic product (GDP). According 

to the Confederation of Indian Industry (CII), more than 20 

per cent of all electricity in India is consumed by buildings. Commercial 

buildings are the third largest consumers of energy, after 

industry and agriculture. 

In a typical building, air-conditioning is the highest consumer of 

energy, followed by lighting and other miscellaneous equipment. If 

the initial design considers the geographic orientation of a building, 

building envelope, equipment and systems as well as lighting, substantial 

energy savings can be realised. 

The Indian Green Building Council (IGBC), an organisation based 

in Hyderabad (state of Andhra Pradesh) and operated by the CII, 

estimates that 40 - 50 per cent of energy can be saved if energy effi - 

ciency measures are incorporated when new buildings are designed. 

For existing buildings the potential to save energy can be 20 - 25 per 

cent through different house keeping and retrofi tting measures. In 

comparison with conventionally designed buildings, the incremental 

cost incurred for achieving energy effi ciency is 5 - 8 per cent and 

may have a payback period of 2 - 4 years. 

Similar energy saving potential exists in street lighting and water 

pumping facilities of municipalities or urban local bodies. 1 

With its Energy Conservation Building Code (ECBC) the Indian Bureau 

of Energy Effi ciency (BEE) specifi ed energy performance requirements 

for all commercial buildings that are to be constructed 

in India. Any building that has an electrical connected load of 500 

kW or more and a minimum conditioned area of 1,000 square metres, 

needs to meet ECBC design norms. These include requirements 

for 

- Thermal performance of walls, roofs and windows 

- Lighting systems 

- Heating, ventilating and air conditioning (HVAC) systems 

- Electrical systems 

- Water heating and pumping systems. 

There are two major rating systems for green or sustainable architecture 

and building in India. The perhaps more important one is 

GRIHA (an acronym for Green Rating for Integrated Habitat Assessment) 

which was developed by The Energy and Resources Institute 

(TERI) based in New Delhi. GRIHA was adopted by the Government 

of India and thus has the status of being a national rating system. As 

1 www.eco3.org, 2009 



CHART 9.3: Energy consumption in 

buildings in India 

Ventilation 

fans: 

5% 

Misc. equipment: 

15% 

Area lights: 20% Air-conditioning: 60% 

National priorities for green factory building 

- Water effi ciency: use water in a self-sustainable manner 

through reduce, recycle and reuse strategies 

- Handling of waste: segregation of waste at source; 

divert material to the local recycling facilities and reuse 

- Energy effi ciency: embrace latest trends and technologies 

- Reduced use of fossil fuels: use alternate fuels for transportation, 

public transportation; use bio fuels for captive 

power generation, green power and onsite renewable 

energy generation 

- Reduced dependency on virgin materials: use recycled 

and reused material; no (or minimal) use of virgin wood 

- Occupational health: avoid the use of asbestos; provide 

breakout spaces etc. 

National priorities for green homes 

- Water effi ciency: save potable water to an extent of 30 

- 50 per cent 

- Handling of household waste: segregate household 

waste 

- Energy effi ciency: use equipment and appliances which 

are labelled according to standards set by the Bureau of 

Energy Effi ciency (BEE); potential energy savings at 20 

- 30 per cent 

- Reduced use of fossil fuels: use of alternate fuels for 

transportation and captive power generation 

- Reduced dependency on virgin materials: use recycled 

and reused material; no (or minimal) use of virgin wood 

- Health and well-being of occupants: minimum performance 

of day lighting and ventilation aspects; minimise 

indoor air pollutants. 

Source: Indian Green Building Council, India, 2009 

73


it is based on Indian codes, standards and practices, it is an indigenous 

creation and enjoys a high degree of appreciation. 

GRIHA aims at facilitating design, construction, operation and evaluation 

of environment-friendly buildings, whether commercial, residential 

or institutional. Even non-air conditioned buildings are rated, so that 

local and traditional construction knowledge is part of benchmarking. 

The main weakness of GRIHA is that it is a voluntary rating system. The 

government can neither enforce it nor impose penalties in case of noncompliance 

or award bonuses for compliance. 

