Why go in for green technologies if the
political system conspires to ensure they're fat and inefficient?
Whether we need ‘green’ technologies — wind, solar or biomass
gasification — for future energy security is no longer a matter of
debate. The critical question, now is: under what conditions can these
emerging technologies be introduced into the market. This answer is not
so simple. Most innovation and manufacture lies with private players.
At the same time, the creation of favourable conditions for application
is at the door of government and public policy. Consider also as with
any new technology, there will be a learning curve in their
application. This learning will have to lead to new innovation, both in
technology development and in its practice. There lies the catch. If we
don’t get the public-private partnership right, if we don’t allow for
research, regulation and scrutiny, we will end up nowhere. The
technology will be a sham applied for short-term profit, not change.
Take wind energy. For some years now, rightly, the Centre and state
governments have given generous fiscal incentives to promote the
sector. But does it work? I ask these questions because while crunching
government data on wind energy, my colleagues and I got stumped. By
March 31, 2008, wind energy certainly comprised 6 per cent of installed
power capacity in the country; yet, we found, it contributed a paltry
1.6 per cent to the actual power generated. On an average, the plant
load factor (PLF, the efficiency at which a wind farm runs based on
installed capacity) of wind power installations has marginally
increased from 13.5 per cent in 2003-04 to 15 per cent in 2007-08. Then
there are states like Gujarat and Andhra Pradesh, where wind energy PLF
is less than 10 per cent. Maharashtra has more than tripled its wind
capacity in recent years, but the state government’s own data shows
wind farms produce less power today than in the past. In this
energy-starved state, wind energy functions at a PLF of 11.7 per cent.
It is certainly shocking, compared to global PLF averages of 25-30 per
cent.
The fact is that we wanted to promote this technology in the
business-as-usual-mode. We did not demand a new working relationship
between the public and the private. In fact, we allowed this sector to
grow, with the worst characteristics of the market and we continued to
pour public largesse. Currently, the wind energy business is closed,
monopolistic and unregulated. It works simply: the turbine-maker (very
few in the market) arrange with investor companies to set up wind
farms. The same turbine-maker then supplies equipment and is further
paid to operate and maintain equipment. In this completely integrated
business, nobody knows the cost of manufacturing a wind-mill. Nobody is
interested in reducing costs and increasing efficiency of power
generation. As a result, unlike in other parts of the world, in India,
the capital and running costs of wind power generation have increased,
even though the market dictates the cost decrease with economies of
scale.
In this ‘closed’ economy, there is little public scrutiny, even little
public research. The only people, who know anything about the sector,
are in its circle of influence — consultants who get business or
business itself. When we researched, not a single wind company was
willing to respond to the issues we raised. Not a single expert was
willing to go on record.
This is deadly, when you consider that all new technologies will have
their ‘learning curve’. The application will have to teach public
programmes to be modified and to evolve. In the case of wind, the new
policy must promote incentives for generation and reduce subsidy for
capital.
It is also clear that if we don’t fix the public-private relationship
at the beginning, vested interests creep in, get entrenched and make it
even more difficult to change. It is for this reason that only last
month, after much delay, government did bite the bullet and agree to a
generation- based incentive scheme for wind energy. But it has not
modified the existing scheme, which gives incentives for capital and
so, this add-on scheme, meant for those who ‘choose not to take
advantage of capital subsidy and tax depreciation’ will clearly lead to
little change. Business-as-usual will continue and the business is not
about energy.
We need a new model of technology promotion in all these cases. It has
to be 4P — public-private- public-partnership. The public regulator has
to drive the purpose of technology introduction; private industry must
be open and accountable to public funds, which are fuelling its
business for public good, and at all stages, public research and public
scrutiny must be welcomed and assisted. Let us be clear, green
technologies need green politics as well.
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