Current World Environment

Introduction

In the last few decades, use of conventional energy has come under increasing attack for causing environmental pollution such as acid – rain, green house effect. Inevitably attention has been focused on alteration of these energy sources for producing electricity in the folk of reducing environmental pollution. The renewable energy source in particular, have received special attention because they do not have fuel cycle and are regarded as environmentally more benign. Renewable source of energy systems are in operation either as interfaced to the utility grid or used in standalone systems. Renewable energy sources are those which are inexhaustible. These comprise of solar energy is of particular importance cause it’s the only source free from any sorts of pollution and cause of its immense potential. Assuming 8 hours of sunshine or approximately 6*10¹⁵Kwh/yr and using 5% of this energy will result in 3*10¹⁴Kwh/yr which is six times compared to the estimated world energy demand in the year 2000. A.D. in addition to the environmental benefits solar energy will bring about major economic and social gains

There is embarrassing ignorance about solar energy’s economic & social potential even among some of those scientists who are the harshest critics of the traditional “Blindfolded” school of economics. There are arguments that – consciously or unconsciously – reveal ignorance about solar energy’s actual prospects & which there by distort the perspective. The social gains of solar energy are correspondingly large.

The Global Scenario

With the depending climate change crisis and growing urgency for development f carbon free power generation sources, The “ Green jobs” market world over is under rapid expansion, Green jobs are being created not in the renewable energy sector, but also in water and land management, environmental friendly products and services, goods and materials green automobiles, etc. According to the green jobs report (2008) by world watch institute and UNEP, by 2006, over 2.3 million people were employed in the renewable energy sector worldwide. More than 624000 people were employed in the solar thermal energy sector, out of which china alone contributed more than 600000 jobs. Wind power has another majors employment providing sector accounting for 300000 plus jobs, with Germany as the leader providing more than 83000 jobs. The recent report “wind at work 2009” by European estimates worldwide employment includes all direct, indirect and associated jobs. United states employed more than 85000 workers in the wind power sector during 2008 GWEC’s Global Wind Energy outlook 2008’ report project during 2020 wind power alone would provide between 1.3 to 2.2 million jobs worldwide under moderate and advanced scenarios.
 

Table 1: Present and future employment in the R.E. sector in India (Sector – wise) Click here to view table

Solar Power

The Solar photovoltaic industry is another major employment area which provided jobs to more than 170000 workers in 2006 (Green jobs 2008 report). – Solar Generation – V 2008 report by the European Photovoltaic industries Association and Greenpeace Predicts creation of 1.4 to 2.3 million global green jobs under moderate and advanced scenarios respectively. The fast scaling – up CSP technology and promise great opportunities for green jobs. The report titled “Concentrating Solar Power, Global outlook – 2009’ by Greenpeace projects employment creation of 2000000 jobs by2020 and 0.4 to 0.6 million jobs by 2030 under moderate and advanced scenarios.

Biomass

Biomass – based energy conversion which includes bio – diesel, is the most labor intensive activity and has created maximum jobs more than 1174000 jobs were created worldwide in the biomass sector by 2006. just three countries viz Brazil, United States and china, contributed 1078000 jobs creates were linked with collection of feedstock for bio diesel production (Green jobs 2008 report).
 

Table 2: Global VC investment in clean Tech (US S million)  Click here to view table

The Indian Scenario

The way in which the renewable sector has been growing during the past five to six years in India could also result in large scale green employment generation, however a conducive policy environment and regulatory framework should drive this development so as to translate huge employment potential into full fledged reality. A sector vise review of current situation sand future potential for job creation in India is given below.

Wind Energy

As of now, wind energy is the most promising and commercially viable renewable energy technology for generating electricity. Cumulative installations stand at 10.5 GW and annual addition at present is close to 1.5 GW – 1.6 GW. Annual addition is likely to scale up to 5 GW by 2015.

The Indian wind industry is passing through a transition phase at present. India is set to become one of the global manufacturing hubs for wind turbines in the next few years and the wind sector can become a major avenue for green jobs, as many Indian companies have started indigenization drives through vertical integration. In addition to the currently existing 10 players, at least 15 new players will be joining the market by 2012 which include global major like Gamesa, GE Wind and siemens, According to the GWEC report “Indian wind energy outlook, 2009’ there are around 28400 workers presently employed in the Indian wind energy sector. The report predicts that around 63000MW would be installed by 2020 under moderate scenario, creating more than 136000 jobs.