The other major rating system is LEED-India. It was introduced by the Indian Green 

Building Council (IGBC) based in Hyderabad (state of Andhra Pradesh) under a licence 

agreement with the U.S. Green Building Council. IGBC is responsible for certifying 

new constructions (and major renovations) as well as core and shell buildings 

for commercial use. All other projects are certified by the U.S. Green Building Council. 

Like GRIHA, LEED-India is a voluntary rating system. 

Potential 

According to the Confederation of Indian Industry (CII) the 

construction sector in the country is growing at a rate of 10 

per cent annually. In comparison, the global average growth 

rate is said to be at 5.2 per cent. Green building projects have 

already been realised and even more such projects are being 

planned: residential complexes, exhibition centres, hospitals, 

educational institutions, laboratories, IT parks, airports, 

government buildings, corporate offices etc. 

Combined with the efficient use of resources, waste management 

and reduction of pollution, energy efficiency in the 

building sector bears a considerable potential for contractors, 

architects, suppliers of materials, equipment manufacturers, 

consultants and others. 

The availability of materials and equipment is one of the major 

issues that need to be addressed. Although appropriate 

materials and equipment are available in India, their supply 

capacity does not meet demand, leaving a big market for 

new vendors. 

The IGBC estimates the market for such materials and 

equipment to be as big as USD 3.6 billion (approx. CHF 3.8 

billion) by the year 2012. However, this potential is calculated 

only for those buildings which would be rated under the 

LEED-India system. Taking additionally into consideration 

buildings rated under the GRIHA system and those which 

are not rated at all, this market could be well around USD 6 

billion (approx. CHF 6.3 billion). 



TABLE 9.24: Potential for certifications under the 

Indian Green Building Council’s LEED-India rating 

system (excluding GRIHA) 

Year 

Projected certified 

green buildings (nos. 

per year) 

Estimated market 

potential in million 

USD 

2006 20 80 

2007 50 200 

2008 150 500 

2012 1,000 4,000 

Source: Indian Green Building Council (IGBC), India, 

2009 

TABLE 9.25: Business potential for green building materials 

and equipment by the year 2012, if rated under the LEED-India 

system (in million USD per year) 

Materials & equipment 

Potential 

for green 

buildings 

Potential 

for non 

green 

buildings 

Total 

potential 

Select Materials 

Fly ash-based blocks 90 810 900 

Recycled flooring tiles 10 90 100 

Carpets certified by the Carpet and 

Rug Institute 

10 90 100 

Recycled materials 10 90 100 

Paints of low volatile organic compounds 

(VOC) 

10 90 100 

Recycled particle & gypsum boards 10 90 100 

Recycled aluminum works 10 90 100 

Wood certified by the Forest Stewardship 

Council (FSC) 

15 135 150 

Energy efficient windows 10 90 100 

High performance glazing & glass 15 135 150 

High albedo roofing paints 10 90 100 

Eco friendly modular materials 25 225 250 

Bamboo products 

Select equipment 

15 135 150 

High efficiency chillers based on 

Hybrid fiber coax (HFC) 

50 450 500 

Variable frequency drives 10 90 100 

Building automation system 30 270 300 

Solar photovoltaic 10 90 100 

High efficiency light sources 10 90 100 

Waterless urinals 5 45 50 

Composting toilets 5 45 50 

Living machines 5 45 50 

Total 365 3,285 3,650 

Source: Indian Green Building Council, India, 2008 

74



Status 

Since Tata Motors presented its Nano car in January 2008, research & development 

(R&D) for clean transportation technology has become more popular than before. A 

number of public and private research organisations have launched or relaunched 

programmes to acquire existing know-how or to develop innovations. 

The Indian-made Reva electric car also encouraged academic institutes and private 

businesses to invest more resources in R&D. The Reva car is available in the United 

Kingdom under the name G-Wiz, with over 2,000 already driving on London’s 

streets. It is also available in Belgium, Cyprus, France, Germany, Greece, Ireland, Italy, 

Norway and Spain. In order to meet market demand, manufacturer REVA Electric 

Car Company is set to complete a new assembly plant with a capacity of 30,000 

units per year and has intensified its own R&D efforts. As a reaction, Tata Motors is 

now exploring the idea of electric and alternative-fuel versions of the Nano. 

