CEE Jan-Mar 2012

development of renewables. Karnataka is now a dose second. Rajasthan and Gujarat are racing ahead to catch up. What is lacking is a coherent orchestration of a green symphony to propel our states to sustainable development; and sustainable energy is the bedrock of sustainable development. To move towards sustainability, the states have to first set their houses in order. Most state electricity utilities are in a financial mess. The accumulated losses of our state utilities have crossed Rs.1.5 lakh crore. Much of the losses are on account of subsidized or free power to the agricultural sector. The consumers of this power are not people who deserve to be subsidized- a farmer with irrigated land cannot be called 'poor.' So free or subsidized power to the agricultural sector is misplaced populism at the cost of the state's electricity sector. If allowed to be run professionally, out state utilities have the capacity to be on their own. 'Public sector' is not a word of abuse and many of our public sector companies have proven their work. Some are even 'blue-chip' companies. So the states have only to blame themselves for the abysmal state of their electric utilities. Green power sources like solar may still be expensive, but they likely to reach grid parity in the next three yeas or so. The injection of solar power into the grid is currently very miniscule to have any significant impact on the average power procurement cost. So the states should now set their houses in order and begin the journey towards energy transition. Besides the electricity utilities, there are many areas where the states need to focus attention. First and foremost, the capacity of institutions in charge of facilitating the transition like nodal agencies need to be strengthened in manifold ways. The special feature on Karnataka in this issue contains a separate write-up on this subject and hence I am not dwelling on the same here. Then there is the issue of providing the human resources required for this transition - outside the frame of the government. The states should galvanise the technical education sector to create adequately trained manpower to research, develop, manufacture, and manage these new technologies. The third and critical area is to sensitize the banking and financial sectors to lend to these new technologies. It is agreed that they still have risk perceptions about technologies like of solar power. But of late, they have realized that while conventional technologies may per se be 'mature', the fuel supply risks of these technologies are mounting. As a result, many new conventional power projects have landed in serious financial trouble and were declared 'non– performing assets' in the recent past. It is time to show the 'green' road to them; some of them have already started realizing this. As regards safeguarding lending to new energy technologies, it is very often a question of choosing the right technology and structuring the project finance appropriately, since capital costs are falling and there are no fuel supply risks. Besides these three critical areas, there are so many actions needed at the state level to bring in cohesion in pol icies and practices, confidence in government personnel , RE manufacturers, investors, and the public at large. These multifarious actions need to be initiated with full gusto, not because renewables can 'complement' the order technologies, but because renewables 'are the future' of the power sector. Current policies need to herald that future and this is not about sudden shutting down of conventional power; it is about engineering a smooth transition. It is not a question of just 'greening' the power sector, but it is about future energy security of the states. After all, the essence of policy making lies in envisioning the future. The target of 15 per cent grid power from renewabl e sources was declared in Govt. of India's National Action Plan on Climate Change (NAPCC). But not just the states, even the central government has not set targets for capacity addition in tandem with this national goal. A detailed research study by WISE has shown that if this 15 per cent target is to be achieved, RE capacity of average 80,000 MW will have to be establishec in the ten-year period from 2011 to 2020, taking the cumulative capaci ty to over 1,00,000 MW by 2020. The current targets are nowhere near these figures. On a flat average, we have to add about 8,000 MW of renewable power capacity every year from 2011 onwards. Doubts may persist whether this is achievable. The truth is that it is eminently possible. For example, figures gathered by WISE show that wind power is 48