Solar Energy

The solar energy sector mainly comprises solar thermal (Solar water heating, solar air heating, solar concentrators for process heat and power) and solar photovoltaic routes. The solar thermal sector employs around 10000 to 11000 personnel in solar water heating and service providers for manufacturing, installation commissioning, O & M and sales. Growth opportunities envisaged in solar water heating and solar thermal power generation segments will also create trained manpower demand few years down the line. Government of India targets cumulative water heating capacity of 40 million sq. by 2022 as against the present, 2.9 million sq. m.
 

Table 3: Global VC investment in clean technology sector (2008)  Click here to view table

Solar Power

India’s share in the overall solar PV market of the world is merely 1.4% (Green jobs 2008), while Japan and Germany are the World leaders, Solar PV industry is still in its infancy and maximum production gets shipped to global markets, the Indian market being limited to few off grid applications, presently more than 2500 persons are employed in the SPV sector for manufacturing of solar cells, modules and system integration, for future development technology development/ demonstration and solar design, engineering operating and maintenance, integration, etc.

Biomass Power

Biomass power is an important energy source for power generation in India. For the last 15 years, biomass power has become an industry attracting annual investment of over Rs. 10000 corer. Generating more than 9 billion units of electricity per year and creating employment opportunities in rural area. Megawatt scale electricity generation through combustion and co – generation routes are employed under the biomass power/co – generation programme. Biomass and co – generation based cumulative power capacity stands at 1.9 GW, leaving a side huge untapped potential. At present, around 100000 persons are employed in various activities of power generation from biomass. For future development areas where experts would be required are construction and erection, commissioning of power plant, and operation and maintenance, Rest of the activities like collection of bio mass, its transportation from source to plant location and fuel handling within the plants can be done with minimum supervision.

Municipal Solid Waste to Energy

Municipal Solid Waste (MSW) consists of every day items like product packaging, grass, clippings, clothing, bottles, food scraps, paper etc. Most of the MSW is a mix of domestic waste, Street waste, commercial waste etc. containing organic portion through suitable processing and treatment. At present only 59 MW of power plants have been set up in the country employing 2600 peoples.

Small Hydro

Small Hydro power (SHP) plants are one of the most environment friendly and sustainable sources of power generation. The estimated potential for power generation in the country from such plants is about 15000 MW. Most of the potential in the Himalayan states in Kerala and Karnataka as river based project. SHP project are economically viable and consequently the private sector has started investing in such projects. The viability of these project improves with increase in the station capacity. So for, about 675 small hydropower projects aggregating 2461 MW have been set up in various parts of the country which employ around 31000 people.

Aggregate potential

An integrated sector wise picture if the present and future employment in the renewable energy sector for India is given if the table on the next page. The future estimations are based on the target capacity addition by Government of India till end of 13^th five year plan period i.e. 2022.
 

Table 4: Share of clean tech VCI total Investment (%)  Click here to view table

Developing Human Resources

Unfortunately there are no structured academic programmes that address the specific needs of individual technology or industry, say the wind industry, solar industry etc. in a holistic way. In some cases, the training centers or universities also lack teaching professionals with an depth knowledge and understanding of the latest technology, industry and market developments and real life issues in renewable energy. There are over 70 colleges, institutes, universities, IITs, which are running PG level energy specific programmes which give some weight age to renewable energy subjects. Institute offering PhD or research programmes in renewable are around 17 to 20, creating a specialized knowledge base for sectors like solar thermal solar PV, bio energy, wind energy etc.

The total quantitative assessment shows that all these post graduate programmes put together do not train/educate more than 600 – 650 students in the renewable energy sector. At the graduate level, syllabi are designed renewable segment, with a great emphasis on solar energy. The proposal is to hold annual auctions whereby companies and organizations in India voluntarily commit to legally binding off grid renewable energy contracts. Against achievement of targets, the R.E. contractor would receive payments from the fund.

For example, f25 per house system could be utilized either to reduce interest rate on loans or as guarantee to encourage longer term finance from banks. A fund of f100 million is envisaged. The detailed methodology and implementation plan are brings worked out.