These two examples from the transportation industry illustrate that R&D is seen as 

an integral part of India’s path towards broader utilisation of clean energy technologies. 

In fact, the Ministry of New and Renewable Energy (MNRE) is promoting several 

research, development and demonstration projects, including a demonstration 

project in battery-operated vehicles (BOVs). A central subsidy is provided as part of 

the programme for the purchase of BOVs through renewable energy development 

agencies. 

In addition, fuel cell-battery hybrid vehicles with indigenously developed exchange 

membrane fuel cells of 10 kW have undergone field performance evaluation. These 

efforts are aimed at promoting indigenous production and wider applications of fuel 

cell systems in the country. Various laboratories are developing different technologies 

for production, storage and transportation including hydrogen fuel. 

Some of the leading public and private organisations involved in researching and 

developing technologies and processes for clean energy are: 

Combustion, Gasification and Propulsion Laboratory (CGPL), Department of Aerospace 

Engineering, Indian Institute of Science (IISc), Bangalore (state of Karnataka) 

- Techniques of gasifying a wide range of biomass (including agro-residues), torrefaction 

of bamboo, precipitated silica from rice husk ash; these techniques have 

been perfected into small independent power plants which could serve thermal or 

electricity needs of industry or rural society 

- Improvements to biomass stoves 

- Studies to optimize turbocharger for producer gas engines and oxygen gasification 

SIDBI Innovation and Incubation Centre, Indian Institute of Technology (IIT), Kanpur 

(sate of Uttar Pradesh) 

- Alternate energy solutions 

- Energy meter on local area network (LAN) which can find out a consuming unit’s 

energy consumption over a local area network and help reducing electricity theft 



75


Automotive Research Association of India (ARAI), Pune (sate of Maharashtra) 

- Testing, certification, homologation and framing of vehicle regulations 

Sardar Patel Renewable Energy Research Institute (SPRERI), Vallabh Vidhyanagar 

(near Anand, state of Gujarat) 

- Renewable energy systems and practices which are technically and economically 

sound, environment friendly and which can reduce the dependence of industry 

and rural sectors on fossil fuels 

- Techniques to reduce energy losses and energy intensity in processes and plants 

Sardar Swaran Singh National Institute of Renewable Energy (SSS-NIRE), Adhikhui 

Village (near Jallandhar, state of Punjab) 

- Developments for bio-energy, including bio-fuels and synthetic fuels 

Alternate Hydro Energy Centre, Indian Institute of Technology Roorkee (IITR), 

Roorkee (state of Uttarakhand) 

- Small hydropower projects in hilly as well as plain areas 

- Decentralised integrated energy systems in conjunction with other renewable energy 

sources (e.g. biomass, solar, wind etc.) 

Energy-Environment Technology Division, The Energy and Resources Institute 

(TERI), New Delhi (National Capital Territory of Delhi) 

- Solutions in the fields of energy efficiency and environment friendly technologies 

in industries and buildings as well as in small and micro enterprises (“green building”) 

- Bioenergy technologies (biomass gasifiers, ovens, kilns, furnaces based on biomass 

gasifier technologies) 

- Sustainable exploitation of renewable energy, pollution reduction, decentralized 

waste minimization and waste treatment 

- Recycling or reuse in the industrial and municipal sectors 

- Products, markets and services based on renewable energy technologies 

Centre for Wind Energy Technology (C-WET), Chennai (state of Tamil Nadu) 

- Improvement in the performance of existing wind turbine installations 

- Research support for wind resource assessment 

- Manpower training and human resources development 

- Technology support to the wind power industry 

- Research and advanced technology development (i.e. innovations in the development 

of components and sub-systems of wind turbines) 

Solar Energy Centre, New Delhi (National Capital Territory of Delhi) 

- Research and development 

- Technology evaluation, testing and standardization 

- Human resource development 

- Advisory and consultancy services 

- International cooperation 



76


It should be noted that this list is not exhaustive. There 

are more public and private R&D institutions in India 

that are partly or fully involved in the field of clean energy 

technologies. 

