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Energy/Environment/Clean Technology
Nuclear Power Corporation of India Ltd. (NPCIL). Three more plants under construction will
add 2,660 megawatts by mid-2010, and another three plants are on the drawing boards. Nuclear
power currently provides about 3% of the country’s electricity. Siting of these plants generally
reflects a policy of diversifying India’s sources of energy and serving areas in the south and west
where it has been difficult to transport coal.
A shortage of uranium has forced NPCIL to operate its plants at 50% capacity. India is in the
process of expanding its domestic reserves through mining projects in Meghalaya, Rajasthan, and
Karnataka. It also has large reserves of thorium and has explored the potential for development of
a thorium fuel cycle. But the Singh government is counting on the U.S.-India civilian nuclear cooperation
agreement, signed in July 2005, to provide the fuel, technology, and investment to meet a
target of 40,000 megawatts of nuclear power by 2030. The agreement will provide India with
processed fuel and technology, despite its past refusal to sign the Nuclear Non-Proliferation
Treaty and give up nuclear weapons testing, and requires reactor safeguards inspections, certification
by the International Atomic Energy Agency (IAEA) and approval from the 45-member
Nuclear Supplier Group to provide fuel. The recent ratification of the agreement by both governments
is expected to catalyze India’s nuclear power market and accelerate its opening to
international partnerships.
Hydroelectricity
Hydropower accounts for 5% of India’s total commercial consumption. Installed capacity produces
about 31,000 megawatts, with an estimated potential of as much as 150,000 megawatts.
High development costs, long lead times for regulatory approvals and land acquisition, and the
environmental and social controversy surrounding large dam projects have limited this energy
option. The World Bank and other international lenders have de-emphasized hydroelectric projects,
and the Indian government has financed new projects only sparingly. Private investment in
hydroelectricity accounts for only 3% of total projects. The government has considered a reverse
build-operate-transfer model for new projects, under which state-owned companies would manage
projects to completion, at which time they would be turned over to private operators or operated
under a joint venture structure.
India buys just over 1,400 megawatts of hydropower annually from neighboring Bhutan, which is
supplied by three plants, all financed by India. Nepal also offers considerable potential as a hydropower
supplier to India, with more than 6,000 rivers and streams and a potential to produce
83,000 megawatts of power annually, of which about 42,000 megawatts are currently economically
feasible to develop. Nepal’s total hydroelectricity production at present, however, is only
551 megawatts and serves 1.2 million domestic customers; Nepal’s government and the Nepal
Electricity Authority (NEA) have been distrustful of allowing in foreign investment and expanding
hydropower and transmission capacity beyond its borders.
Renewable Sources
The potential for large-scale development of solar, wind, biomass and other alternative energy
sources is growing as coal and oil prices remain volatile and as costs for related technology fall.
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