Clean power is becoming increasingly important to India as the country strives to improve its energy security.

Wind power, hydro, biomass, and solar power are at the forefront of renewable-energy developments in India but progress has been hindered by many challenges, which have kept the sector largely untapped.

The prime minister, Narendra Modi, who led the Bharatiya Janata Party (BJP) to a landslide victory in May, has stressed that he wanted the country to produce more power from renewable resources.

More than 300 million people in India did not have access to electricity, according to the World Bank, and parts of the country were affected by frequent blackouts.

“India is an attractive market for renewable energy due to both the availability of high solar radiance, wind speeds, as well as the power deficit,” said Uday Salunkhe, the group director at the Welingkar Institute of Management Development and Research. “More and more foreign investors are attracted because of potent natural resources [and] large-scale international investment opportunities.”

He said that “renewables hold a lot of potential and promise” given the problems with inefficiency, accessibility, and a costly dependence on fuel imports in India.

Power generation from renewable sources was growing in India, with the share of renewable energy in the country rising from 7.8 per cent in the financial year to March 2008 to 12.3 per cent in the financial year ending March last year, according to Ernst & Young. Wind power makes up 68 per cent of India’s renewable capacity, its data showed.

“Although the share of renewable energy has been rising over the years, India still has large untapped renewable energy potential,” according to Ernst & Young.

In 2010, the country introduced the National Solar Mission to develop its solar sector. The new government is eager to expand on this, and last month outlined ambitious plans for the sector in its first union budget.

“New and renewable energy deserves a very high priority,” said Arun Jaitley, India’s finance minister, as he presented the budget.

He outlined that the government would set aside 500 crore rupees for “ultra mega solar power projects” in Rajasthan, Gujarat, Tamil Nadu, and Jammu and Kashmir. He also revealed that 1 billion rupees had been earmarked for developing solar canal projects, while import duties would be waived for solar manufacturing equipment.

“As far as India is concerned, renewable energy has to play a major role,” said Dinesh Patidar, the chairman and managing director of Shakti Pumps, which manufactures solar pumps in India. Many of the solar pumps are aimed at the agricultural sector, as farmers in some rural areas do not get access to the electricity grid to pump water to their crop fields.

But more needed to be done, he said.

“Various initiatives at governmental level are being taken to realise the huge potential of renewal energy in India, especially solar energy. Since the sector needs huge investment to grow as a competitive energy segment, a lot more policy and investment initiatives are still required to make renewable energy accessible and affordable to larger sections of the society.”

Mr Patidar said that many Indian companies were working on the development of technology to harness solar power to meet the demand for power in India.

“Distribution and electrification also remains a huge challenge in rural areas, where the agriculture is the foremost occupation and livelihood of the people,” he said.

“Since solar energy has emerged as the major renewable energy source in India, it is important that this sector gets due attention from various governmental and other nodal agencies to make it a feasible and dependable alternative to meet energy needs.

“With the current pace of electrification in the country, grid electricity access will be a distant dream to many in rural India. It would be very important for the government to make energy available to Indian villages.”

The country has installed wind capacity of 19.1 gigawatts, which makes it the world’s fifth largest wind energy producer, according to Ernst & Young. It added that wind was India’s “most promising” renewable energy source, with installations concentrated in Tamil Nadu, Gujarat, and Maharashtra.

“Wind energy attracted $3.4 billion, or almost half of the total investment in clean energy in India in 2012,” the professional services firm said. “More banks and lending institutions are expressing an interest in funding projects due to the growing awareness of the benefits of wind power.”

DLF, one of India’s biggest property developers, has been installing rooftop solar power generators on a number of its projects, including solar generators with 1000 kilowatts of capacity on buildings in its Cyber City business district development in Gurgaon.

“A considerable proportion of the Indian population lacks access to clean and modern energy, implying that a significant increase of energy demand is still on the way,” said Amit Grover, a national director at DLF. “Effective renewable energy policies, specifically targeting rural areas, can help ensure that demand is met in a sustainable way, and investment barriers, including administrative processes and inadequate supporting infrastructure, should be removed. A clearer strategy is needed, both to increase India’s renewable capacity and to build a competitive renewable industry.”

He said that major challenges the renewable energy sector faced in India included infrastructure and investment.

Subir Pal, is the head of discrete automation and motion at ABB India, which offers solar and wind-energy technology solutions, including solar pumps.

He believes that renewable energy development was likely to accelerate under the new government.

“Both from an energy security and an energy access point of view, renewable energy sources are becoming increasingly relevant for India,” Mr Pal said. “We see a lot of opportunities, both in the wind energy segment as well as the solar energy segment, evolving in the future.”

Solar energy was expensive compared to conventional fuel, he said, with costs driven up by high land costs in India and the expense of the technology. But he predicted that prices would come down over the next couple of years, while conventional fuel costs would continue to rise.

There was still much to be done in terms of making the technology more efficient.

“The nature of renewable energy, like wind and solar, is intermittent, which means you do not get a steady, predictable flow of power from these sources,” Mr Pal said.

“It is dependent on climate conditions, which have a lot of influence on the energy being generated, so there are special technologies involved to make this energy output more predictable, more useable and sustainable in the long run.

“These are technological challenges on which many companies are doing research and development.”

Godrej, a major Indian conglomerate, was one of the many corporates that recognised the importance of the use of renewable energy.

“The shift to renewable sources is important as we realise that renewable power is not only about the environment but it is also about energy and security independence,” said Rumi Engineer, the head of green buildings at Godrej Green Building Consultancy Services.

“Renewable energy can help to fight against poverty by playing part in electrification of many rural areas in the developing world. With huge demand in real estate in India, developing green buildings with renewable-energy usage is the most effective and essential way to optimise energy consumption at the demand side.”

business@thenational.ae

Follow The National’s Business section on Twitter