On its part, the Government of India has provided a 

budget in its 11 th five-year plan (2007 - 2012) for research, 

design and development in the field of renewable 

energy. 

Potential 

The Ministry of New and Renewable Energy (MNRE) 

has laid out a research and development strategy with 

the following focal points: 

- Research & development should involve both, private 

industrial organisations and scientific institutes; 

it should be driven by the needs of the private 

industrial sector, oriented towards specific goals and 

towards delivering results 

- Research and development for new and emerging 

technologies and improvement of available technologies 

should be done indigenously; however, if already 

existing, technological development should be 

acquired elsewhere, ‘reinventing the wheel’ should 

be avoided. 

Accordingly there is a tremendous potential to participate 

in R&D and in the transfer of technology with India. 

As far as the involvement of private sector participants 

is concerned, the Government of India’s Planning 

Commission has declared that India “should collaborate 

comprehensively with other initiatives in Europe, 

Japan, and the USA and establish coherence to get success 

in this important area of national importance.” 

India has already established institutional linkages in 

the area of R&D for clean energy technologies with institutions 

in other countries. Since the year 2007 it has 

signed memorandums of understanding (MoUs) with 

institutions in Australia, Brazil, Canada, Chile, Cuba, 

Denmark, Iceland, Italy, Mexico, South Africa, Thailand, the Philippines and the 

USA. In addition, India has special co-operation with the European Union (EU), 

Japan and the USA through the India-EU Energy Panel, the India-Japan Energy 

Dialogue and the India-US Energy Dialogue, respectively. Further, a multilateral cooperation 

framework called the Asia-Pacific Partnership on Clean Development and 

Climate (APPCDC) enables cooperation with Australia, Canada, China, Japan, South 

Korea and the USA. 1 

1 Ministry of New and Renewable Energy (MNRE), India, 2009 



Collaborative models favoured by the MNRE 

R&D projects may be taken up by universities, research institutions, R&D 

laboratories and industry, individually or as a consortium. Wherever possible, 

R&D projects should at least see (if not involve) industrial companies 

as end-users. Such projects should clearly quantify outputs which should 

be challenging and benchmarked to pre-identified aims 

A private company registered with the Department of Scientific & Industrial 

Research for in-house R&D may submit a project to the MNRE for support. 

The private company is expected to share 50 per cent of the project 

cost. The MNRE may provide support to the extent of the remaining 50 

per cent. This rule also applies to any consortium of private companies, 

academic institutions, research laboratories or institutions. 

A private company may join hands with the MNRE to entrust a project to 

an R&D institution, research laboratory, or academic institution. In this 

case, support funds from the MNRE at a maximum of 50 per cent of the 

total project cost will be released to the concerned implementing institution. 

Any proposal from universities or government research institutions may 

receive financial support from the MNRE up to 100 per cent. 

In these models any company or institution that contributes at least 50 

per cent of the cost will have the right to commercialise the researched or 

developed technical know-how. 

Content of research and development favoured by the MNRE 

Fuels 

- Biomass gasification and combustion 

- Biofuels: cultivation, harvesting and primary processing, including next 

generation bio fuels 

- Hydrogen: production, storage, transportation, delivery, utilization; fuel 

cells 

- Advanced coal technologies: in-situ gasification of coal and lignite, 

coal-to-oil conversion, coal bed methane, carbon capture and storage 

- Gas hydrates, oil shale 

- New materials in general 

Technology 

- Ultra super critical technologies: material development to withstand 

high pressure, high temperature, oxidation, erosion and corrosion for 

steam generator tubes, main steam piping and high pressure turbines; 

know-why development involving heat transfer, pressure drop, flow 

stability at ultra super critical conditions 

- Energy storage systems 

- Energy efficiency: energy efficient buildings and building components, 

and appliances; technology specifically for small to mid-size enterprises 

- Important crystals: facility to manufacture polysilicon for producing 

single crystals of silicon 

- Light emitting diodes (LEDs) 

- Electric Vehicles (EVs) and Hybrid Electric Vehicles (HEVs) 

- Photovoltaic technology 

Special areas 

- Rural energy: promote available energy technologies 

- Energy specifically for Indian Railways. 

