India's $6.5 Billion Investment in Renewables to Add 3,500 Megawatts to Grid

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--With an investment of nearly $6.5 billion, India has plans to implement renewable energy projects in the current financial year, which will add 3,500 megawatts (MW) to the national power supply.

The country's Minister for Renewable Energy, Farooq Abdullah, told parliament that in the last three years, including 2011, more than $1 billion had been received as equity inflows to the country in the renewable energy sector. India was ranked as the third-best investment destination in the renewable energy sector after China and the U.S. in the Ernst & Young renewable energy country attractiveness indices, which was published in May this year, he said.

The minister said that 130 MW of off-grid, captive renewable energy from various sources would be added to the 3,400 MW of grid interactive additions in the financial year 2011-12. The off-grid sources would be mainly wind, solar, biomass and small hydro.

Half of the total investment in renewables will go into wind energy, and solar energy is expected to receive $2 billion. The minister said that small hydropower and bio-power projects would receive about $660 million and $550 million, respectively.

Those who make foreign direct investments are allowed to fully invest in renewable energy generation and distribution projects, subject to the provisions of the Electricity Act 2003.Key initiatives taken recently to attract foreign direct investments in renewable energy projects include generation-based incentives for wind power; the 22,000-MW solar power target for 2022 under the Jawaharlal Nehru National Solar Mission (JNNSM); a payment security mechanism for grid connected solar power projects under the JNNSM; a renewable energy certificate mechanism; and amendments in the national tariff policy.

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