Other public funding Mechanisms

The competitive bidding for minimum subsidies is a mechanism where the country govt. provides a subsidy to private investors, foreign and domestic, through a competitive bidding process so as to reduce the level of subsidy. Part of the cost is borne by govt. subsidies. And the rest is recovered from users.

The combining subsidy with loan ownership (CSLO) model develops the idea of combining govt. subsidy with private funds. This model allows flexibility in the provision of subsidies, either in the form of a direct capital subsidy or in the form of an interest subsidy through banks/ financial intermediaries or in some cases, as a combination of the two. The subsidies reduce the initial investment of the beneficiaries, the policy helps to commercialize the R.E. products and reduce the cost by mass production thus, this policy option improves the reach of the subsidy scheme and also integrates it with conventionally accepted funding mechanisms.

Private Sector Finance

Major private sector financing comes through the banking system and non banking financial institutions. The conventional of their lending is called balance sheet financing i.e. lending to credit – worthy companies based on their balance sheet, innovation is required here, to provide project – based financing, however in this article we are focusing in few other innovative financing, however in this article we are focusing on few other innovative financing mechanism and not bank financing.

Public Sector Support to Enhance Private Finance

A special institution arrangement can be created in the public sector to enhance private financing. This institution can control in the public sector to enhance private financing. This institution can control all R.E. related funds and promote R.E. financing, special – purpose financial institutions for R.E. operate through instrument such as capital finance, debt and equity finance, lease finance or lending through financial intermediaries. The Indian renewable energy development agency (IREDA) is one such funding institution in the public sector which helps to enhance private financing.

Venture capital (VC)

VC has also been active in the development of the R.E. sectors it can be useful in the pre and/or early commercialization period. Global venture capital investment in clean technology wad US S6.6 billion in 2008, which was 15% of total VC investment. The region – wise investment in clean technology VC investment is given in Table. 2. Share of clean technology VC in total VC investment is given in table 4 and reached the level of USS277 million worldwide, solar is the leading sector in VC investment, followed by bio fuels, transportation and wind sector wise investment is given in table 3.

Consumer Finance

The approach of leveraging consumer financing aim at providing mechanisms that enable consumers to pay a part of full cost of R.E. products and service under terms and conditions that are affordable to them.

For example customers can purchase a certain amount of green power (in KWh) per month or per year, for which they are willing to pay a small premium which can offset (completely or partly) higher costs of renewable power sources. Several market researches indicate that there are significant number of customers who are willing to pay an extra premium for purchasing green power. But the problem is that actual participation rates may vary significantly, which will hamper the effective implementation of this scheme.

Conclusion

The R.E. sector still requires a lot of attention from the financial sector. Adequate and non expensive financial resources are necessary promotional policies can bring down the cost of renewable electricity by 10% 30%. In 2008, investment in R.E. generation project was USS billion, 13% more than last year’s investment. Govt. loan guarantee and Govt. project participation and investment in infrastructure can reduce the risks by sharing the risks. Similarly other new innovative financial options like innovating insurance schemes and investments by VC funds, can be useful for the further growth of the R.E. sector. The social and economical benefits of unconventional energy, the large electrical market penetration can only by achieved if conversion efficiencies are increased and cost reduced. The can be achieved by accelerating the production volumes & encourage research & development efforts.

References
 

1. Hermann scheeer – “ A solar Manifesto” James & Science Publisher Ltd. (1994).
2. Maxime kleinpeter – “ Energy Planning and policy “John willy and Sons (1995).
3. HP Garg and J Prakash-”Unconventional energy – Fundamentals & Applications “ Tata McGraw Hills (1997).
4. Winter F.D., “Solar collector, Energy storage & materials” – The MIT press, London (1990).
5. MNES (Minsitry of Non – Conventional enerty sources)- Annual report (2001-02).
6. Confederation of Indian industry.
7. Reajendra Kharul & Dhruv Shrivastava – Green Jobs Renewable energy volume 5 NOS 4-5 July – Aug. Sept – Oct (2009).
8. Deepak Paliwal & Dinesh Agarwal – Benefits of solar energy with references to Indian economy international conference MANIT dated (2002) 28-29.