Electricity demand is expected to grow at an average annual rate of 7.4 % in the next 25 years
The World Bank has stated in its latest report that India can generate 68,000 MW of power, costing less than Rs.6 a unit from renewable energy sources, a step that can address the country's energy security concerns.
The report released here by the multilateral funding agency on Friday said the 68,000 MW of wind, hydro and biomass energy can be harnessed at less than Rs.6 a unit. “Developing indigenous renewable energy sources, which have low marginal costs of generation, are more economically viable in the long run,'' the study — Potential of renewable energy in India — has stated.
India's electricity demand is expected to grow at an average annual rate of 7.4 per cent in the next 25 years. The generation capacity will have to increase five-fold to keep pace with the growth of demand.
At present, the installed capacity of the country stands at about 1.70 lakh MW from all sources of energy, as per official data.
The report also suggested that renewable energy development can be an important tool for regional economic development within the country. Himachal Pradesh, Jammu and Kashmir and Uttarakhand have 65 per cent of India's small hydro power resources. Much of the economically attractive wind potential in Orissa or the biomass potential in Madhya Pradesh lies largely undeveloped, the report adds.
The report emphasises that coal, gas and oil have witnessed considerable price volatility in recent years, renewables are the only free hedging mechanism against price volatility of fossil fuels. The risk-adjusted cost of renewable energy is lower than that of fossil-based fuels, and their use enhances the price certainty of the portfolio and increases energy security, the report says.
The entire renewable potential, including solar, is less expensive than diesel, where the existing 20,000 MW of diesel based installed capacity points to innovative possibilities of scaling up renewable in a big way, according to N. Roberto Zagha, World Bank Country Director in India.
The government has set an ambitious target of installing at least 44,000 MW of additional capacity of renewables in the next 10 years.