77


In September 2008 the European Commission (EC) announced 

that it will establish a European Business and Technology Centre 

(EBTC) in India. With this centre, the EC wants to foster links 

between European and Indian businesses as well as between science 

and technology institutions. Through these links, the EC 

says it is “committed to promote sustainable clean technologies 

in India”. It certainly also keeps in view companies in the EU 

which have technology or know-how to respond to the demands 

of the Indian market. 



TABLE 9.26: The Government of India’s budget for research, 

design and development in the field of clean energy (within 

the 11 th five-year plan, 2007 - 2012) 

Programme Component 

Proposed Outlay 

(USD million) 

Biomass 30 

Solar 75 

Wind 41 

Small hydropower 10 

New technology 82 

Solar Energy Centre 8 

Centre for Wind Energy Technology (C-WET) 8 

National Institute of Renewable Energy 8 

Others 38 

Total (approximate) 300 

78

Annex 



79

Annex I: Exhibitions, fairs, and conferences in India 

Exhibitions, fairs and conferences in India 

Name Place Dates Year WWW 

India Electricity New Delhi 29 Sept - 01 Oct 2009 www.indiaelectricity.in 

Energy Expo Ahmedabad 09 - 11 Oct 2009 www.energyexpo.biz 

Environmentally Friendly Vehicle Conference New Delhi 23 - 24 Nov 2009 www.4efv.in 

SOLARCON India Hyderabad 09 - 11 Nov 2009 www.solarconindia.org 

ENERGY India Mumbai 10 - 13 Dec 2009 www.energy-india.org/Energy2009.html 

International Carbon Credit Conference New Delhi 11 - 12 Dec 2009 www.onlinecarbonfinance.com/carbon-credit-conference.htm 

9th ELECRAMA Mumbai 20 - 24 Jan 2010 www.elecrama.com 

Delhi Sustainable Development Summit 

(DSDS) 

New Delhi 5 - 7 Feb 2010 http://dsds.teriin.org/2010 

EnerTech World Expo Mumbai 03 - 06 Mar 2010 www.chemtech-online.com/ 

enertech/index.html 

RENEWTECH India Pune 09 - 11 Mar 2010 www.renewtechindia.com 

Green Conclave New Delhi 07 - 09 Apr 2010 http://greenconclave.in 

POWER-GEN India & Central Asia New Delhi 21 - 23 Apr 2010 www.power-genindia.com 

Light India International Chennai 04 - 07 Mar 2011 www.lii2011.in 



80

Annex II: Useful addresses 

Useful addresses in India 

Business 

Organisation Postal address(es) Phone number(s) Fax number(s) E-mail WWW 

Swiss Business Hub India 502 Dalamal House, 5th Floor 

206, Jamnalal Bajaj Marg 

Nariman Point 

IN-Mumbai 400 021 

+91 22 4343 5600 +91 22 2285 65 66 mum.sbhindia@eda.admin.ch www.osec.ch/sbhindia 

Swiss-Indian Chamber of Commerce SICC Northern and Western Regions 

Dulcina Mendes 

c/o BTS Investment Advisors Pvt. Ltd. 

Bandra Kurla Complex, 

Bandra (E) Mumbai 

IN-Mumbai - 400 051 

+91 22 6697 8292 +91 22 6697 8299 dulcina.mendes@sicc.ch www.sicc.ch 

Western Region 

Ashok Malhotra 

President 

c/o Mettler-Toledo India Private Limited 

Amar Hill Saki Vihar Road, Powai 

IN-Mumbai - 400 072 

Southern Region - Andhra Pradesh, 

Karnataka, Kerala and Tamil Nadu 

Mr. Raghuram 

c/o Schmiedewerk Stooss AG 

A - 2, 304 White House 

R T Nagar 

IN-Bangalore - 560 032 

Southern Region 

Dipak Mane 

President 

c/o Bühler India Private Ltd. 

No. 13 D, KIADB Industrial Area 


Sohrabji Godrej Green Business Centre Confederation of Indian Industry CII 

Survey No 64, Kothaguda Post 

Near Kothaguda Cross Roads 

Ranga Reddy Dist 

IN-Hyderabad - 500 084 



+91 22 2803 1200 

+91 98 45 48 40 89 

+91 80 2289 0000 

+91 22 2857 5071 

+91 80 2289 0001 

ashok.malhotra@mt.com 

raguram@kasupreme.com 

dipak.mane@buhlergroup. 

com 

+91 40 23112971 +91 40 23112837 gbc@cii.org www.greenbusinesscentre.com 

81



Sectoral associations 


Solar Energy Society of India (SESI) www.sesi.in 

Solar Energy Centre MNRE, B-14 

CGO Complex 

Lodhi Road 

IN-New Delhi - 110 003 

+91 124 2579207 sec@nic.in http://mnes.nic.in/sec/sec-activities.htm 

Indian Wind Turbine Manufacturers 

Association 

www.indianwindpower.com 

Indian Wind Energy Association MNRE, B-14 

CGO Complex 

Lodhi Road 


+91 124 2579207 sec@nic.in http://mnes.nic.in/sec/sec-activities.htm 

Indian Green Building Council (IGBC) Confederation of Indian Industry (CII) 

Sohrabji Godrej Green Business Centre 

Survey No 64, Kothaguda Post 

Near Kothaguda Cross Roads 

Ranga Reddy District 

IN-Hyderabad - 500 032 

+91 40 23112971 igbc@cii.in www.igbc.in 



82





Alternate Hydro Energy Centre AHEC Indian Institute of Technology 

+91 1332 274254 +91 1332 273517 ahec@vsnl.com 

www.iitr.ernet.in/departments/AH/pages/index.html 

IN-Roorkee - 247 667 

+91 1332 285213 +91 1332 237560 aheciitr@gmail.com 

Automotive Research Association of India Survey No. 102, Vetal Hill 

+91 20 30231111 info@araiindia.com www.araiindia.com 

(ARAI) 

Off Paud Road 

Kothrud 

IN-Pune - 411 038 

Centre for Wind Energy Technology Ministry of New and Renewable Energy +91 44 22463982 +91 44 2246 3980 info@cwet.res.in 

www.cwet.tn.nic.in 

(C-WET) 


+91 44 22463983 

ed@cwet.res.in 

Velachery - Tambaram High Road 

Pallikaranai 

IN-Chennai - 600 100 

+91 44 22463984 

Centre for Renewable Energy and Environ- Birla Institute of Technology and Science +91 1596 245073 +91 1596 244183 http://discovery.bits-pilani.ac.in 

ment Development (CREED) 

Vidya Vihar Campus 

IN-Pilani - 333 031 

+91 1596 245074 

Indian Institute of Technology (IIT), Depart- Hauz Khas 

+91 11 2656 8436 +91 11 2658 2037 webmaster@admin.iitd.ac.in www.iitd.ernet.in/center/ces/index.html 

ment of Energy Studies 


+91 11 2658 2277 

The Energy & Resources Institute (TERI) Darbari Seth Block 

+91 11 2468 2100 +91 11 2468 2144 mailbox@teri.res.in http://teriin.org 

IHC Complex 

Lodhi Road 


+91 11 41504900 +91 11 2468 2145 

Combustion,Gasification and Propulsion Indian Institute of Science (IISc) +91 80 23600536 +91 80 23601692 lab@cgpl.iisc.ernet.in http://cgpl.iisc.ernet.in 

Laboratory (CGPL) 

Department of Aerospace Engineering 


+91 80 22932338 

Sardar Patel Renewable Energy Research Post Box No: 2 

+91 2692 235011 director@spreri.org 

www.spreri.org 

Institute (SPRERI) 

IN-Vallabh Vidhyanagar- 388 120 

info@spreri.org 

Sardar Swaran Singh National Institute of 12 K.M. Stone 

http://mnes.nic.in/nire-rdd.htm 

Renewable Energy (SSS-NIRE) 

Jalandhar-Kapurthala Road 

Wadala Kalan 

Distt. Kapurthala 

IN-Adhikhui Village - 144 601 

SIDBI Innovation and Incubation Centre Indian Institute of Technology (IIT) 

bvphani@iitk.ac.in 

www.iitk.ac.in/siic 

IN-Kanpur - 208016 

siic@iitk.ac.in 

Solar Energy Centre Block No. 14, CGO Complex 

Lodi Road 


sec@nic.in http://mnes.nic.in 



83



Policy & administration 

Organisation Postal address(es) Phone umbers(s) Fax number(s) E-mail WWW 

Bureau of Energy Efficiency (BEE) Government of India 

Ministry of Power 

4th Floor, SEWA Bhawan 

R. K.Puram 


+91 11 26179699 +91 11 26178352 dg-bee@nic.in www.bee-india.nic.in 

Central Electricity Authority (CEA) Government of India 

Ministry of Power 

SEWA Bhawan 

R. K. Puram 


www.cea.nic.in 

Central Electricity Regulatory Commission 3rd & 4th Floor, Chanderlok Building, +91 11 23353503 +91 11 23753923 info@cercind.gov.in 

http://cercind.gov.in 

(CERC) 

36, Janpath 


chairman@cercind.gov.in 

Department of Science & Technology Technology Bhavan 

+91 11 26567373 +91 11 26864570 dstinfo@nic.in http://dst.gov.in 

New Mehrauli Road 


+91 11 26962819 +91 11 26862418 

Ministry of Environment & Forests (MoEF) Government of India 

+91 11 24361669 

envisect@nic.in www.envfor.nic.in 

Paryavaran Bhavan 

+91 11 24360605 

CGO Complex 

Lodhi Road 


+91 11 24360570 

Ministry of New and Renewable Energy Government of India 

+91 11 24361298 +91 11 24361830 http://mnes.nic.in 

(MNRE) 

Block-14 

CGO Complex 

Lodhi Road 


+91 11 24360707 

Ministry of Power (MoP) Government of India 

Shram Shakti Bhavan 


http://powermin.nic.in 

Central Pollution Control Board Parivesh Bhawan 

CBD-cum-Office Complex East Arjun 

Nagar 

IN-Delhi - 110 032 

+91 11 22307233 +91 11 22304948 ccb.cpcb@nic.in www.cpcb.nic.in 

State Electricity Regulatory Commissions 

(SERCs) 

http://mnes.nic.in/utilities.htm 



84



Non-governmental organizations, advocacy groups 


The World Bank +91 11 24617241 www.worldbank.org 

Asian Development Bank (ADB) www.adb.org 

Greenpeace India #60 Wellington Road 

Richmond Town 

Bangalore - 560 025 

+91 80 22131899 +91 80 4115 4862 sservice@in.greenpeace.org www.greenpeace.org/india 



85


Useful addresses in Switzerland 

Business 


Osec Stampfenbachstrasse 85 

Postfach 2407 

CH-8021 Zurich 

+41 44 365 51 51 +41 44 365 52 21 contact@osec.ch 

www.osec.ch 

Avenue d‘Ouchy 47 

Case postale 315 

CH-1001 Lausanne 

Corso Elvezia 16 

Casella postale 5399 

CH-6901 Lugano 

Swiss-Indian Chamber of Commerce SICC c/o DPS Communications 

Gessnerallee 28 


MARWAS AG Dufourstrasse 24 




+41 21 613 35 70 

+41 91 911 51 35 

+41 44 226 90 61 

+41 79 699 54 47 

+41 21 613 35 02 

+41 91 911 51 39 

info.lausanne@osec.ch 

info.lugano@osec.ch 

+41 44 221 00 85 dorit.sallis@sicc.ch www.sicc.ch 

+41 44 380 29 30 +41 44 380 29 31 info@marwas.ch www.marwas.ch 

86

Annex III: Map of India 

36 º 

32 º 

28 º 

24 º 

23.5 º 

20 º 

16 º 

12 º 

8 º 

68 º 72 º 76 º 80 º 84 º 88 º 92 º 96 º 

Gujarat 

Gandhinagar 

Goa 

Panaji 

Punjab 


Rajasthan 

Jaipur 

Karnataka 

Bangalore 

Kerala 



Srinagar 

Himachal Pradesh 

Shimla 

Uttaranchal 

Dehradun 

Haryana 

New Delhi 

Daman & Diu 

Diu Dadra & Nagar Haveli 

Daman & Diu Silvasaa 

Daman 

Maharashtra 

Mumbai 

Lakshadweep Islands 

Kavarati 

Madhya Pradesh 

Bhopal 

Uttar Pradesh 

Lucknow 


Hyderabad 

Pondicherry (Yanam) 

Tamil Nadu 

Chennai 

Chhattisgarh 

Raipur 



Jharkhand 

Ranchi 

Pondicherry (Puducherry) 

Pondicherry (Karaikal) 


States and Union Territories 

National Capital 

State Capital 

Union Territory Capital 

Mi 100 200 300 

Km 100 200 300 400 

Sikkim 

Gangtok 

Bihar 

Patna 

West Bengal 

Kolkata 

Orissa 

Bhubaneshwar 

Itanagar 

Assam 

Guwahati 

Meghalaya 

Shillong 

Tripura 

Agartala 

Arunachal Pradesh 

Nagaland 

Kohima 

Manipur 

Imphal 

Mizoram 

Aizwal 

Andaman & 

Nicobar Islands 

Port Blair 

87

Annex IV: Sources consulted for this study 

Asian Development Bank (ADB), “Asian Development Outlook 2009”, 2009 

Central Electricity Authority (CEA) India, 2008 & 2009 

Centre for Social Markets, www.csmworld.org, 2009 

Citigroup, www.citigroup.com, 2008 

Economist Intelligence Unit (EIU), United Kingdom, 2006 

Federal Planning Commission, India, 2006 

Goldman Sachs Bank (Switzerland), “BRICs-KOMPASS”, 2006 

Government of India (GoI), India Development Gateway, India, 2009 

Government of India (GoI), Planning Commission, Integrated Energy Policy, India, 2006 

Government of Punjab, Punjab State Planning Board, India, 2009 

Greenpeace India, “Global Energy (Re)Volution, A Sustainable India Energy 

Outlook”, India, 2009 

India Brand Equity Foundation (IBEF), India, 2009 

Indian Green Building Council (IGBC), India, 2008 

International Energy Agency (IEA), “Turning a Liability into an Asset: Landfill 

Methane Utilisation Potential in India”, 2008 

International Energy Agency (IEA), “World Energy Outlook 2007”, 2007 

MarketsMonitor.com, “Indian Solar Energy Market Outlook 2012”, 2009 

MARWAS AG, primary research, Switzerland and India, 2009 

Ministry of Finance (MoF), Budget 2009-2010, Speech of Pranab Mukherjee, Minister of Finance, India, July 6, 2009 

Ministry of Home Affairs, India, 2009 

Ministry of New and Renewable Energy (MNRE), India, 2009 

Ministry of Petroleum and Natural Gas, India, 2009 

Ministry of Power, India, 2009 

Ministry of Statistics and Programme Implementation, “India in Figures”, India, 2007 

National Council for Applied Economic Research (NCAER), India, 2007 & 2008 

Office of the Registrar General, India, 2009 

Organisation for Economic Co-operation and Development (OECD), “OECD Economic Surveys: India”, 2007 

Punjab State Planning Board, Government of Punjab, India, 2009 

Renewable Energy Magazine, Jaideep Malaviya (author), January 2009 

Society of Indian Automobile Manufacturers, India, 2008 

State Secretariat for Economic Affairs SECO, foreign trade statistics, Switzerland, 2007 & 2008 

Swiss Business Hub India, India, 2009 

U.S. Department of Commerce, International Trade Administration, “Clean Energy: An Exporter’s Guide to India”, 

USA, 2008 

United Nations Development Programme, www.undp.org.in, 2009 

Wharton University of Pennsylvania, USA, 2009 

World Bank Group, “World Development Indicators”, 2008 

www.eco3.org, 2009 



88

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